Sanction Letter
What Sanction Letter means
An official document issued by the lender confirming loan approval with the amount, interest rate, tenure, EMI, and all applicable charges. Valid for 3–6 months; disbursement must occur within this window.
Example
A ₹75 lakh home loan sanction letter at 8.75% for 25 years specifies the EMI as ₹61,500, processing fee of ₹25,000, and validity of 90 days from issue date.
This definition is based on RBI – Fair Practices Code ↗. We link every figure to its primary source — see our data methodology.
Related documentation terms
- ECSThe older RBI-managed system for automated periodic debits (EMIs, insurance premiums) from bank accounts; being progressively replaced by the more robust NACH platform.
- Encumbrance CertificateA document issued by the sub-registrar's office listing every registered transaction (mortgage, sale deed, release deed) against a specific property for a requested time period.
- Index IIA certified extract from a sub-registrar office summarising all documents registered against a property — sale deeds, mortgages, release deeds — for a specified period.
- Key Fact StatementA standardised, one-page document mandated by RBI that lenders must provide to all retail loan applicants before disbursal, disclosing the Annual Percentage Rate, all fees, and reset terms.
- KYCThe regulatory process of verifying a customer's identity and address before providing financial products, mandated by RBI and SEBI to prevent fraud and money laundering.
- NACHThe standardised, centralised payment infrastructure operated by NPCI enabling banks and businesses to process high-volume, recurring debit mandates — including loan EMI auto-debits.