Also called: Loan sanction letter, In-principle approval
The lender's letter approving a loan in principle, stating the amount, rate, tenure and conditions. Money is released only after the property and documents are cleared.
How it works and what to check
The sanction letter usually has a validity period and a list of conditions: legal and technical clearance of the property, own contribution paid, insurance and so on.
Check the rate type and benchmark, the spread, processing fees and prepayment terms before you accept.
Common questions
Is a sanction letter a guarantee of the loan?
No. The loan is released only if the property and documents meet the bank's conditions.
How long is a sanction letter valid?
For the period stated in it, commonly a few months.