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Opting for a home loan for an under-construction property provides financial flexibility, with funds disbursed as construction progresses. Such properties are generally more affordable than completed ones, which makes loan repayment more manageable. The disbursement process unfolds in stages, aligning with construction milestones. Delve into the specifics of the home loan process for under-construction projects to make informed financial decisions. 

Interest Rates of Home Loans for Under-construction Properties

Here is the list of interest rates offered by various lenders: 

Lender

Minimum Home Loan Interest Rates (p.a.)

Bajaj Housing Finance Limited

8.50%

PNB Housing Finance Limited

8.50%

Union Bank of India

8.50%

LIC Housing Finance

8.65%

ICICI Bank

9.00%

Kotak Mahindra Bank

9.00%

Home First Finance Company

9.50%

India Shelter

10.50%

Shubham Housing Finance

10.90%

Shriram Housing Finance

11.50%

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

Features & Benefits of Home Loans for Under-construction Properties

Explore the features and benefits of home loans for properties under construction as given below:

Affordable EMIs

As the construction proceeds in stages, the loan is disbursed gradually, and the interest is charged only on the utilised amount.

Flexible Repayment Tenures

Benefit from customisable repayment periods which can extend up to 30 years depending on the lender’s terms, the borrower's age, etc.

Competitive Interest Rates

You can get attractive interest rates for under-construction properties, which can be more affordable if your credit score is high. 

Tax Benefits

Enjoy tax benefits of up to ₹2 Lakhs on the interest paid and up to ₹1.5 Lakhs on the principal component of the home loan, after receiving the Occupancy Certificate. 

Eligibility Criteria for Home Loans for Under-construction Property

The following are the general requirements that a customer needs to fulfil to qualify for a home loan for under-construction projects from various lenders:

Parameter

Details

Nationality

Resident or non-resident Indian

Age

For salaried individuals: 23-62 years

For self-employed individuals: 25-70 years

Work Experience

For salaried individuals: Minimum 3 years

For self-employed individuals: Minimum 5 years

Income

For salaried individuals: Minimum ₹1.2 Lakhs per annum

For self-employed individuals: Minimum ₹2 Lakhs per annum

Other Conditions

A good credit score above 750, without any defaults in the history of loans and statutory payments 

*Different lenders may have varying terms, check with your chosen financial institution before applying

Documents Required for Home Loans for Under-construction Properties

Here are some of the important documents that you may require when applying for a home loan for properties under construction: 

Document

Details

Identity Proof

  • Aadhaar Card

  • PAN Card

  • Voter ID Card

  • Passport

  • Driving Licence

Address Proof

  • Aadhaar Card

  • Voter ID Card

  • Passport

  • Ration Card

  • Bank Passbook

  • Utility bills (telephone, electricity, etc.) 

Income Proof

For Salaried Applicants: 

  • Form 16

  • Payslips for last 2 months

  • Certified letter from the employer

  • IT returns for past 3 years

  • Appraisal/Promotion letter

  • Investment proofs (FDs, shares, etc.)

For Self-Employed Applicants:

  • Income Tax Returns (ITR) for the last 3 years 

  • Proof of business address

  • Details of Business Licence 

  • CA-attested Profit & Loss Statement and Balance Sheet 

  • Registration Certificate of Establishment (if applicable)

  • Licence of Professional Practice (for consultants, doctors, etc.) 

Property Proof

  • Allotment/Possession letter

  • A copy of draft sale deed and chain title documents

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

  • All documents according to the legal report

Disclaimer

The information and suggestions provided by BFDL hereinabove is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial advice or endorsement of any sort. 

The information including interest rates or fees, loan amount and other charges with regard to any product, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks or NBFCs. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any application or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products.

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FAQs

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 explore different lenders on Bajaj Markets and select a home loan of your choice. 

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

You can claim tax benefits of up to ₹2 Lakhs on the interest paid and up to ₹1.5 Lakhs on the principal component of the home loan. 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 is disbursed in instalments. This is because the amount is released according to the requirements of the stage of construction and the interest will be charged only on this amount. 

How is EMI calculated for under-construction property?

You have to pay home loan EMIs 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 the 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. 

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