Sanction Letter

After you apply for a home loan, the bank checks your income, your existing loans and your credit history. If it is satisfied, it issues a sanction letter. This says how much it is willing to lend, at what interest rate, for how many years, and on what conditions. No money moves yet. That comes with disbursement, once the property passes the bank’s legal and technical checks.

Getting a sanction early tells you your real budget, before you commit to a home. It also gives you something to negotiate with: you know you can pay. Many banks offer an in-principle approval first, based on your profile, and a full sanction once the property is chosen.

The letter is not open-ended. It usually has a validity period, and the bank may revise it if your income, the property or the rate changes before disbursement. Keep your finances steady between sanction and disbursement: avoid new loans or a job change if you can.

• Loan amount, and whether it depends on the property’s valuation.
• Interest rate: fixed or floating, and the benchmark it is linked to.
• Tenure and the EMI it implies.
• Processing fees and any other charges.
• Conditions before disbursement, such as documents or insurance.
• The validity date.

Check the EMI in our EMI calculator to be sure it fits your monthly budget.