Composite Loan

A composite loan, also known as composite house loan, helps you buy a residential plot and build a house on it within a given time frame. In another words, land loan and construction loan when combined is known a composite loan. The composite loan scheme is best for individuals planning to start constructing their houses as soon as possible after buying the land. Anyone who plans to buy a land but does not want to build a house or maybe after five or more years, then they should go for a land loan instead of a composite loan.

Composite Loan Interest Rates from Various Banks/HFCs

Bank/HFC	Interest rate (p.a.)
State Bank of India	7.40% onwards
ICICI Bank	7.70% onwards
Canara Bank	7.30% onwards
Bank of Baroda	7.25% onwards
Aditya Birla Housing Finance Ltd.	9.00% onwards

 Note: The home loan interest rate given in the table are subject to change anytime without prior notice.

Composite Loan Schemes from Various Banks/HFCs

SBI Realty Home Loan

SBI Realty Home Loan allows individuals to buy a piece of land for the construction of their house. However, the house construction should begin within 5 years from the date of availing first disbursement of the loan.

Interest Rate	7.40% onwards
Loan Amount	Up to Rs. 15 crore
Loan Tenure	Up to 10 years
Processing Fees	0.35% – 0.50% of loan amount (Min. Rs. 2,000; Max. Rs. 10,000) + GST

Key Highlights:

• Interest rate concession for women
• No prepayment penalty
• House construction should begin within 5 years from the date of availing first disbursement of the loan
• Allows customers to avail another home loan for the construction of house on plot financed under SBI Realty
• Easy and affordable EMI calculator
• The eligible age limit is 18 – 65 years
• Both salaried and self-employed individuals can apply for the loan

ICICI Land Loan

ICICI land loan can be availed for the purchase of land of an individual residential house. Customers can also avail funds for the construction on such property based on the construction cost estimate.

Interest Rate	7.70% onwards
Loan Amount	Rs. 8 lakh – Rs. 3 crore
Loan Tenure	Up to 20 years
Processing Fees	1.00% – 2.00% of loan amount or Rs. 1,500 (Rs. 2,000 for Mumbai, Delhi & Bangalore), whichever is higher + GST

Key Highlights:

• Can be availed to purchase of a residential plot of land for self-construction
• The property construction must be completed within 2 years from the date of availing first disbursement of the loan
• The plot must be within municipal limits of hub locations or outside municipal limits in case of direct allotment by Development Authority
• The eligible age limit is 25 – 65 years
• Both salaried and self-employed individuals can apply for the loan

Canara Home Loan

Canara home loan is availed for the purpose of house purchase, house construction and house renovation. The loan can also be used for purchasing site and constructing a house thereon.

Interest Rate	7.30% onwards
Loan Amount	For non-salaried: Up to 6 years annual income of the concluded financial year For salaried: Up to 72 months’ salary of the concluded financial year
Loan Tenure	Up to 30 years
Processing Fees	0.50% subject to a min. of Rs. 1,500 and max. of Rs. 10,000

Key Highlights:

• Can be availed to purchase of a residential plot of land for self-construction
• In case of composite home loans, the utilization of the loan amount for plot purchase is limited to 60% of the eligible or sanctioned loan amount
• Eligible age limit 18 – 70 years
• Both salaried and self-employed individuals can apply for the loan
• The repayment shall start within 2 months after the completion of house or 24 months from the date of first disbursement, whichever is earlier

Bank of Baroda Home Loan

Bank of Baroda (BOB) housing loan can be availed for the new / old house purchase, house construction and plot purchase for house construction.

Interest Rate	7.25% onwards
Loan Amount	Up to 10 crores
Loan Tenure	Up to 30 years
Processing Fees	0.25% – 0.50% subject to a min. of Rs. 8,500 and max. of Rs. 25,000

Key Highlights:

• Can be availed to purchase of a residential plot of land for self-construction
• Eligible age limit 21 – 70 years
• Both salaried and self-employed individuals can apply for the loan
• No prepayment penalty
• Offers optional Life Insurance Cover at the cost of borrower, which the bank may fund at the time of loan sanction and is recoverable with the EMIs of the loan

Aditya Birla Plot and Home Construction Loan

Aditya Birla Housing Finance Ltd. offers plot plus construction loan for all those who want to purchase a plot and build a house on it within the next few years. This kind of loan is disbursed in installments.

Interest Rate	9.00% onwards
Loan to Property Value	75% – 90% of property value
Loan Tenure	Up to 20 years
Processing Fees	Up to 1% of the loan amount + GST

Key Highlights:

• Both salaried and self-employed individuals can apply for the loan
• The eligible age limit is 21 – 60 years for salaried, 70 years for self employed
• Quick & transparent processing
• Nil pre-payment charges for floating rate loans

Composite Loan Eligibility Criteria

Individuals planning to apply for composite home loans must check their home loan eligibility to avoid unnecessary loan rejection. The common composite home loan eligibility criteria are as below:

Employment Type	Salaried/Self Employed
Age	18 to 70 years
Credit Score	Preferably 750 and above
Income	Varies from case to case

Documents Required for Composite Loans

Common set of documents required to apply for composite home loans are:

• Duly filled and signed loan application
• Passport size photographs
• Proof of identity(A copy of Aadhaar Card/ Voters ID Card / Passport/ Driving Licence/ PAN Card)
• Proof of residence(A copy of Aadhaar Card / Recent Utility Bills / Property Tax Receipt / Passport / Voters ID Card)
• Signature identification from present bankers
• Last 6 months’ Bank Account Statement / Passbook
• Personal Assets and Liabilities Statement
• Proof of income for salaried persons:
• Salary Certificate (original) from the current employer
• TDS Certificate on Form 16 or a copy of IT Returns for last 2 Financial Years, duly acknowledged by IT Dept.
• Proof of income professionals/self-employed/ other IT assesses:
• Proof of business address
• Acknowledged copies of 3 years Income Tax Returns/ Assessment Orders
• Photocopies of challans showing the payment of Advance Income Tax

Note: The given list of documents is only indicative. Your lender may request for more documents as and when required.

Also Know: What are the documents required for applying housing loan?

Composite Loan FAQs

1. How are Composite Loans different from Land Loans/Plot Loans?
Land loans are availed for the purpose of buying a piece of land only. Composite loans, on the other hand, are availed to purchase a piece of land on which you will build a house within a given time period. In a nutshell, a composite loan is a combination of land loan and construction loan.

A land loan is best for borrowers who want to purchase a land without any immediate plans of constructing a house on it. But if you are planning to buy a land and constructing a house on it in a short span of time, then you should go for composite home loans.

The loan amount, in case of plot loans, is disbursed upfront. But in case of composite loan, the loan amount is disbursed in tranches.

2. How much can I borrow on Composite Loans?
How much you can borrow on composite housing loans depends on several factors such as your income, occupation, age and repayment capacity.

3. How is the loan amount disbursed in case of Composite Loans?
In case of composite loans, lenders usually disburse the amount in tranches or installments. The first installment will be disbursed for land purchase and the subsequent disbursal will be for house construction on the basis of your construction plans and progress.

4. Can I get tax benefit on Composite Loans?
You can get tax benefit on composite loans, subject to certain conditions. The construction of the house must be completed within the stipulated time frame. The maximum deduction of Rs. 2 lakh and Rs. 1.5 lakh on the interest paid on housing loan and principal repayment, respectively, can be claimed from the year in which the house construction is completed.