Understand the difference between a home loan sanction letter and a disbursement letter. Learn when each document is issued, what details they contain, and why both are important in the home loan approval and fund release process. Planning to take a home loan? It is important to understand the difference between a home loan sanction letter and a disbursement letter before proceeding with the loan process. A sanction letter is issued by the lender after your loan application is approved and contains important details such as the sanctioned loan amount, interest rate, repayment tenure, EMI structure, and terms & conditions. On the other hand, a disbursement letter is issued when the approved loan amount is released to the borrower or builder as per the agreement.