What is PD in Home Loan?

I wanted to avail a home loan to get my dream house completed and that is when I came to know

what is PD in home loan from the bank officials. It is one of the various stages of disbursement of a home loan. The PD full form in home loan is Partial disbursement. You must be knowing that loan disbursement depends on a number of factors and the bank accordingly release the loan. If a bank chooses to release the loan in various stages, it is called partial disbursement. 

Depending on the speed and level of progress of a constructing house, a bank releases the loan in various stages. To help you understand it better, let me cite an example.

Suppose you are constructing a house, the bank will disburse 15% of the loan amount once the foundation work gets done. They will again release, say 30% when all the walls get erected. Banks make a partial disbursement for borrowers who want to buy a house that is under construction or needs to be constructed. 

Some of the pros and cons of Partial Disbursement are:

Pros:

• It allows the borrowers to have some amount of the loan money ahead of time

• Helps the borrowers to manage their finances effectively

• Allows for pre-construction expenses or down payments

• Provides lenders with some assurance of repayment

Cons:

• PD calls for additional paperwork and legal documentation

• Can be costly if not executed properly

• It is hard to track repayments

• Sometimes calls for extra interest costs over the life of the loan

This is the basic concept of

what is PD in home loan.