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What is Sanction Letter in Home Loan?

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0 2022-03-10T20:56:05+00:00
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Hi,

Do you want to know what is a home loan sanction letter? Let me assist you in this. A sanction letter is a document sent to a borrower by a bank or lending institution saying that the house loan has been approved. It lays forth the terms and conditions under which the loan will be granted.

Check out NoBroker home loan services to avail home loans. The sanction letter of home loan contains important information such as:

  • Amount of the mortgage

  • Interest rate in effect (fixed or floating)

  • The interest calculation's starting point

  • Repayment period for a loan

  • Repayment method for loans

  • Payment information for EMIs and pre-EMIs

  • The loan sanction letter's validity

  • Benefits from taxation

  • Special Scheme(if applicable)

After understanding what is sanction letter in home loan, Let us move on to its process. It begins when the borrower completes the loan application form and attaches all required papers. The applicant's paperwork and other financial information are then verified by the bank or housing finance company (HFC). Banks also use credit bureaus to analyse the borrower's credit worthiness and the value of the property used as security. If the lender is satisfied, the sanction letter is issued, confirming the loan's approval.

In most cases, the approval process for a home loan takes three to four weeks. However, if there is a lack of information or insufficient document proofs, a delay may occur.

Thus, to conclude my answer on home loan sanction letter, I would like to say that the sanction letter serves as confirmation of your loan eligibility before you receive a formal loan agreement. It provides you an estimate of your loan, including the monthly EMI you'll have to pay. 

For more legal queries regarding property buy and sell, check out NoBroker legal assistance service.

Read More:

Can I Pay Home Loan EMI Through Credit Card? What Are The Factors We Need To Consider To Avail Home Loan?

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Animesh Srivastava

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