Home Construction Loan

A house construction loan is available to customers who own a piece of land and require financial assistance for constructing a house on it. These loans cover the expenses of construction and come with a flexible repayment tenure of up to 30 years.

The following are the key features and benefits of a home construction loan:

• Attractive interest rates starting from just 7.35% 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.

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

The following are some of the best banks for house-building loans in India:

SBI Regular Home Loan

• SBI construction loan interest rates start at 7.50% - 8.45% 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 a 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 8.15% - 9.20% 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.
• A nominal processing fee of 2% of the loan amount.
• Interest rates start at 8.25% p.a.

DHFL Home Construction Loan

• Low interest rate starting at 8.75% p.a.
• Tenure up to 30 years.
• The 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 7.90% - 10.75% p.a.
• Tenure of up to 30 years.
• The processing fee is up to 0.50% of the loan amount.

Bank of Baroda Home Construction Loan

• Top-up loans up to 5 times are available during the loan tenure.
• Loan up to 90% of the property value.
• Interest rates start from 7.50% p.a.
• Loan tenure available up to 30 years.
• Processing fees of up to 0.50% of the loan amount are levied by the bank.

Aditya Birla Housing Finance Home Construction Loan

• Loan up to 90% of the property value available.
• Interest rates for the loan start from 8.80% to 14.75% p.a
• 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 is available.
• A loan amount of up to Rs 1,500 Lakhs is available.
• Low interest rate starting from 9.15% p.a.
• Up to 30 years of tenure available.
• Processing fees of up to 0.50% of the loan amount are charged.
   

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 below 65 years of age when the loan matures.
• Residential status: The applicant can be an Indian resident or a Non-Resident Indian.
• Employment type: The applicant should be a salaried employee working with the current employer for at least the last 1 year.
• Residence: The applicant must have a permanent or a rented residence where they have resided for at least the 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 below 70 years of age when the loan matures.
• Residential status: The applicant can be an Indian resident or a Non-Resident Indian.
• Employment type: The applicant must be either a self-employed professional (SEP) or a self-employed non-professional (SENP).
• Residence: The applicant must have a permanent or rented residence where they have resided for at least the 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.

The following are the documents required for a home construction loan application:

• Duly filled in and signed loan application form
• Identity proof (any one of the following):
  • Aadhaar Card
  • Passport
  • Voter ID Card
  • Driving License
  • PAN Card
• 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 certificates 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 the Local Authorities
  • Estimated construction cost quotation

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

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 details.
• Enter your loan-related details.
• Mention construction under the loan purpose.
• Loan offers will be displayed on your screen as the information provided by you.
• Select the preferred option and apply online.
• Our home loan experts will contact you to complete the process.