Home

>

Home Loan

>

Home Construction Loan

Home Construction Loans

Building their own house is everyone’s biggest dream. There are home loans that can make this dream come true. To know more about home construction loans, read ahead.

Read More About: Personal Loan for Home Renovation

What is a House Construction Loan

Home loans are long-term secured loans for purchasing a house, plot, or land, and/or building a house on a plot of land. You can use the funds from any home loan as a construction loan.

As house construction loans are secured loans, you can get them very easily even with lower credit scores. Let’s take a look at some major banks’ construction loan interest rates. 

Step into Your Dream Home

Get Home Loans up to ₹3 Crore

Apply Now
Apply Now

Major Banks’ Construction Loan Interest Rates

The loan amount and interest rates may vary depending on the criteria of the borrower. You can know more about construction home loan interest rates of various banks. 

In the following table, interest rates and processing fees of some major banks are mentioned. Please note that these rates are subject to change at the bank’s discretion. The rates given below are prevalent as of 2023.

Bank

Interest Rate

Processing Charge
State Bank of India 9.15% - 11.30% 0.35% (minimum Rs.2,000 and maximum Rs.10,000) 
Union Bank of India 8.50% - 12.65% 0.50% (maximum Rs.15,000) 
Bank of Baroda 8.60% - 10.60% Rs.3,500 - Rs.10,000
UCO Bank 8.55% - 10.30% 0.50% (minimum Rs.1,500 and maximum Rs.15,000) 
Central Bank of India 8.45% onwards 0.50% (minimum Rs.2,500 and maximum Rs.20,000) 
Axis Bank 9.00% - 14% Up to 1.00% 
HDFC Bank 8.75% - 9.40% 0.50% onwards

Home Construction Loan Eligibility and Documents 

The home construction loan eligibility criteria might vary slightly depending on the loan provider. In general, you must meet the following criteria to be eligible for a home construction loan - 

  • Age must be between 21 and 65
  • You must have a steady source of income
  • You must have a decent credit score

Having your documents in order really helps the process of a loan smoother. This is a detailed list of documents required for a home construction loan. The main documents required are listed below - 

  • Duly filled and signed loan application form
  • Identity proof
  • Residence proof
  • Passport size photographs 
  • Income documentation/statement 
  • Documents concerning real estate or property 

Personal Loans from Moneyview as a Construction Loan

Sometimes getting a home loan from a bank might pose a problem. In such cases, you can opt for instant personal loans from moneyview to fund your home construction. There are many benefits of taking a personal loan from moneyview -

  • You can check your eligibility in just 2 minutes on the Moneyview website
  • You don’t need to pledge any collateral to get a personal loan from Moneyview as they are unsecured loans
  • The interest rates start from just 14% per annum
  • The whole process, from application to disbursal happens online and is 100% paperless
  • You can get loans from Rs.5,000 to Rs.10 Lakh depending on your eligibility and requirement
  • You can get loans with a CIBIL or Experian score of just 650
  • Once your loan has been approved and you have submitted the loan agreement, the funds get deposited in your bank account within 24 hours, in most cases
  • You can repay your instant personal loan within 3 months to 5 years, as per your ease

Home Construction Loans - Related FAQs

Once you have decided that you need to take a home construction loan, you should visit various banks to check their terms and conditions. SBI, Central Bank of India, HDFC Bank, etc. are all good options for you, but which bank is best for you depends on your unique case.
You cannot get 100% of the property price as a home loan from the bank, most banks will finance only 80% of the property price. Arranging for a bigger downpayment beforehand is also a good way to reduce the burden of a huge loan.
Yes, you can get tax benefits on the interest component of home construction loans under Section 24. For personal property, you can claim up to Rs.2 Lakh if you complete the construction within 5 years of the sanction of the loan. 
Yes, funds from a home loan can be used to purchase a plot and also to construct a house on it.
Home loans are collateral-free and come with a lot of benefits like long tenures, affordable interest rates, tax benefits, etc.

The starting interest rate depends on factors such as credit history, financial obligations, specific lender's criteria and Terms and conditions. Moneyview is a digital lending platform; all loans are evaluated and disbursed by our lending partners, who are registered as Non-Banking Financial Companies or Banks with the Reserve Bank of India.

This article is for informational purposes only and does not constitute financial or legal advice. Always consult with your financial advisor for specific guidance.

Was this information useful?