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Home Construction Loan

Many banks and financial institutions offer affordable building construction loan at lowest Home Loan Interest Rate to help you with the construction of a house or residential property. The process involves easy documentation and flexible repayment tenure.

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Home Construction Loan Details

House Construction Loan is availed of by those customers who own a piece of land and need financial assistance for the construction of a house thereon. These loans cover expenses of construction and come with flexible repayment tenure of up to 30 years.

Loan amountUp to 90% of the construction value
TenureUp to 30 years
Rate of interest8.35% p.a. onwards
Age21 to 70 years
Tax benefitsUp to Rs. 2 Lakhs on interest & Rs. 1.50 Lakhs on principal amount

Home Construction Loan Features and Benefits

Following are the key features and benefits of home construction loan:

  • Attractive interest rates starting from just 8.35% p.a.
  • Long repayment tenure of up to 30 years.
  • High loan to value (LTV) ratio of up to 100% of the construction value or 90% of the property value, whichever is lower.
  • Tax benefits on Home Loan of up to Rs. 2 Lakhs on interest and up to Rs. 1.50 Lakhs on principal amount
  • Availability of loan balance transfer facility.
  • Availability of Home Loan Top-up facility.

Looking for 50 Lakh Home Loan? Check Interest rates, Eligibility and EMI Online!

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Home Construction Loan Interest Rates of All Banks - 2023

Below is the table for home construction loan interest rates as well as processing fees for all leading banks:

Bank NameRate of Interest Processing Fees
SBI8.40% - 10.05%0.40% of the loan amount + GST
ICICI Bank9.00% - 10.05%0.50% of the loan amount + GST
HDFC Bank8.55% - 9.10%0.50% of the loan amount + GST
Bank of Baroda8.40% - 10.60%1% of the loan amount + GST
PNB Housing Loan8.50%0.35% of the loan amount+Applicable Tax
YES Bank9.40% - 10.25%2% of the loan amount + GST
Canara Bank8.40% to 11.75%0.50% of the loan amount + GST
Bank of India8.30%0.25% of the loan amount + GST

Additional Info: You can also check Best Home Loan Interest Rates starting @ 8.35%

Top Banks for Home Construction Loan

Following are some of the best banks for house building loan in India:

SBI Regular Home Loan

  • SBI construction loan interest rates starts at 8.40% - 10.05% p.a.
  • Tenure up to 30 years.
  • Concession in interest rate for women applicants.
  • Zero prepayment charges.
  • Processing fee is 0.35% of the loan amount, subject to a minimum of Rs. 2,000 and maximum of Rs. 10,000.

HDFC Home Construction Loan

  • The loan can be availed for constructing a house on a residential plot/Development Authority allotted plot.
  • Long loan tenures up to 30 years.
  • Competitive interest rates starting from 8.55% - 9.10% p.a.
  • Processing fee is up to 0.50% of the loan amount for salaried and up to Rs. 1.50% of the loan amount for self-employed.

PNB Home Construction Loan

  • Extended loan tenure of up to 15 years.
  • Simple documentation & instant processing.
  • Nominal processing fee of 2% of the loan amount.
  • Interest rates start at 8.50% p.a.

DHFL Home Construction Loan

  • Low interest rate starting at {{DHFL_BANK_HL_INTEREST_RATE}} p.a.
  • Tenure up to 30 years.
  • Processing fee is Up to Rs. 20,000.

Canara Bank Home Construction Loan

  • The loan is available for salaried as well as self-employed borrowers
  • Zero prepayment charges.
  • Affordable interest rate starting from 8.40% to 11.75%% p.a.
  • Tenure of up to 30 years.
  • Processing fee is up to 0.50% of the loan amount.

Bank of Baroda Home Construction Loan

  • Top-up loans up to 5 times available during the loan tenure.
  • Loan up to 90% of property value.
  • Interest rates start from 8.40% - 10.60% p.a.
  • Loan tenure available up to 30 years.
  • Processing fees of up to 0.50% of the loan amount is levied by the bank.

Aditya Birla Housing Finance Home Construction Loan

  • Loan up to 90% of property value available.
  • Interest rates for the loan start from 8.80% to 14.75% p.a
  • Loan tenure of up to 30 years is available based on eligibility.
  • A processing fee of up to 1% of the loan amount is charged.

Federal Bank Home Construction Loan

  • LTV of up to 85% of the property cost available.
  • Loan amount of up to Rs.1,500 Lakhs available.
  • Low interest rate starting from 8.80% p.a.
  • Up to 30 years of tenure available.
  • Processing fees of up to 0.50% of the loan amount is charged.

