Construction loans or home construction loans provide funding for building properties, whether it's your home or a real estate project. They help cover initial construction costs before obtaining larger funding. One can also avail a home construction loan for remodeling purposes. Due to the higher risk involved in these loans, construction loans might carry higher interest rates compared to conventional home loans.
Construction Loan Interest Rates
Home construction loan interest rates can vary based on factors such as the lender, the borrower's creditworthiness, loan amount, and prevailing market conditions. Interest rates for construction loans might also differ from those for traditional home loans.
| Banks and NBFCs | Up to ₹30 Lakhs | ₹30 Lakh to ₹75 Lakhs | Above ₹75 Lakh |
|---|---|---|---|
| SBI | 8.40% - 10.15% p.a. | 8.40% - 10.05% p.a. | 8.40% - 10.05% p.a. |
| ICICI Bank | 8.75% p.a. onwards | 8.75% p.a. onwards | 8.75% p.a. onwards |
| HDFC | 8.35% p.a. onwards | 8.35% p.a. onwards | 8.35% p.a. onwards |
| LIC Housing Finance | 8.40% - 10.35% p.a. | 8.40% - 10.55% p.a. | 8.40% - 10.75% p.a. |
| Punjab National Bank | 8.45% - 10.25% p.a. | 8.40% - 10.15% p.a. | 8.40% - 10.15% p.a. |
| Bank of Baroda | 8.40% - 10.65% p.a. | 8.40% - 10.65% p.a. | 8.40% - 10.90% p.a. |
| Federal bank | 8.80% p.a. onwards | 8.80% p.a. onwards | 8.80% p.a. onwards |
| Union Bank of India | 8.35% - 10.75% p.a. | 8.35% - 10.90% p.a. | 8.35% - 10.90% p.a. |
| Tata Capital Housing Finance | 8.70% p.a. onwards | 8.70% p.a. onwards | 8.70% p.a. onwards |
Read More
Read Less
*Note: The interest rates provided above are subject to change. Visit the bank’s/NBFC’s official website for the latest information.Eligibility Criteria For Construction Loan
To avail of home construction financing, individuals need to satisfy the following criteria.
Eligibility for Salaried
- Age Limit: Ranges between 18 to 65 years.
- Citizenship: Must be an Indian citizen.
- Residence: A permanent residence in India.
- Employment: The borrower must be a salaried employee and working for the current employee for at least 1 year.
- Credit Score: Preferably a score of 750 or more.
Eligibility for Self-Employment
- Age Range: From 18 to 65 years.
- Citizenship: Indian citizenship is required.
- Residence: A permanent address is necessary. If the residence is rented, the applicant should have been living there for a minimum of one year.
- Employment: Self-employed individual.
- Credit Score: A credit score of 750 or above is considered good.
Not sure of your credit score? Check it now!
Also get a Free Credit Report
Construction Loan EMI Calculator
Calculate your EMI for your construction loan with this simple and easy to use loan EMI calculator. Just enter your loan amount, interest rate, and loan repayment tenure and get your EMI amount instantly! Calculate now!
Documents Required For Construction Loans
The specific documents required for construction loans can vary depending on the lender and the type of construction project. However, here is a general list of documents commonly required for construction loans:
| Categories | Documents Requires for Home Construction Loan |
|---|---|
| Proof of Identity | Any one of the following: - Aadhaar Cards - PAN Card - Passport - Voter ID Card |
| Proof of Address | Any one of the following: - Aadhaar Card - Utility Bill - Valid Passport - Voter ID Card |
| Proof of Income | Tax Returns (ITR) and income calculations for the individual applicant and the business entity over the past three assessment years, verified by a CA. |
| Financial Statements | (If business) Balance Sheets, Profit & Loss (P&L) statements, and Annexures/Schedules for both the applicant and the business entity over the past three years, certified by a CA. |
| Bank Statement | Account statements for the applicant and the current account statements for the individual or business entity, covering the last six months. |
| Property Documents | - Title Deeds - Estimate for construction - Photocopy of the plan sanctioned by Local Authorities - Encumbrance certificate |
| Additional Documents | - Duly filled application form with passport-size photographs of the applicant/applicants - List of shareholders - Partnership agreement for the business - Proof of own contribution - Bank statements showing payments for existing loans - Cheque for the processing fee made out to the lender |
Read More
Read Less
*Please Note: The lender reserves the right to request additional documents in accordance with their policies.In need of a loan? Apply now!
