Home Construction Loan is for customers who own a piece of land and require financial assistance to construct their home. Home loan allows easy management of a diverse range of expenditures involved in construction and has a repayment period of up to 30 years.
Features and Benefits of Home Construction Loan
Mentioned below are some of the salient features and benefits linked with Home Construction Loan.
- Attractive interest rates
- Longer tenure of up to 30 years
- High loan-to-value ratio of up to 100% of the construction estimate or 90% of the property value, whichever is lower
- Generous Tax benefits
- Availability of balance transfer facility (offered by most of the leading providers)
- Availability of top-up facility (offered by most of the leading providers)
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Home Construction Loan Interest Rate & Processing Charges
The table below shows Home Construction Loan interest rates and processing charges for the leading providers.
|Provider Name||Interest Rate||Processing Charges*|
|SBI||7.95% onwards||0.40% of the loan amount+Applicable Tax|
|HDFC Bank||8.00% onwards||0.50% of the loan amount+Applicable Tax|
|ICICI Bank||8.90% onwards||0.50% of the loan amount+Applicable Tax|
|Punjab National Bank||7.95% onwards||0.35% of the loan amount+Applicable Tax|
|Axis Bank||8.55% onwards||1% of the loan amount+Applicable Tax|
|Canara Bank||8.05% onwards||0.50% of the loan amount+Applicable Tax|
|Bank of India||8.10% onwards||0.25% of the loan amount+Applicable Tax|
|YES Bank||9.85% onwards||2% of the loan amount+Applicable Tax|
Home Construction Loan Eligibility Criteria
Here are some of the pre-requisites to be eligible to apply for a Home Construction Loan.
Maximum: 70 years
|Nature of Work||Salaried/Self-Employed|
|Credit Score||750 or above|
Over and above this, there are several other factors like an applicant’s income, liabilities, assets owned, etc., which are evaluated by the provider to determine the eligibility of a customer.
Following are the documents required in order to apply for a Home Construction Loan.
- Duly filled application form
- Age proof
- Income proof/Bank Statement
- Address proof
- Property/land-related documents
- Estimated construction cost quotation
Note: This list is non-exhaustive. Additional documents may be required based on the applicant’s profile and the lender’s requirement.
How to Apply for Home Construction Loan
Customers can apply online for Home Construction Loan through Paisabazaar.com by simply following the below-mentioned steps.
- Go to Home Construction Loan section at paisabazaar.com
- Fill out the required field and agree to the given terms & conditions
- Enter your personal and loan-related details
Now, few eligible loan options will appear. Compare and apply for a home loan that suits your requirements.
Q1. In how much time will I get the loan amount?
The time taken for disbursal of the loan amount varies from lender to lender.
Q2. Is it mandatory to have a co-applicant to avail Home Construction Loan?
You do not require a co-applicant to avail Home Construction Loan. However, if there are multiple owners of the land, it is mandatory to include them as co-applicants.
Q3. What are the tax benefits linked with Home Construction Loan?
You can avail tax benefits under section 80C and 24 of the Income Tax Act, 1961. Further, you can also claim an additional deduction if you are a first-time homebuyer. This benefit falls under Section 80EE of the Income Tax Act. For this, the total value of the home loan must be under Rs. 35 lakh and the home’s value must be under Rs. 50 lakh.