Before signing or paying non-refundable charges, turn the sanction into a one-page control sheet. The goal is to know exactly what can change between sanction, disbursement and final repayment.
Twenty clause groups to check
| # | Clause | Question |
|---|---|---|
| 1 | Sanctioned amount | Maximum or committed amount? |
| 2 | Loan-to-value/margin | How much cash must you contribute? |
| 3 | Interest benchmark | Repo/external/MCLR/other? |
| 4 | Spread | Fixed for life or changeable under stated conditions? |
| 5 | Reset frequency | When does rate change hit you? |
| 6 | EMI/tenure response | Which changes first? |
| 7 | Processing fee | Refundable or non-refundable? |
| 8 | Other fees | Legal, valuation, documentation? |
| 9 | Insurance | Optional, bundled or financed? |
| 10 | Security/property | Exact documents/charge required? |
| 11 | Conditions before disbursal | What must be completed first? |
| 12 | Stage disbursal | How does construction-linked release work? |
| 13 | Pre-EMI | How is interest handled before full disbursal? |
| 14 | Prepayment | What current rules/contract apply? |
| 15 | Foreclosure | Documents, process, possible charges? |
| 16 | Late/default charges | Exact trigger and calculation? |
| 17 | Property insurance | Required scope and renewal? |
| 18 | Covenants | What events must you notify? |
| 19 | Validity | When does the sanction expire? |
| 20 | Grievance/contact | Who owns errors after disbursal? |
Recalculate the rate shock
Use the sanctioned balance and term to model +1 and +2 percentage-point rate cases. The RBI’s current floating-rate reset FAQ emphasises communication of EMI/tenor impact and borrower options. Your letter should make the benchmark and reset mechanics identifiable.
Do not accept oral exceptions
If a salesperson says a fee will be waived, insurance is optional, or a condition “will not apply to you”, ask for that in the sanction/official communication. The signed document controls far more than a sales call.
Check the property conditions separately
A loan sanction is not a guarantee that the property’s legal/technical review is complete. Identify conditions that remain pending and do not release non-refundable purchase money merely because credit approval exists.
Decision rule: sign only when you can explain the interest formula, cash contribution, all meaningful fees, disbursement conditions, rate-reset effect and exit process without asking the salesperson to translate the letter for you.