Constructions Loans

Building Your Dream Home with Home Construction Loans

Banks and housing finance companies (HFCs) offer home construction loans to help you turn your dream of building a house into a reality. Whether you’re a first-time homebuyer or looking to add an extra level to your existing property, these loans are designed to make the process more accessible and affordable.

Key Benefits of Home Construction Loans

With a home construction loan, you can enjoy a flexible repayment period of 5-30 years, keeping your EMI load low and the loan costs manageable. What’s more, the principal and interest paid on the loan are tax-deductible under Sections 80C and 24B, offering a tax credit of up to Rs. 2 lakhs on interest and Rs. 1.50 lakh on principal. First-time homebuyers can also benefit from an additional tax advantage of up to Rs. 50,000 under Sec 80 EE.

Eligibility and Loan Amount

The amount you can borrow depends on your income, repayment history, and creditworthiness. You can avail up to 90% of the property’s value, and adding a co-applicant can increase your loan amount eligibility.

Additional Flexibility with Top-Up Loans

You can also opt for a top-up loan on your existing home loan, provided you have a good repayment history. Some banks may charge a processing fee for issuing top-up loans. What’s more, most banks offer balance transfer options for construction loans, allowing you to switch to a lower interest rate if you discover that your current rate is higher than the market rate. With this option, you’ll need to pay a fee of up to 1% of the outstanding balance.