Eligibility Factors for Home Construction Loan

A construction loan is a medium to long-term loan used to cover the cost of a construction project. The unique feature of this loan is the incremental disbursal of money which provides the builder with the flexibility to spend over time.While construction loans tend to have a higher interest rate, you only have to pay interest on the money used in the project rather than paying interest on the pre-sanctioned amount. This helps in reducing the overall burden of the interest on the loan.Some of the salient features of the loan are;

• Tenure up to 20 years.
• No pre-payment charges for floating rate loans.
• Quick processing of loans.

Now, let's look at how to secure a construction loan?

The criteria might differ based on the lender you choose. Mentioned below are some of the common home construction loan eligibility criteria for both salaried and self-employed individuals.

• The applicant should be above 21 years of age. The maximum age limit at the time of maturity of the loan should be 60 years for salaried and up to 70 years for the self-employed.
• Must be a Resident Indian or Non-Resident Indian.
• Must be employed at the current workplace for at least 1 year or more.
• Must have a permanent residence or a rented residence where the applicant has been living for more than one year.
• A good credit score from a recognised credit bureau.

To secure your loans without any hassle, here is the list of documents you should be ready with-

• A Proof of Identity such as a Pan card, valid driving license.
• Proof of residence such as voter ID, Aadhar card.
• Proof of income like income tax returns and latest form 16.
• Documents related to the property such as encumbrance certificate, title deeds of the plot, photocopy of the plan sanctioned by local authorities.
• Other documents that you should keep handy include Bank account statements, CIBIL report, Duly filled loan application form affixed with passport size photographs of all the applicants/co-applicants.

Let us look at the benefits of a construction loan .

• Flexible rate of interests
• You can also receive t ax benefits on your home loan .
• Easy to secure
• Availability of top-up on your pre-sanctioned loan.

A home construction loan can help you fulfil the dream of building your dream home. Choose a reliable lender that offers attractive interest rates and quick and transparent processing.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.