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Importance of Home Loan Sanction Letter and How to Get It

Updated: Aug 28, 2022

We, as human beings, are always in need of more, but eventually, everything boils down to one thing - a home. At the end of the day, the most important security we all require is a shelter, a place we can call our own. To bring your dreams to reality, and to make this a certainty, home loan solutions have been brought to life.

A home loan service provides you with the finances to purchase your dream house. Home loans work on a very simple mechanism.

There are 3 stages involved in a home loan process-

  • Applying for a home loan
  • Getting a sanction letter
  • Disbursement of the requisite funds

To move ahead with the entire process of getting a home loan, getting a sanction letter is a crucial one. Let us understand more about the sanction letter required for a home loan.

What does a home loan sanction letter mean?

A home loan sanction letter allows you to know that the application you made for a home loan has been accepted by the lender. It validates your eligibility for a home loan. The document is provided by the lender to the home loan applicant. The home loan process stands incomplete without a sanction letter being issued to the borrower.

What is the importance of a home loan sanction letter?

As mentioned earlier, the home loan sanction letter is a crucial stage concerning home loans. It is because this letter acts as a loan agreement before actually signing on one. It is proof of your home loan eligibility. The document consists of significant information, such as-

The approved home loan amount

  • The interest rate that will be levied on the loan, and whether the interest rate levied on the borrower will be fixed or floating
  • Base rate for interest calculation
  • The loan repayment schedule of the borrower for the accepted tenure
  • The mode of loan repayment
  • EMI details
  • Tax benefits can be availed from the home loan
  • The sanction letter applicability duration
  • If you are registered under a special scheme, details regarding the same are also included
  • Terms and conditions

Once you receive the sanction letter, you have an opportunity to think about the various terms offered. If you wish to go ahead, you need to communicate the same to the lender by sharing a signed copy of the sanction letter. You also need to submit the sanction letter copy to the property developer or the housing society during the purchasing process.

As we have understood what a sanction letter is and its importance, it is equally important to know the process of getting one. Let us have an understanding about the same in brief.

How to get a home loan sanction letter?

The process of getting a home loan is lengthy, but once you are sanctioned and eligible for a loan, it is worth it. Let us help you understand in detail how to get a home loan sanction letter from a lender.

1. Application stage-

The first step is filling out an application form that you may avail of offline- by visiting the lending institution or getting in touch with them through an online mode, which usually is the lender’s website. You need to provide your details along with the necessary documents.

2. Processing stage-

Once you have applied for a home loan, the details you have provided along with the documents are scrutinized. At this stage, the lender may ask for a processing fee. In some cases, the processing fees charged are waived.

3. Lender verification-

The lender needs to thoroughly verify all the details and documents provided by you, in order to avert any complications or problems later on. In most cases, the lender sends an expert to the property you are purchasing to understand the fair value of the same. The lender also thoroughly verifies all your details, such as your age, income, credit history, and more.

4. Approval-

If the lender is satisfied, you may receive approval from the bank in the form of a sanction letter. Once the terms put forward by the lender are agreeable to you, the disbursement process begins.


Before applying for a home loan, it is crucial to know the process as it makes things simpler for you. Having a healthy credit score is equally important as it forms a vital part of your creditworthiness.

SMFG Grihashakti is committed to help you fulfil your dreams of buying a house and comes with a host of features like attractive interest rates, swift loan application process, longer repayment period and much more. Depending on the availability of documents and your eligibility, a housing loan by SMFG Grihashakti can be sanctioned within 72 hours, post - documentation and verification. Apply today!

Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.

SMFG India Home Finance Co. Ltd. (Formerly Fullerton India Home Finance Co. Ltd.)
CIN number: U65922TN2010PLC076972

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