Those planning to apply for a home loan must know the difference between the home loan sanction letter and the home loan offer letter. Borrowers often confuse one with another. 

The home loan sanction letter is a legal document that states a lender’s intent to extend a loan to the applicant. However, the home loan sanction letter in no way guarantees that the loan applicant will be granted a loan. A home loan offer letter, on the other hand, is a legal document that provides a guarantee that the loan applicant will be offered a loan. 

The home loan sanction letter contains important details, such as the loan amount sanctioned, the housing loan interest rate and the type of interest at which you will be granted the loan, loan tenor and your home loan EMI if you choose to go ahead with the loan on the terms and conditions mentioned in the home loan sanction letter. Apart from this, the home loan sanction letter also clearly mentions the terms and conditions that must be fulfilled before the loan amount is disbursed into the applicant’s home loan account. 

Home loan applicants must know that the terms and conditions mentioned in the loan agreement are negotiable. Therefore, once you get the home loan sanction letter, go through everything mentioned in the agreement carefully and if you disagree with any of the terms and conditions mentioned in the home loan sanction letter, you may talk to your lender. As opposed to this, everything mentioned in the loan offer letter is final and cannot be changed. 

Now that we know the basics about a home loan sanction letter, let us look at the process that one has to go through to receive the home loan sanction letter.  

Home Loan Sanction Letter: Here’s How You Get One

1. The process to avail of a home loan sanction letter begins with one’s search for the right home loan lending partner. There are many players operating in the lending market and not every lender can be trusted. Borrowers must therefore spend some time on finding the right lender for them. 
2. Once you have decided on the lender you plan to go ahead with, the next thing you should do is apply for a home loan. Before starting the home loan application process, the first thing that you must do is use the home loan EMI calculator to assess the affordability of the loan. Never apply for a loan amount higher than what you are eligible for and what you can afford to easily repay. These days, borrowers can apply for home loan both online as well as offline. In either case, you will be required to attach income, identity and address proof documents with your loan application. So, keep all the documents ready with you. 
3. Once your lender receives your loan application, they will verify all the information and documents provided by you. If you pass the document verification stage, your lender will start working on the home loan sanction letter and release it. 
4. The home loan sanction letter will contain important details regarding the terms and conditions of your home loan. If you find these loan terms and conditions agreeable, send a signed copy of the agreement to your lender. However, if you find certain terms and conditions not agreeable, talk to your lender and renegotiate with them. 
5. After you send a signed copy of your home loan sanction letter, your lender will start working on drawing the final loan agreement. You will have to visit your lender’s office to sign this agreement and once you do this, your lender will release the home loan amount in your loan account. 

Concluding Remarks

The home loan sanction letter is an important document and should be signed after understanding everything written on it. If you find certain terms and conditions confusing, consider hiring the services of a legal expert. Further, while home loans are an easy way to realize your dream of homeownership, know that a home loan is a long-term commitment. Therefore, one must decide to avail of a home loan after thinking things through.