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A home loan application gets approved or rejected during the sanction stage. The lender gives a home loan sanction letter only after checking the eligibility and verifying the documents submitted by the applicant.

The sanction letter of a home loan is thus, a proof that the loan application has been approved.

What is a Digital Sanction Letter

In the age of digitalisation, the home loan application process has become simpler. A digital sanction letter is a digital copy of the physical sanction letter the lender issues prior to the final agreement. Many top financial institutions offer a hassle-free application process and issuing of the sanction letter.

What Does a Home Loan Sanction Letter Contain?

A sanction letter implies that the lender has approved your home loan application. The letter contains the following with all the terms and conditions related to your loan:

  • Principal amount

  • Applicable rate of interest (floating or fixed) 

  • Loan tenure

  • The base rate for interest calculation

  • Loan repayment mode 

  • Loan processing fees

  • Details of EMI/ pre-EMI payment

  • Tax benefits

  • Home loan sanction letter validity

  • Special scheme (if applicable)

What is the Process of getting a Home Loan Sanction letter?

Approval time for home loans varies across lenders. While some take three to four weeks to sanction the application, some take only 10 to 15 days to complete the loan procedure. In some cases, there may be a delay due to insufficient or missing information or documents.

When you apply for a home loan, there are a few checks that the lender runs. One of them is regarding the financial details, where the lender will verify the documents you submit. If there is any collateral involved, the lender will also evaluate its value. 

Along with all these, the lender will assess your credit score or creditworthiness. If everything is satisfactory, the lender will issue the housing loan sanction letter.

Benefits of a Home Loan Sanction Letter

Here are the benefits of a digital home loan sanction letter you can enjoy:

  • It proves your eligibility to receive the sanctioned loan amount

  • It gives a clear idea about the home loan details, including the EMI you have to pay 

  • If you purchase the home from a developer or a housing society, the home loan sanction letter is a necessary requirement

  • It acts as evidence in case of any dispute between the two parties involved, since it has the terms and conditions

Home Loan Sanction Letter Sample Format

A home loan sanction letter can vary from lender to lender. Here is the general format of the letter:


Dear XYZ,

Thank you for choosing ABC Bank. Based on the application and information provided therein, we are pleased to extend an offer to you for a loan as per the preliminary terms and conditions mentioned below:

Application no:


Sanctioned Date


Applicant Name:


Mobile No:


Loan Type

Home Loan

Home Loan Sanctioned


Reference Interest Rate

X% per annum (Interest Type: Floating rate of interest, Periodicity of Interest Application: Monthly)

Floating Interest Rate

Reference rate applicable at the time of disbursement - xx% per annum

Loan Tenure (In years)

xx years

Total Processing Charges

Up to xx% of the total loan amount

Origination Fee (Inclusive of GST)


Sanction letter validity

xx days from the date of sanction

Amount of EMI (INR)


Property Address


Additional conditions to apply prior to loan disbursal:

  • Repayment from ABC Bank

  • Legal vetting and search to be conducted

  • NOC and offered collateral

  • Confirmation form, official ID and copy of ID

As mentioned, the home loan sanction letter is a document you receive once the lender approves your application. Given that a home loan is a major undertaking with a long-term commitment, ensure that the information listed in this document is accurate. 

FAQS on Home Loan Sanction Letter

What does the home loan sanction letter mean?

A home loan sanction letter is the approval document that the lender sends before the final agreement. It contains all the details regarding the loan, including the amount approved, interest rate, and more. 

What is the difference between a sanction letter, a disbursement letter, and an in-principle approval letter?

The difference between these documents is with regards to when the lender issues them and the information they contain. An ‘in-principle’ approval letter is generally issued after assessing your financial status. It guarantees that the lender will provide the loan after successfully verifying the submitted documents. 


A sanction letter is a document that shows the loan amount you are eligible for and other loan terms and conditions. The disbursement letter is a document issued when the lender disburses the loan amount to your account. It also contains the total loan amount paid by the lender.

What happens after you receive the loan sanction letter?

Once you receive the home loan sanction letter, the lender sends a certified offer letter that mentions essential details about the loan. After understanding the details, terms, and conditions, you must sign an acceptance copy and submit it to the lender.

How long does a home loan sanction take?

Getting a home loan sanction can take 3 to 4 weeks once you submit all the necessary documents. However, the time may vary depending on your application and the lender you choose.

Can a sanctioned loan be cancelled?

Yes. A home loan sanction letter is not a final loan agreement. Generally, this happens if the lender finds any discrepancy in the documents submitted or if you fail to complete the formalities.

What causes the delay in the sanction of loans?

A delay in the sanction of loans can occur if the applicant fails to submit all the required documents on time or provides any incorrect details in the application.

Can I get a home loan sanction letter online?

Yes. You can get a home loan sanction letter online if the lender issues one in digital format.

What is the validation period for a home loan sanction letter?

The home loan sanction letter validity changes depending on the lender. However, it is usually 180 days or 6 months.

How do I know if my loan is approved?

If the lender approves your loan application, you will receive an indication from the lender through a house loan sanction letter. You can also check the status of your home loan application online on the lender’s official web portal.

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