What is Education Loan Disbursement Letter

The Disbursement Letter for the Education Loan is an Official Confirmation by the concerned Bank or NBFC that the required funds have been released and are readily available in the Student's account for usage. While applying for a Student Visa or appearing for a Visa Interview, you are requested to submit the disbursement letter and the Sanction Letter to confirm that the approved Education Loan is available to you for use. 

To obtain a disbursement letter from the Bank or NBFC, you must request the Relationship Manager or Branch Manager to generate it once your disbursement process has been completed. They may take up to 1 working day to prepare the document and provide it to you. So, it's better to raise the request during the disbursement process so they can prepare immediately after disbursement. There are no charges involved for this. 

If you apply for Education Loan via Abroad Cube, our Loan Expert will automatically apply for a Disbursement Letter to speed up the process and provide seamless service. 

The Disbursement Letter must include the following things for acceptability by concerned Universities and Visa Authorities. 

1. Student Name
2. Sanctioned Amount
3. Disbursement Amount
4. Disbursement Date
5. Bank/NBFC Name, Address, Logo, Contact Info, Signature & Stamp
6. Loan Application Number

It may have more detailed information such as university name, loan type, interest rate, student's address, and passport number.  

What's the difference between Sanction Letter and Disbursement Letter?

The sanction amount is the maximum amount you can receive from the Bank for Education, and the disbursed amount is what you have already received.

The Sanction Letter is provided by the Bank or NBFC when you are approved for an Education Loan and have paid the processing fees. It mentions the total approved loan, student details, and university and co-applicant details. It's verifiable proof that the Bank or NBFC is ready to sponsor you for the upcoming studies till the mentioned amount and with the mentioned terms.

The Disbursement Letter is one step ahead of the Sanction Letter, where the Bank or NBFC mentions your details regarding the disbursed amount and date of disbursement on the Official Letterhead for University and Visa authorities.

For example, you got approved for Rs 60 Lacs for two years of Course. Based on the Semester, you plan to divide the amount into four equal parts and apply for a disbursement of Rs 15 Lacs for the first semester. After the disbursement, the Bank will mention the amount of Rs 15 Lacs on the Disbursement Letter and Rs 60 Lacs on the Sanction Letter.

Template Content of Education Loan Disbursement Letter

Here is the Sample Template of Education Loan Disbursement Letter. 

Dear Sir/Mam,

[LENDER NAME] is pleased to inform you that, basis your application, we disbursed an Education Loan facility, the details of which are given below

To [STUDENT NAME]
Date: [DISBURSEMENT DATE]
Subject: Disbursement Letter for Loan Application - [LOAN ACCOUNT NUMBER]

Country of Study	[COUNTRY]
University Name	[UNIVERSITY NAME]
Loan Type	EDUCATION LOAN
Loan Amount Sanctioned	[AMOUNT]
Loan Amount Disbursed	[AMOUNT]
Term of Loan	[TENURE]
Processing Fees	[AMOUNT]
ROI	[INTEREST RATE]
Disbursement Date	[DATE]

 

Thanks
[LENDER NAME]
 

Here is the one another template issued by Bank

Disbursement Letter

Date: [DATE]

[Student Name]
[CoApplicant Name]

Address: [Student Address]

Ref: Loan Account Number [LAN]

Dear Sir/Mam,

This is with reference to the Loan Account Number [LAN] and your request for the disbursement, we have disbursed the Education Loan as per below details

Sanctioned Loan Amount: [AMOUNT]
Total Previous Disbursements: [AMOUNT]
Current Disbursement: [AMOUNT]
Balance To be Disbursed: [AMOUNT]

Your instalment will start from [DATE] and due date of instalment is [DATE]. Request you to please arrange the funds in your Bank Account accordingly on due date. 

 

Thanks
Authorized Signatory

The template of Disbursement Letter may vary based on Bank and Branch. There is no set templete as long as required details are mentioned on the Letter. 

Sample of Education Loan Disbursement Letter

Here is the Disbursement Letter of IDFC First Bank for Education Loan

Here is the Disbursement Letter of Auxilo Finserv for Education Loan

Is Disbursement Letter mandatory for Study Abroad?

No, obtaining a Disbursement Letter is not mandatory for Studying Abroad. It depends on the University Requirements and Visa Application Guidelines. However, attaching a Disbursement Letter to the Visa Application is suggested for better approval chances and proof that you have taken the requested Education Loan.