If a lender fails to disburse funds at the time of settlement, what is a potential consequence?

The selected answer is correct because if a lender fails to disburse funds at the time of settlement, it often affects the loan’s start date and the borrower’s obligation to start paying interest. Under certain regulatory frameworks, it is common for lenders to have provisions that, if funds are not disbursed in a timely manner, they may not charge interest for a certain initial period following the settlement date. This is meant to protect borrowers from being charged interest on a loan that they technically have not yet received, ensuring fairness in the lending process.

The other options suggest longer periods during which interest could be exempted, which do not align with standard practices. Typically, a 30-day grace period is a more common approach, addressing potential issues swiftly without extending the leniency too far into the loan's lifecycle. The idea that there would be no consequence overlooks the accountability that lenders hold regarding the timely disbursement of funds, which is critical for maintaining good business practices and borrower trust.