What is the ruling on delaying a portion of the Zakat money due to the eligible recipient, while disposing of the remainder by lending it to others, with the knowledge of the owner of the money?

You erred in your handling of the zakat funds that you were entrusted to disburse. It was incumbent upon you to know Allah's ruling concerning it before proceeding. It is not permissible to dispose of zakat funds by lending them, even with the knowledge of the zakat payer, because the money has become the property of its rightful recipient. You must cease this practice. If a person is not competent in managing their affairs, it is within the prerogative of the judge to place them under interdiction. Therefore, it is not permissible for you to lend zakat funds. You must hand them over to the person concerned, and it is permissible to pay off their debts on condition that they are informed.