Home Construction Loans

Home Construction Loans

A Home construction loan is the loan amount which lends to the person who wants to construct a building over a plot. The advantage of opting for a construction loan is that the lender needs not to withdraw all the money a tone. Rather, he/she can get the money in parts as per the phases of the construction. Also, the person needs not to return the full amount, but only the amount which has been used in the construction.

Types of Construction Loans

Majorly, there are two types of construction loans which one can opt for:

Stand-alone construction

It comprises of two separate loans. The first part of the loan is lent to the person when the construction is carrying out. Next, the loan is paid to the person to clear out the debt for the construction.

Construction-to-permanent Loan

It can also be known as a two-in-one loan where while the lender uses the loan for the construction of the house, later when he/she shifts to another house, the loan balance is converted into mortgage balance.


One needs to adhere to certain compliance and criteria to be eligible for the construction loan such as:

For working individuals

  • The age of the person must be between 23-65 years.
  • The person must be a permanent resident of India.
  • The person must be earning and must possess a minimum experience of 3 years.
  • The minimum loan amount he/she can apply for is Rs.10 Lakh, with a maximum loan amount as Rs.3.5crores.

For Entrepreneurs/self-employed applicants

  • The age of the person must be in between 25-70 years.
  • The person must be a permanent resident of India
  • The person must have experience of minimum of 5 years within the industry.


Some of the documents which are required to get eligible for a construction loan are:

  • Form 16
  • Document proof for KYC such as Adhaar, PAN card, identity proof, Passport, etc.
  • Document proof for the running business or self-employment with an experience of minimum of 5 years
  • 6 months prior bank statement proof