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
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.
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.
|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|
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 -
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 -
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 -
If you are looking for a loan to construct your house, a home construction loan is the best choice for you. Funds from a house construction loan can be used to purchase a plot as well as renovate an existing house.
The government of India has many schemes for giving subsidized home loans, and house construction loans also have income tax benefits. House construction loans are secured loans and have long tenures, which makes them perfect for huge spending on property.
For getting lower interest rates, you can check with various banks before zeroing in on one lender. Calculating your EMI beforehand also helps you plan your finances in advance, thus making it easier to sail through this big investment.
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.
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