Home Loan Sanction Letter

It’s a fact that the process of availing a Home Loan is long and tedious, not only for you but even for the lender. It is the most valuable form of loan as it keeps going on for a long tenure and the amount of funds is huge. A home loan is a big decision and needs to be taken only when one feels the affordability to handle it. From EMI to down payment, it takes an involvement of a huge amount of capital.  Because the Home Loan has got such importance, it’s vital that the intentions of the lender are well scripted in a document, which reading and going through is a must before signing the deal. Each and every document is very important while you apply for a home loan. The very first one that you receive from your loan provider is the home loan sanction letter. This is a very formal document and has a lot of information and importance. If you are applying for a home loan for the very first time, you need to understand every aspect of a home loan sanction letter. 

What is a home loan? 

Firstly, before you delve into a home loan sanction letter, you need to pay heed over the home loan concept. Home loan is a fixed end usage loan pattern that can be used directly for buying the home. The 90% of the property amount comes under the home loan and the rest needs to be paid by the homeowner as down payment. It is a one time disbursement and often generates for a long-term due to the large amount of funds. A home loan can be affordable when you meet your eligibility criteria and get a low rate of interest along with low charges. It is helpful to go for a long-term so that the EMI stays under control every month. If you need a home loan, you must start working early from arranging your down payment to managing your eligibility criteria. 

What is a home loan sanction letter? 

A home loan sanction letter comes after your loan application has been approved. This is a formal document that is stated by the loan provider to the borrower. A formal document can be passed on in hard copy or a soft copy. This letter can be used for understanding the fact that your loan has been sanctioned. It mentions the amount of loan that has been sanctioned. For the home loan that you have applied for, this letter is a formal recognition of home loan sanction. It is very different from the loan agreement. A loan agreement has every detail about your loan, EMI, rate of interest and tenure. A home loan sanction letter states the written fact in a formal approach that your loan application has been approved. Now, after you have received it and your loan provider does not give you a loan within the six months, you can look for other options. It signifies that your eligibility has been met and on meeting the housing loan eligibility criteria your home loan application has been approved. This is a mere formal approval so do not expect all your loan details as that you will get in your loan agreement. 

Importance of home loan sanction

  • A formal approval will help you get a piece of mind and also a formal proof that your loan provider has accepted and approved your loan application. Since the formal letter states that your eligibility is perfect and your loan application has been approved, this document is a piece of happiness and a sign of proof for you. This is the very first document that you will receive that states the confirmation of your home loan approval. 
  • You will know the amount of loan that you have asked for and the amount that has been sanctioned. This will give you a prior notification about the money that you have to arrange if they have not sanctioned the particular amount that you have asked for. This gives you enough time to arrange the extra money that your financial institution has not approved. You can surely start arranging the money and then go for the purchase. 
  • It will let you know the rate of interest and that you will have to repay the loan EMIs on. It also mentions if your loan will have a fixed or the floating interest rates. The rate of interest detail will be mentioned here, so that you make a decision to accept it or reject it. 

Wrapping up

When it is about housing loan eligibility you always need a good credit score. A home loan sanction letter is a formal piece of document that assures your approval with a particular loan provider. You need to accept it within a period of time or else it gets void. For a home loan, Clix Capital is the best way to receive your home loan sanction letter quickly. 

By Anurag Rathod

Anurag Rathod is an Editor of Appclonescript.com, who is passionate for app-based startup solutions and on-demand business ideas. He believes in spreading tech trends. He is an avid reader and loves thinking out of the box to promote new technologies.