If you’ve taken a loan from Canara Bank — whether it’s a home loan, construction loan, or any other credit facility — you might have come across the term “loan drawdown”.
Meaning of Loan Drawdown
In simple terms, a loan drawdown is the process where the bank releases your approved loan amount to you. This can happen in two ways:
Full drawdown – The entire loan amount is credited or paid at once.
Progressive drawdown – The loan amount is released in stages, usually linked to milestones (common in construction or project loans).
The main advantage is that you pay interest only on the amount you’ve actually used, not on the total sanctioned amount.
Example
Home Loan: The bank transfers the loan amount to the seller at the time of property settlement.
Construction Loan: The bank releases funds in phases as the construction progresses.
Canara Bank’s Drawdown Rules & Charges
Recently, Canara Bank announced an important update:
Drawdown failure charge: If your drawdown fails on the due date because your linked account doesn’t have enough balance, the bank will charge ₹100 + GST.
This charge is applicable once per month (not for every failed attempt in the month).
How to Avoid Drawdown Charges
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Maintain sufficient balance in your linked savings or current account before the drawdown date.
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Set up a NACH mandate (National Automated Clearing House) so the loan repayment is automatically deducted without manual transfers.
Key Takeaway
A loan drawdown is simply the release of your approved loan funds. At Canara Bank, ensuring you have enough balance or setting up auto-debit can help you avoid unnecessary charges. Understanding this process will not only save you money but also keep your loan account running smoothly.
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