Many banks and financial institutions offer affordable home construction loan at attractive interest rate to help you with the construction of a house or residential property. The process involves easy documentation and flexible repayment tenure.
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.
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|Loan amount||Up to 90% of the construction value|
|Tenure||Up to 30 years|
|Rate of interest||6.50% p.a. onwards|
|Age||21 to 70 years|
|Tax benefits||Up to Rs. 2 Lakhs on interest & Rs. 1.50 Lakhs on principal amount|
Following are the key features and benefits of home construction loan:
Additional Info: You can also check Best Home Loan Interest Rates
Below is the table for home construction loan interest rates as well as processing fees for all leading banks:
|Bank Name||Rate of Interest||Processing Fees|
|SBI||Starting at 6.70% p.a.||0.40% of the loan amount + GST|
|ICICI Bank||Starting at 6.70% p.a.||0.50% of the loan amount + GST|
|HDFC Bank||Starting at 6.70% p.a.||0.50% of the loan amount + GST|
|Bank of Baroda||Starting at 6.50% p.a.||1% of the loan amount + GST|
|Punjab National Bank||Starting at 6.75% p.a.||0.35% of the loan amount+Applicable Tax|
|YES Bank||Starting at 9.85% p.a.||2% of the loan amount + GST|
|Canara Bank||Starting at 6.65% p.a.||0.50% of the loan amount + GST|
|Bank of India||Starting at 6.50% p.a.||0.25% of the loan amount + GST|
Below are the detailed home construction loan eligibility criteria for salaried and self-employed applicants:
Eligibility for Salaried Applicants
Eligibility for Self-employed Applicants
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Following are the documents required for home construction loan application:
*This above-mentioned documentation list may vary based on the applicant’s profile and the lender’s requirement.
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Following are some of the best banks for house building loan in India:
You can apply for a home construction loan online through mymoneymantra.com by simply following the steps given below:
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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.
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.
SBI, HDFC Bank, and ICICI Bank are some of the best banks for construction loans.
You need a credit score 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.
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.