Home Construction Loan

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.

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.

Additional Info: Looking for 1 Crore Home Loan? Check EMI & Apply

Loan amountUp to 90% of the construction value
TenureUp to 30 years
Rate of interest6.50% 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 6.50% 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 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 top-up loan facility.

Additional Info: You can also check Best Home Loan Interest Rates

Home Construction Loan Interest Rates of All Banks - 2022

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
SBIStarting at 6.70% p.a.0.40% of the loan amount + GST
ICICI BankStarting at 6.70% p.a.0.50% of the loan amount + GST
HDFC BankStarting at 6.70% p.a. 0.50% of the loan amount + GST
Bank of BarodaStarting at 6.50% p.a.1% of the loan amount + GST
Punjab National BankStarting at 6.75% p.a.0.35% of the loan amount+Applicable Tax
YES BankStarting at 9.85% p.a.2% of the loan amount + GST
Canara BankStarting at 6.65% p.a.0.50% of the loan amount + GST
Bank of IndiaStarting at 6.50% p.a.0.25% of the loan amount + GST

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.

Additional Info: Also check Pan Number for Banks

Documents Required for Home Construction Loan

Following are the documents required for 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 CardVoter 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.

Additional Info: Looking for 50 Lakh Home Loan? Check EMI & Apply

Best Banks for Home Construction Loan

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

SBI Home Construction Loan

  • SBI construction loan interest rates starts at 6.70% p.a.
  • Tenure up to 30 years.
  • Concession in interest rate for women applicants.
  • Zero prepayment charges.
  • EMI starts from Rs. 645 per lakh.
  • 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 6.75% p.a.
  • Lowest EMI offered is Rs. 649 per lakh.
  • 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 6.75% p.a.
  • Lowest EMI is Rs. 649 per lakh.

DHFL Home Construction Loan

  • Low interest rate starting at 6.90% p.a.
  • Tenure up to 30 years.
  • Lowest EMI is Rs. 659 per lakh.
  • 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 6.65% p.a.
  • Tenure of up to 30 years.
  • Lowest EMI is Rs. 642 per lakh.
  • 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 6.50% p.a.
  • Loan tenure availabke up to 30 years.
  • Lowest EMI possible is Rs. 632 per Lakh.
  • 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 9.00% p.a
  • Loan tenure of up to 30 years is available based on eligibility.
  • Lowest EMI of Rs. 805 per Lakh available. 
  • 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 8.05% p.a.
  • Up to 30 years of tenure available.
  • Lowest EMI possible is Rs. 737 per Lakh.
  • Processing fees of up to 0.50% of the loan amount is charged.

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.

Additional Info: You can also Check Banglarbhumi West Bengal Land Record

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Home Construction Loan FAQs

✅ How much loan amount can I get for home construction?

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?

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?

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?

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.

✅ What are the tax benefits for home construction loans?

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.