Home Loan Sanction Letter: Is It Important? What Do You Need To Know About It?


Many dreams of owning a home, and a Home Loan is your financial support in the home purchase. But before applying, understand the loan process. The sanction letter you receive post application indicates the loan approval.

The lender verifies the documents required for Home Loan and approves the application once the information provided by the borrower is up to their satisfaction. 

The sanction stage helps unveil whether your application is rejected or accepted. The sanction process is pretty simple. All you have to do is fill up the application form and attach important documents. This is how the lenders can determine your eligibility and conclude results accordingly. To gain adequate information about it, let’s head toward the forthcoming points to know more:

What Is A Home Loan Sanction Letter?

The sanction letter is a specific document that the bank serves. It shows you are eligible to get a loan amount. The amount of sanctioned loans depends on your creditworthiness. 

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A sanction letter includes the details:

  • Home Loan amount
  • The finest rate of interest
  • Pre-EMI and EMI payment details
  • Tax-related advantages
  • The ability of the sanctioned loan
  • Loan repayment tenure
  • Applicable interest rate (it can be floating or fixed)
  • A special scheme (if any)

The Importance Of A Loan Sanction Letter

Some real estate developers might ask for a copy of the letter before the final purchase. The Home Loan sanction letter is going to work as proof of communication. With this, the lender and borrowers can settle any dispute that might occur in the future.

What Type Of Format is Used in A Home Loan Sanction Letter?

The Home Loan sanction letter mainly involves the listed information regarding the loan approval.

  • The interest rate
  • Tenure of repayment Tax advantages
  • The validation period
  • EMI details
  • Base rate
  • Type of interest

Vital Documents Required For Home Loan Sanction Letter

The financial institution or bank might ask you to submit the listed documents for loan approval.

  • Passport sized photographs
  • New income tax return form
  • The property documents
  • Salary certificates for the recent three months
  • Bank statement for the past six months
  • Residence proof
  • Identity proof like an Aadhaar card, PAN card, or passport.
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Not only this, some applicants are required to provide their financial details and pay the processing fee.

The Sanction Limit in A Letter:

There’s a fact that we must know the sanctioned limit is considered when it comes to Home Loans. But the price may vary from one application to another. The variations occur due to the listed factors:

  • Down payment
  • The market value of the property
  • Applicant’s eligibility

The home loan eligibility checker includes employment status, income proof, age, etc. But things may vary if you are self-employed or working on a salary basis. Besides that, financial institutions will also take a closer look at your credit history, credit score, and outstanding debts.


A Home Loan sanction letter includes details about the sanctioned amount and other aspects. So before finalizing anything, take a closer look at the interest rates and other vital aspects.