Additional Info: Also Check Best Banks for Home Loan in India in 2023

lowest interest rate home loan

Home Construction Loan Eligibility Criteria

Below are the detailed home construction loan eligibility criteria for salaried and self-employed applicants:

Eligibility for Salaried Applicants

  • Age: The applicant should be at least 21 years old when applying for the loan and bellow 65 years of age when the loan matures.
  • Residential status: The applicant can be Indian resident or Non-Resident Indian.
  • Employment type: The applicant should be a salaried employee working with the current employer for at least last 1 year.
  • Residence: The applicant must have a permanent or a rented residence where they have resided for at least last 1 year before applying for the loan.
  • Credit score: The applicant must have a good Credit Score of 750 or more as per the recognised credit bureau.

Eligibility for Self-employed Applicants

  • Age: The applicant should be at least 21 years old when applying for the loan and bellow 70 years of age when the loan matures.
  • Residential status: The applicant can be Indian resident or Non-Resident Indian.
  • Employment type: The applicant must be either a self-employed professional (SEP) or a self-smployed non-professional (SENP).
  • Residence: The applicant must have a permanent or a rented residence where they have resided for at least last 1 year before applying for the loan.
  • Credit score: The applicant must have a good credit score of 750 or more as per the recognised Credit Bureau.

You can also Apply for Kotak Home Loan and check EMI, Interest rate and Eligibility Online to avail offer.

Documents Required for Home Construction Loan

Following are the documents required for home construction loan application:

Additional Info: Looking for Plot Loan

  • Duly filled in and signed loan application form
  • Identity proof (any one of the following):
  • Address proof (any one of the following):
    • Passport
    • Aadhar Card/Voter ID Card
    • Employer ID Card
    • Utility Bills
  • Income proof:
    • Income Tax Returns & latest Form 16
    • Salary account statements with salary credits for the last 6 months.
    • Salary slips/ salary certificate for the last 3 months.
  • Property-related documents:
    • Title Deeds of the Plot
    • Encumbrance Certificate
    • Estimate for the construction assessed by a Civil Engineer or an Architect
    • Copy of the approved plan sanctioned by Local Authorities
    • Estimated construction cost quotation

*This above-mentioned documentation list may vary based on the applicant’s profile and the lender’s requirement.

Also Check Pan Number for Home Loan of All the banks Online through MyMoneyMantra

How to Apply for Home Construction Loan?

You can apply for a home construction loan online through mymoneymantra.com by simply following the steps given below:

  • Go to our website and click on the Home Loan tab.
  • Enter the required details to fill up the form.
  • Enter your personal details.
  • Enter your loan-related details.
  • Mention construction under the loan purpose. 
  • Loan offers will be displayed on your screen as the information provide by you.
  • Select the preferred option and apply online. 
  • Our home loan experts will contact you to complete the process.

You can now check 35 Lakh Home Loan EMI Apply Online.

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Home Construction Loan FAQs

✅ Which loan is Best for Home Construction?

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SBI Regular Home Loan, HDFC Home Construction Loan, DHFL Home Construction Loan, Canara Bank Home Construction Loan, PNB Home Construction Loan, and Bank of Baroda Home Construction Loan are some of the best loans for home construction.

✅ Can I get a Loan for the Plot and Construction?

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Yes. As buying land and constructing a home on it can be expensive, lenders allow borrowers to get a plot and construction loan together. For this, borrowers are required to provide the details of the land they wish to purchase and details of the construction of the property to the lender.

✅ What is a Plot Construction Loan?

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A plot Construction Loan is a type of housing loan which can be availed of to purchase a residential plot and then construct a house on it within the stipulated time. If a borrower cannot commence construction within the decided period, the bank can increase the interest rate on loan.

✅ Can we get a Home Loan on the Plot?

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No. Instead, you can get a loan against your plot and use it for other personal purposes. A home loan is provided only against the mortgage of the property to be purchased.

✅ Can I Buy Land with a Home Loan?

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No. If you want to buy a plot, you can apply for a land loan or plot loan. Home loans are available only for the purchase of property that is already constructed, under construction or about to undergo construction soon. You will have to apply for a land loan to fund the purchase of a vacant plot.

✅ How much Loan Amount can I Get for Home Construction?

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Under new construction loans, you can get up to 100% of the construction value or 90% of the property value, whichever is lower.

✅ From Where can I Get a House Construction Loan?

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Most of the banks and financial institutions like SBI, Axis Bank, HDFC Bank, ICICI Bank, Federal Bank, etc., offer home construction loans in India. You can either apply online through the lender’s website/ mobile app or visit the branch office of the lending institution. 

✅ Which Banks are Best for Home Construction Loans?

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SBI, HDFC Bank, and ICICI Bank are some of the best banks for construction loans.

✅ What credit score is required for a home construction loan?

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You need a credit score for home loan of at least 750 or above to be eligible for a home construction loan. However, some banks may also offer these loans on a credit score of 650 or above.

✅ What are the tax benefits for home construction loans?

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You can get tax benefits of up to Rs. 2 Lakhs on interest and up to Rs. 1.50 Lakhs on principal amount. The tax benefits for home construction loan fall under Section 80EE of the Income Tax Act. To avail these benefits, the total value of the loan must be under Rs. 35 Lakhs and the home’s total value must be under Rs. 50 Lakhs.