What is a home loan sanction?

A home loan sanction letter is an official document issued by a lending organisation to customers stating that their loan is approved. The lender issues the sanction letter after verifying the home loan applicant’s details such as credit history, income, repayment capacity etc. 

Understanding the Process of Getting a Home Loan Sanction

When you apply for a home loan, you must follow and comply with the procedures set out by the lender. Similarly, the lenders follow a few protocols for home loan sanctions.

  • Home loan application

    Firstly, you must fill  a home loan application in detail and submit it along with the necessary documents. HDFC’s end-to-end digital process allows you to apply for a loan from the safety and comfort of your home.
  • Home loan processing

    If you need any assistance with a home loan application or have any queries, you can easily reach out to HDFC representatives through online chat assistance or toll-free numbers.
  • Verification by the lender

    After receiving your application, the lender verifies details such income, occupation, and credit history, and initiates the process for approval/sanction.
  • Home loan approval

    After verification, the lender issues a home loan sanction letter, which entails basic loan details such as loan amount, loan tenure, interest rate type etc and the terms and conditions.

The sanction letter is not the final loan agreement. It only indicates an initial approval. You must provide your acceptance and comply with the conditions mentioned in the sanction letter to proceed further for loan disbursement. 

What does a Home Loan Sanction Letter Contain?

The home loan sanction letter is an important document that contains the following details:

  • Total sanctioned loan amount.
  • Home loan Interest rate
  • Type of interest rate applicable (fixed or floating interest rate)
  • Loan Tenure
  • EMI (as applicable) payable
  • Validity of the sanction letter
  • Special Conditions (If any) to be fulfilled before disbursement
  • Other Terms and Conditions.

I’ve received my sanction letter. What next?

When you receive your home loan sanction letter, you must read the term and conditions thoroughly. If you are satisfied with the offer, you need to share a signed copy of the same to your lender stating your acceptance of the offer. 

You must convey your decision of acceptance to the lender within a specific period so that they can initiate the disbursement process.