All About Home Construction Loan: Interest Rates, Eligibility & Documents

Whether you prefer buying a pre-constructed house or build a home from the ground up, you are inevitably in for a high cost. A home construction loan is an option that can help many ascertain a life long dream.


Residential home construction is a large endeavour to manage and more than the construction process itself it is a large amount of documentation that can sometimes be overwhelming.


But don’t give up yet! You know what they say – “Where there is a will, there is a way!” And the way in our case is Home Construction Loans. These loans enable you to commence your dream home construction even if you don’t have save-up capital.


Now, it’s time to get to the important stuff – Eligibility, Interest Rates, Documents Required, and ‘How to Apply for it’.



For Salaried Professionals:

  • Age: must be a minimum age of 23 and should not exceed 60.
  • Income: Must have a minimum monthly income of Rs.25,000 in metro cities and Rs.20,000 in other cities.
  • Loan Amount: can avail a minimum of Rs.80,000 to a maximum of  90% of Home Value based on their eligibility.
  • City: Is eligible in 180 cities across India.
  • Co-Applicant: Not mandatory, but only immediate family members can be a co-applicant.
  • Employment: Must have at least 2 years of work experience and should have 6 months of experience in the present company.
  • CIBIL: Should have a CIBIL score between 650 to 749+

For Self Employed Professionals:

  • Income: Must have minimum monthly income of Rs.25000 (in some banks 10,000) per month and above.
  • Loan Amount: Can avail a minimum of Rs.1,00,000 to a maximum of  Rs.35,00,00,000 based on their eligibility.
  • City: Is eligible in 180 cities across India.
  • Co-Applicant: Not mandatory, but only immediate family members can be a co-applicant.
  • Employment: Should have at least 5 years of turnover before they can apply for the loan.
  • CIBIL: Should have a CIBIL score between 650 to 900

Well, that’s the eligibility criteria to apply for a home construction loan.


Interest Rates

Wondering how much interest you need to pay for a home construction loan? Well, it actually varies from bank to bank, but it generally falls between 8% to 19%. Allow us to shed some more light home construction loan interest rates*.

Axis Bank – 7.75% to 8.55%

Bajaj Finserv – 9.05% to 10.30%

Citibank – 7.50% to 8.25%

DHFL – 9.5% onwards

HDFC Bank – 6.95% to 8.20%

ICICI Bank – 6.95% to 8.05%

IDFC Bank – 7.oo%

Indiabulls – 8.99%

IndusInd Bank – 8.00%  to 16.00%

Kotak Mahindra Bank – 7.40% to 9.70%

LIC Housing – 6.90% onwards

PNB Housing Finance Ltd. – 8.85% to 9.95%

Punjab National Bank – 7.00% to 7.60%

Standard Chartered Bank – 8.86% to 9.19%

State Bank of India – 6.95% to 7.50%

Tata Capital – 8.50%

Reliance Home Finance Ltd. – 9.75% to 13.00%

Vastu Housing Finance Corporation Ltd. – 12.5% to 16.5%

*rates are subject to change.

For more information, you can contact the financial institution and ask for details.


Documents Required

Here is a checklist of the documents you need to present while taking a loan:

  • Passport Size Photographs
  • Identity Proof: Passport / Driving License / Voter ID / PAN Card / Aadhaar Card.
  • Address Proof: Driving License / Registered Rent Agreement / Electricity Bill (up to 3 months old) / Passport.
  • Employment Appointment Letter: Mandatory if the current employment experience is less than 1-year.
  • Financial Documents Required:
    – Last 3 months salary slips.
    – 6 months bank statement.

– 2 years Form 16.

  • Property Documents: Sale deed, Khata, transfer of ownership.
  • Advance Processing Cheque: A cancelled cheque for validation of bank account.
  • Financial Documents Required:
    – For Salaried Individual: 3 month salary slips, Form 16 and bank statement
    – For Self-Employed Individual: IT returns for the last 2 years along with computation of

income tax for past 2 years certified by a Chartered accountant

  • Complete Home Loan Application form duly filled.


How to Apply


This is the easiest part! All you have to do is maintain a folder with all the documents ready and then fill the form in the financial institution(offline/online) and you’re all set. It would take about 4-6 weeks to get the approval of your home construction loan based on your eligibility, credit score, and state you reside in for your home construction loan.

*Courtesy:, Bajaj Finserve, Vastu HFC individual websites.

Now that your documents are ready, you can look forward to building your dream house. Housejoy offers low budget home construction services at an attractive price with top-notch quality. We have the best architects and engineers on board with us


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