Features of Construction Loan
Home construction loans come with attractive features and benefits. Check out the major benefits of construction loans:
Tax Advantage
Save Tax under section
80C and 24B.
Attractive Interest
Rates
The interest rates
start at 8.35% p.a.
Long Tenure
Enjoy a long tenure
of up to 30 years
Balance Transfer
Options
Transfer the loan to
another bank for better
rates
Completely Online
Convenient online
application process.
Zero Hidden Charges
No extra hidden charges.
Steps to Apply For Construction Loan
You can also take a personal loan for home construction or renovation purposes. Try Buddy Loan Personal Loan. Follow these easy steps and submit your loan application today.
- Step 1: Visit buddyloan.com or Download & install the Buddy Loan app (Android or iOS).
- Step 2: Open the personal loan application page. Provide the mobile number and enter the received OTP.
- Step 3: Specify the desired loan amount & personal email. Next, choose the Personal Loan option
- Step 4: Choose the employment type (Salaried, Self-Employed, or Student) and the salary mode (bank or cash).
- Step 5: Enter your work details (Including company name, years of service and Designation)
- Step 6: Provide your personal information (Including Full Name, PAN, address DOB & Gender)
- Step 7: Fill out the details of your communication address and income, then click 'Submit'.
Ready to take the next step? Apply now!
- Loans for Restaurants
- Loans for Private Schools
- Loans for Defence Personnel
- Loans for Commercial Shop Purchases
- Loans for Chartered Accountants
- Loans for Buying Land
- Loan for Beauty Parlour
- Loan for Warehouse
- Cold Storage Loan
- Dairy Farm Loan
- E-Commerce Loans
- Animal Husbandry Loan
- Loan for Medical Shop
- Loan for Dental Clinic
- SBI business loan
- HDFC Bank business loan
- Kotak Mahindra Bank business loan
- Axis Bank business loan
- Bank of Baroda business loan
- PNB business loan
- Canara Bank business loan
- ICICI Bank business loan
- IDFC Bank business loan
- IOB business loan
- IDBI Bank business loan
- Bank of India business loan
- Federal Bank business loan
- UCO Bank business loan
- Union Bank business loan
- Yes Bank business loan
- Central Bank of India business loan
- IndusInd business loan
- Indian Bank business loan
- Standard Chartered business loan
- RBL Bank business loan
- Bandhan Bank business loan
Frequently Asked Questions
Construction loans release money in stages as construction milestones are met during the building process.
Types of construction loans include home construction loans and commercial real estate construction loans.
Qualifying for a construction loan typically requires a detailed project plan, cost estimates, and a solid financial profile.
Yes, construction loans can be used for remodeling or renovations of existing properties.
Key factors influencing loan approval for construction projects include a solid project plan, financial stability, and creditworthiness.
Yes, there are specific construction loan options tailored for commercial projects.
Construction loans can be used to build your own home, providing funding throughout the construction phases.
Repayment terms for construction loans vary but often include a short-term, interest-only period during construction, followed by conversion to a traditional mortgage upon project completion.
Display of trademarks, trade names, logos, and other subject matters of Intellectual Property displayed on this website belongs to their respective intellectual property owners & is not owned by Bvalue Services Pvt. Ltd. Display of such Intellectual Property and related product information does not imply Bvalue Services Pvt. Ltd company’s partnership with the owner of the Intellectual Property or proprietor of such products.
Please read the Terms & Conditions carefully as deemed & proceed at your own discretion.
Rated 4.5 on Google Play
10M+ App Installs
25M+ Applicants till date & growing
150K+ Daily Active Users