Banks and financial institutions provide an option for borrowers to finance the construction of a residential property through a loan. The application process for this type of loan is often uncomplicated and requires limited documentation. To make the loan more accessible, interest rates are kept at a competitive level and various repayment options are available to accommodate the borrower’s financial situation.
SBI Regular Home Loan
SBI Regular Home Loan is a loan designed for individuals looking to build their dream home. One of the key benefits of this loan is the interest rate concession for women applicants. Additionally, there are zero charges on prepayment and extended loan repayment tenures. The annual interest rate for the loan begins at 6.95% and the repayment period can extend to a maximum of 30 years. The lowest EMI for this loan is Rs.662 per lakh. The processing fee for this loan is 0.35% of the loan amount with a minimum of Rs.2,000 and a maximum of Rs.10,000.
HDFC Home Construction Loan
HDFC Home Construction Loan is for individuals who are looking to construct a house on a residential plot or a Development Authority allotted plot. This loan comes with longer loan tenures and competitive interest rates. The interest rate for this loan begins at 7.35% per annum, and the duration of the loan can last up to 30 years. The lowest EMI for this loan is Rs.689 per lakh. For salaried individuals, the processing fee is up to 0.50% of the loan amount or Rs.3,000. For self-employed individuals, the processing fee is up to 1.50% of the loan amount or Rs.4,500.
DHFL Home Construction Loan
DHFL Home Construction Loan is designed for those looking to construct a house on an already owned plot or property. The interest rate for this loan begins at 9.50% per annum and it can be repaid over a period of up to 30 years.The lowest EMI for this loan is Rs.841 per lakh. The processing fee for this loan is up to Rs.20,000 plus document charges.
Canara Bank Home Construction Loan
Canara Bank Home Construction Loan is available for both salaried and self-employed borrowers, including individuals above the age of 60 years. The loan comes with zero prepayment housing loans floating rate charges. The annual interest rate for this loan begins at 6.90% and the repayment period can last up to 30 years.The lowest EMI for this loan is Rs.659 per lakh. The processing fee for this loan is up to 0.50% of the loan amount with a minimum of Rs.1,500 and a maximum of Rs.10,000.
PNB Home Construction Loan
PNB Home Construction Loan offers extended loan tenures for a comfortable repayment period and has simple documentation and quick processing. The loan also comes with a nominal processing fee. The interest rate starts at 9.25% p.a. and the loan tenure can go up to 15 years. The lowest EMI for this loan is Rs.823 per lakh. The processing fee for this loan is 2% of the loan amount.
Aditya Birla Housing Finance
Aditya Birla Housing Finance Plot & Home Construction Loan is for individuals looking to build their dream home. This loan can also be used to purchase a residential plot. The loan offers up to 70 years maximum age at loan maturity for self-employed individuals and up to 90% of property value as a loan. The interest rate for this loan begins at 9.05% per annum and the repayment period can last for up to 30 years.The lowest EMI for this loan is Rs.808 per lakh. The processing fee for this loan is up to 1% of the loan amount.
Bank of Baroda Home Construction Loan
The Bank of Baroda offers a home construction loan for individuals who are looking to construct their dream home or purchase a residential plot. One of the key benefits of this loan is the availability of top-up loans up to five times during the loan tenure. The loan amount provided can be up to 90% of the property value, making it a convenient option for those who do not have a large amount of savings. The interest rate for the loan begins at 6.85% per annum and the loan repayment period can last up to a maximum of 30 years. The lowest EMI for this loan is Rs. 655 per lakh and the processing fee can be up to 0.50% of the loan amount.
Federal Housing Loan
Federal Housing Loan is a loan option for individuals who are looking to purchase a property or construct a home. This loan provides a loan to value of up to 85% of the property cost and the loan amount can be up to Rs. 1500 lakh.The starting interest rate for this loan is 8.15% per annum and it has a loan tenure that can go up to 30 years. The lowest EMI for this loan is Rs. 744 per lakh and the processing fee can be up to 0.50% of the loan amount.
What is the eligibility criteria for a salaried individual to apply for a home construction loan?
- The eligibility criteria for the loan requires the applicant to be between the ages of 18 and 65 years.
- The individual applying can either be a resident of India or a non-resident Indian (NRI).
- The applicant must be a salaried individual who has been working with their current employer for at least one year.
- Additionally, the applicant must have either a permanent or a rented residence, where they have lived for at least one year before applying for the loan.
- The applicant must also have a good credit report with a score of at least 750 or more, obtained from a recognized credit bureau.
What is the eligibility criteria for a self employed individual to apply for a home construction loan?
- To be eligible for a home construction loan, the applicant must be between the ages of 18 and 65 years old.
- They must be either a Resident Indian or Non-Resident Indian. In terms of employment, the applicant must either be a Self-Employed Professional (SEP) or Self-Employed Non-Professional (SENP).
- They must also have either a permanent residence or have lived in a rented residence for at least 12 months prior to applying for the loan.
- It is important for the applicant to have a good credit score of at least 750 or more, as reported by a recognized credit bureau.
What are the Documents Required for a Salaried Home Construction Loan?
If you are a salaried individual looking to obtain a home construction loan, you will need to provide certain documents to the bank or financial institution. These documents serve as proof of your identity, residence, income, property, and other necessary information. Here is a list of the required documents:
- Proof of Identity: You will need to provide one of the following – Aadhaar Card, Valid Passport, Voter ID Card, Valid Driving License, or PAN Card.
- Proof of Residence: You will need to provide one of the following – Valid Passport, Voter ID Card, Aadhaar Card, Employer ID Card, or Utility Bills.
- Proof of Income: You will need to provide Income Tax Returns and latest Form 16, salary account statements for the last 6 months, salary slips or certificates for the last 3 months.
- Property Related Documents: You will need to provide an Encumbrance Certificate, Title Deeds of the Plot, an estimate for construction assessed by a Civil Engineer/Architect, and a photocopy of the plan sanctioned by Local Authorities.
- Other Documents: You may need to provide proof of your own contribution, appointment letter/employment contract if your current employment period is less than 12 months, bank account statements indicating repayments made towards other ongoing loans (if any), processing fee cheque in favor of the lending institution, and a fully filled loan application form affixed with passport-size photographs of all the applicants/co-applicants.
What Documents are Required for Self-Employed Home Construction Loan Application?
To apply for a loan, self-employed individuals are required to provide the following documents:
- Proof of identity: Voter ID card, valid driving licence, PAN card, valid passport, or Aadhaar card.
- Proof of residence: Aadhaar card, utility bills, valid passport, voter ID card, or employer ID card.
- Proof of income: income tax returns and computation of income (attested by a certified CA) for the last 3 assessment years, balance sheet and profit and loss account statements (attested by a certified CA) for the last 3 years, savings account statements for the last 6 months, and current account statements of the business entity for the last 6 months.
- Property related documents: title deeds of the plot, estimate for construction assessed by a civil engineer/architect, encumbrance certificate, and photocopy of the plan sanctioned by local authorities.
- Other documents: own contribution proof, latest Form 26 AS, business profile, memorandum and articles of association of the company, partnership deeds if the business entity is a partnership firm, list of shareholders and directors (certified by a CA) if the business entity is a company, bank account statements indicating ongoing loans if any, processing fee cheque in favour of the bank/financial institution, and a filled application form with passport size photographs of all applicants/co-applicants, signed across.