Home Loan Sanction Letter – Know Its Importance
It’s a fact that the process of availing a Home Loan is a long and tedious, not only for you but even for the lender. Because the Home Loan has got such importance, it’s vital that the intentions of the lender are well scripted in a document, whom reading and going through is a must before signing the deal.
For availing a housing loan affordably, you can count on leading online lenders such as non-banking finance company as they charge lower Housing Loan rates as well low processing fees.
Your lender gives you a document which states what you are getting in a home loan which is called the Home Loan sanction letter. You must have heard about the concept of the loan sanction letter which one gets after being ready to get the loan amount.
Let’s provide you the concept of the loan sanction letter and its vitality in this short post:
What is the Home Loan Sanction Letter?
A Home Loan sanction letter is a formal receipt or acknowledgement from your bank or other lenders mentioning that you are found eligible for the Home Loan. Yes, it mentions that your application was found correct, and your desired loan amount will soon be disbursed into your bank account once the verification is over.
One of the differences that you need to understand is that a loan sanction letter is different from the final loan agreement or the deal that you will sign.
Overall, the loan sanction letter is only a formal indication from the lender stating that you are eligible for the applied housing loan.
The validity of the loan sanction letter is generally for the six months. If the lender does not finalize the housing loan amount within the period, you are bound to be offered another letter. If that happens, it means that you will need to wait a bit longer for the funds to be credited into your bank account.
What Contents the Home Loan Sanction Letter that Makes it Important?
Here are the contents of the loan sanction letter that makes it such a vital document for people opting for a house loan.
- It mentions that your applied loan amount is approved, and if it is not the full amount that you asked, you will know if you need to arrange rest money on your own
- It lets you know the interest rates 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
- It also informs you about the overall tenor of the loan or in other words in how many months or years you can repay the loan in easy EMIs
- The sanction letter also mentions about any pre-EMI charges that you will have to bear
- The overall period of the letter or its validity is also mentioned in the letter
- The letter also has the provision to include the fine prints of the loan. It is mandatory for any loan borrower to be aware of the terms and conditions of the loan so that it’s easier to manage it once it’s active till the end
The Bottom Line
The Home Loan sanction letter is generally handed over to a borrower after the lender examines all the documents that you have furnished. The submitted documents required for home loan is verified to know if you will repay the loan amount.
Now that you know the concept and importance of the House Loan sanction letter, it will help you approach the Housing Loan confidently!