Under Construction Home Loan

Home Loan for Under Construction Property

Check Home Loan for Flat Under Construction Interest Rate, Eligibility, & Documents Required

✓ Home Loan from ₹5 Lakhs To ₹5 Cr ✓ Multiple Lending Partners ✓ Attractive Interest Rates

Home loans have become a boon to the ones who wish for a home of their own. For ready-to-move-in houses, the majority of the lenders disburse funds as a single instalment. With a home loan for the under-construction property, you are not burdened with handling a huge loan amount at once. The funds are disbursed as and when the construction requires.

Properties under-construction are usually cheaper and are priced 20% less than normal. When you apply for an under-construction home loan, it becomes affordable due to this. The home loan disbursement process for under-construction property for the approved loan amount occurs in several instalments and is dependent on the construction progress. 

Let us check out the details of the process of  home loan for under-construction projects here.

Home Loan for Under Construction Properties Interest Rate

Here is the list of under-construction house loan interest rates offered by various lenders. 

Lender

Interest Rate for Under Construction Property Home Loan

Bajaj Finance Limited

Starts at 7.10% per annum

ICICI Bank

Starts at 7.60% per annum

PNB Housing Finance Limited

Starts at 6.99% per annum

Union Bank

Starts at 7.40% per annum

Axis Bank

Starts at 7.60% per annum

State Bank of India

Starts at 7.55% per annum

RBL Bank

Starts at 9.50% per annum

Citi Bank

Starts at 6.50% per annum

Yes Bank

Starts at 8.95% per annum

Disclaimer: The interest rates are subject to change as per lender’s discretion.

Home Loan for Under Construction Properties Features & Benefits

Check out the features and benefits of home loans for under-construction flats, apartments, etc. given below:

  • Affordable EMIs: EMIs of under-construction home loans are affordable since the home loan amount is disbursed in instalments. It is because the amount is released according to the requirements of the stage of construction and the interest will be charged only on the amount.

  • Only interest payments: You only have to pay the interest component of your home loan until you get possession of your house. It is termed the Prior Period Interest (PPI).

  • Flexible repayment tenures: The repayment tenures of the home loan for under-construction projects are flexible and vary from bank to bank. It can go up to 30 years and depends on the borrower’s age at the time of availing the loan.

  • Competitive interest rates: The housing loan interest rate for the under-construction property is attractive and starts from 6.50% per annum. It varies depending on the lender and will become more affordable if the credit score is high.

  • Tax Benefits: Up to Rs. 2 Lakhs and up to Rs. 1.5 Lakhs can be availed for the interest and the principal component of the home loan respectively as tax benefits on a home loan for a flat under-construction. It can be claimed only after the receipt of the Occupancy Certificate from the builder.

Best Home Loans for Properties Under Construction

Here is a list of home loans for under-construction properties and what it is best for.

Home Loans for Under Construction Properties

Best Suited For

Bajaj Finance Limited Home Loan

Lower interest rates 

PNB Housing Finance Home Loan

Home buyers in rural areas

ICICI Bank Home Loan

Longer Repayment

Union Bank of India

Approved projects

SBI Regular Home Loan

Special rates for women

Axis Bank Home Loan

Late Possession

Eligibility Criteria for Home Loan Under Construction Properties

The general criteria that need to be fulfilled by a customer to avail a home loan under-construction projects for various lenders are mentioned below.

Nationality

Resident Indian

Age

For salaried: 21 years to 60 years

For self-employed: 23 years to 70 years

Occupation

  • Salaried and self-employed professionals

  • Sole proprietors and partnership firms

  • Micro, small and medium enterprises

Work Experience

For salaried individuals not less than 3 years and for self-employed individuals not less than 4 years.

Income

Salaried individuals must earn a minimum of Rs. 1 Lakh per annum and self-employed individuals must earn a minimum Rs. 1.5 Lakhs per annum

Other Conditions

A good credit score without any defaults in the history of loans and statutory payments.

Documents Required for Home Loan Under Construction Properties

Here is the general list of documents required for a home loan for under-construction property.

Identity Proof

Driving Licence or PAN Card or Passport, or Voter ID

Address Proof

Telephone, water, gas and electricity bills or rental agreement

Income Proof

  • Salaried: Last 2 months salary slip last 6 months bank statement/ latest ITR/Form 16

  • Self-employed : Latest ITR/GST return/ last 6 months bank statements, etc

Property Proof

  • Allotment/Possession letter

  • A copy of draft sale deed and chain title documents

  • No objection certificate (NOC) from the society where property is located

  •  All documents according to the legal report

How to Apply for the Home Loan for Under Construction Properties

You can apply for a home loan for under-construction properties via Bajaj MARKETS. Follow the steps mentioned below to do so. 

  • Step 1: Fill in your personal details: Visit the Bajaj MARKETS website or app and enter your personal and professional details to check your housing loan eligibility for a home loan for under-construction properties.

  • Step 2: Select your lending partner: Select a lending partner of your choice.

  • Step 3: Check your borrowing power: Estimate the maximum amount of loan that you can avail from the lender via Bajaj MARKETS.

  • Step 4: Enter your requirement and the details of the property: Enter the loan amount and fill in the details of the property for which you are taking the loan.

  • Step 5: Check the final details: Find out the details of your loan, such as the charges and the net amount to be disbursed. After this, a loan expert will get in touch with you and help you process your application further.

FAQs For Home Loan Under Construction Properties

  • ✔️Can I get a home loan on an under-construction property?

    Yes, you can avail a home loan on an under-construction property. You can choose Bajaj MARKETS to avail a home loan of your choice from different lenders.

  • ✔️Can I claim home loan tax benefits on an under-construction property?

    Yes, up to Rs. 2 Lakhs and up to Rs. 1.5 Lakhs can be availed for the interest and the principal component of the home loan respectively as tax benefits on home loan for an under-construction property. It can be claimed only after the receipt of the Occupancy Certificate from the builder.

  • ✔️How is home loan disbursement on under-construction property?

    The home loan amount for under-construction properties are disbursed in instalments. It is because the amount is released according to the requirements of the stage of construction and the interest will be charged only on the amount.

  • ✔️How is EMI calculated for under-construction property?

    For a home loan for under-construction property, you have to pay the EMI from the start of construction of the property. The interest amount will be calculated based on the amount disbursed to the builder while the remaining amount will be counted towards principal.

  • ✔️Can I pay full EMI for under-construction property?

    Yes, you can pay full EMI for under-construction property. However, it is dependent on the lender to decide whether you should be given the option for full EMI payments instead of pre-EMI payments.

  • ✔️Can I claim 80EEA for under-construction property?

    If the individual taxpayer in India is fulfilling the conditions as mentioned in Section 80EEA of the Income Tax Act, that person is eligible to claim the tax benefits even in the pre-construction period.