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Home Loan Sanction Letter

Loan Sanction Letter

Last Updated 23rd May 2022

  • A home loan sanction letter is an initial approval letter to a home loan applicant that is signed by a person of authority.
  • A sanction letter for home loan is issued after the verification of details like credit history, income stability, repayment ability and documents.
  • A home loan sanction letter validity lasts for six months.
  • A bank loan sanction letter format is based on information like sanctioned loan amount, loan tenure, home loan interest rate, and terms and conditions of the lender.
  • Get sanction letter on home loan from top banks and housing finance companies like SBI, HDFC, ICICI Bank, Citibank and PNB Housing Finance.
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What is a Home Loan Sanction Letter?

Home sanction letter is a letter that indicates that a home loan application has been successful.The sanction letter is issued after verification of details like credit history, income stability, repayment ability and documents and signed by a person of authority issued in favour of the home loan applicant. Also, it includes information like the total loan amount to be sanctioned by the lender, and the home loan interest rate on which the home loan is lent. A home loan bank sanction letter has a validity of six months.

Availing a home loan is a lengthy process that requires different steps such as research, comparison, application, documents submission and verification, and ultimately loan approval and disbursement. However, one of the essential components of home loan approval and disbursement is the home loan sanction letter. The letter indicates that the home loan application has been successful, and on the completion of the required formalities and conditions, the loan will be approved thereafter.

Home Loan Sanction Process

Every loan process is based on some protocols and procedures that need to be followed. Similarly, a home loan sanction also has some process. It is listed as follows:

  • To get a home loan sanction, firstly, you need to submit a home loan application.The home loan application can be submitted both online and offline.
  • After you make the loan application, the lender verifies your information which include your credit history, income stability, checking and verification of documents, legal checks on the property for which a home loan is applied, and the market value of the mortgaged property, which in this case is the house itself.
  • After the complete verification of your information is done, you are either selected or rejected for a home loan. The initial indication of a home loan process is made through a home loan sanction letter. The letter is issued by a person of authority to inform you about your home loan eligibility. However, a sanction letter for home loan is not the final loan agreement on a home loan disbursement. Indeed, it is just an indication for the beginning of a further loan process that need to fulfill.

Home Loan Sanction Letter Format

A home loan sanction letter contains various components of a home loan. A housing loan sanction letter format includes various components like:

  • Total loan amount to be sanctioned.
  • Home loan tenure.
  • Applicable home loan interest rates whether fixed or floating.
  • Benchmark type like base rate, RLLR, MCLR or PLR to which the home loan interest rate is linked.
  • Home loan EMIs to be paid.
  • The validity period of the home loan sanction letter.
  • Terms and conditions of the lender that are applied on the home loan.

What is a Digital Home Loan Sanction Letter?

A digital home loan sanction letter is an online document that the lender issues before the lender provides the e-applicant an official document. The letter certifies that the lender has approved the loan based on the applicant’s eligibility and includes terms like rate of interest.

What are the Benefits of Having Home Loan Sanction Letter?

  • The sanction letter serves as a proof of your loan eligibility before you receive a formal loan agreement.
  • In addition, it gives you a clear idea about your loan, including the EMI you need to pay every month. Thus, it helps you decide whether to proceed or reconsider your decision, depending on your financial health.
  • Also, a sanction letter copy is one of the necessary documents you may have to submit to a developer or housing society during your house purchase.
  • Moreover, the document serves as proof if any legal dispute arises between the borrower and the lender over breach of the terms and conditions.

Documents Required for Sanction Letter

You need to submit the following documents to get a home loan sanction letter:-

  • Identity proof- Aadhaar card, PAN Card, Driving License, Voter ID card, Passport
  • Address Proof- Aadhaar card, PAN Card, Last three months utility bill
  • Income proof- Salary slip, ITR or Form 16 (if applicable)


How long does a home loan sanction take?

Home loan sanction can take somewhere between 3-4 weeks, if you submit all the documents as per the requirement. If documents are not submitted on time it may take than the usual time.

Can a sanctioned loan be cancelled?

A housing loan sanction letter is not the final loan agreement. Indeed, even after getting the home loan sanction letter, you need to fulfil further formalities. Failure to meet these could cancel the sanctioned loan.

What happens after a home loan sanction letter?

Once you receive a home loan sanction letter you will receive a confirmation letter which is a proof that you are eligible for home loan. This document is valid for 6 months.

How to download Axis bank home loan sanction letter?

You can download the Axis bank home loan sanction letter online on the official website of Axis Bank once you have submitted your home loan application.

How to get a HDFC home loan sanction letter?

Once you have submitted an HDFC home loan application, you can get a digital copy of home loan sanction letter on the HDFC website.

What causes the delay in sanction of loans?

A delay in the sanction of home loans can be caused by incorrect information filled on the application form, or failure to fulfil the documentation requirements of the lender.

Can I get a home loan sanction letter online?

Yes, the bank may issue you an e-sanction letter online. The letter certifies that the loan has been approved, but it is not a final agreement.

What is the validation period of a home loan sanction letter?

The validation period of a home loan sanction letter may vary based on your bank. However, generally it is valid for six months.

How do you sanction a home loan?

A home loan is sanctioned in three steps, which begins with filling the home loan application form, followed by documents and eligibility verification and ends with the allotments of home loan sanction letter.

How do I know if my loan is approved?

The initial indication of a home loan approval is the allotment of the home loan sanction letter. After receiving the letter, you need to fulfil the lender specific formalities. On successful completion of the loan formalities, the loan amount is disbursed. Further, you can check your home loan status on the lender`s online portal and can know when the loan is approved.

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