Builder Construction Loan

A home construction loan could benefit any borrower who wishes to build a house on his plot or an additional level on his property.

• Long tenure: The home building loan is accessible for long periods, ranging from 5 to 30 years, suggesting that the borrower’s EMI load is low and the loan is inexpensive.
• Tax advantages: Construction loans are tax-deductible on the principal and interest paid under Sections 80C and 24B. Sections provide for a tax credit of up to Rs. 2 lakhs on interest and Rs. 1.50 lakh on principal. Sec 80 EE allows first-time home buyers to receive an additional tax benefit of up to Rs. 50,000.
• Loan Amount: Your income and repayment eligibility influence the amount of the home construction loan sum you can obtain. Construction loans of up to 90% of the property’s value are available. To increase your loan amount eligibility, you must add a co-applicant.
• Loan refinancing: You can also obtain a top-up loan as a home building loan on your existing home loan. Banks examine your repayment history to determine whether you qualify for a construction loan to enhance your present loan. In some cases, banks may charge processing fees for issuing home loan top-ups.
• Balance transfer service: Just like home loans, most banks offer balance transfer options for construction loans. If a borrower discovers that his current loan interest rate is higher than the market rate – he can transfer the outstanding balance of his loans to another bank for a charge of up to 1%.