Individuals planning to avail themselves of a home loan must read extensively to be able to navigate the application process smoothly as well as to enjoy quick approval and good negotiating power. 

Tips on how to decide the right loan amount and tenor and tips on how to secure low-interest home loans are some of the most discussed aspects of home loans. Several articles on these topics have been written already and are doing the rounds on the internet. 

However, not many people discuss other aspects of the home loan process, such as the home loan sanction letter. In this article, we focus on home loan sanction letters, the process to avail yourself of one and its importance. So, read on. 

What is the Home Loan Sanction Letter? 

First things first, the home loan sanction letter is not the final loan offer letter. It is simply a document that reflects your lender’s intention of extending you a home loan. Ideally, a home loan sanction letter should contain the following details: 

1. The total loan amount that your lender is willing to sanction you
2. The home loan interest rate that your lender will charge you 
3. The loan tenor over which you are required to repay the loan
4. Details about the interest rate type being offered to you 
5. The home loan EMI you will have to pay each month 
6. Details about the validity of the home loan sanction letter
7. Any special terms and conditions or requirements that must be fulfilled before disbursal

Once you receive the home loan sanction letter, go through it carefully. Do remember that the terms and conditions mentioned in your home loan sanction letter are not absolute. If you find any loan terms and conditions disagreeable or unfavourable, discuss them with your lender. 

Reason with them and get them to agree to what you have in mind or reach a middle ground. In any case, never sign a home loan sanction letter without fully understanding and agreeing to everything outlined in it.  

Let us now discuss the process to avail of the home loan sanction letter in India. 

Home Loan Sanction Letter: Here’s How to Avail Yourself of One

The process to avail of a home loan sanction letter is fairly basic. Follow these steps to get a home loan sanction letter. 

1. Apply for a home loan by filling out the home loan application form. Fill out the form properly with all the required details. 
   
2. Attach the required documents and pay the one-time home loan processing fee. Please know that the home loan processing fee is non-refundable. 
   
3. Submit the form and wait for your lender to get back to you. 
   
4. If the lender you have applied to decides to extend you a home loan, they will ask you to submit certain documents, such as address and income-proof documents, identity-proof documents, etc. 
   
5. Once you have submitted all the documents, your lender will verify all the information provided by you. They will assess your age, income, and credit score and also take into account your current debt-to-income ratio while deciding the home loan to be extended to you. 
   
6. If you successfully pass the document verification stage, your lender will start working on your home loan sanction letter. After you receive the home loan sanction letter, go through it carefully.
   
   Hire the services of an expert to help you understand the terms and conditions that are disagreeable to you. Negotiate for better home loan terms and conditions, if not entirely satisfied.
   
   The current home loan rates in India start from 8.30% per annum. Try to negotiate for as low a home loan interest rate as possible to get maximum home loan ROI.  
   
7. Once you are satisfied, sign the home loan sanction letter and send a soft copy of it to your lender. Your lender will now start working on the final loan agreement or the final home loan offer letter.  
   
8. Go through the final home loan offer letter carefully. Then, go to your lender’s office and sign the letter. 
   
9. Your lender will now release the home loan amount into your loan account. 

Final Words

In this day and age when home loans on WhatsApp are a normal thing, home loan applicants must be extra cautious about choosing the right lender for them. Sometimes, the availability of too many options can make one complicit and lead to making wrong choices. Avoid making such a mistake.