Home Loan Interest Before Disbursement

POSTED BY BanyanFA ON January 31, 2013 2:26 pm COMMENTS (2)


I needed some clarity. One of my client has taken a home loan of x amount. The bank has started charging interest on loan from the date of issue of cheque in favour of the builder, irrespective of the fact that the cheque was not encashed for 10 days. Is that a normal practise ? 

Would really appreciate some light on this topic !



2 replies on this article “Home Loan Interest Before Disbursement”

  1. shiraz lakhani says:

    Yes, bank’s generally charge customers from the day they issue the chq. As per them, loan has been approved from their end and the money is being used by another party. Imagine a scenario if the builder does not encash the chq for over a month, which will usually not be the case.

  2. Dear BFA, although it’s a bit debatable but most of the pvt. banks use such type of interest calculation. I do have some past examples with me for the same thing.



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