Finance

Know How to Avail Plot and Home Constructions Loan with Ease

The real estate industry in India is one of the fastest-growing sectors that witnessed a 22% growth across its metropolitan cities in 2018. It is expected that it will contribute approximately 13% of the country’s GDP by the end of 2025.

There has been a constant rise in demand for affordable homes in India for the previous few years. Schemes to offer interest subsidy from the Government and the easy availability of home loans from various financial institutions have provided impetus to this growth.

Here are some tips that can help a borrower to avail home construction loans with ease. 

Choose the Right Loan

The first step to avail a loan to purchase a plot or constructing a property is to select the ideal credit option. The terms and conditions may vary according to different financial institutions. Borrowers should choose a lender who offers the best home loan terms suitable for them.

They should look for a financial institution that has low processing charges and minimum part prepayment and foreclosure charges. Also, they should look for a balance transfer facility while availing such a loan.

Check Eligibility Criteria for Home Construction Loans

Borrowers must fulfill the required eligibility criteria to avail house construction loans. It can vary for different financial institutions, but the essential requirement remains the same. Checking the required criteria is a crucial step you must follow to easily get a home loan in India

For salaried individuals-

  • The age of the borrower should be between 23 and 62 years.
  • The borrower should have work experience of 3 years or above.

For self-employed individuals-

  • The age of the borrower should be between 25 and 70 years.
  • The borrower should have work experience of 3 years or above.

Along with that, borrowers should have a minimum CIBIL score of 750. Also, the minimum value of the mortgaged property should be Rs. 15 lakhs to avail such credits.

Borrowers can use any online home loan eligibility calculator to know if they are eligible or not.

Choose the Ideal Amount

Financial institutions may offer a loan amount up to 60%-75% of the property mortgaged. A high loan amount increases the amount of EMIs and that in turn can increase the financial burden. 

You can use any online EMI calculator to calculate the monthly installment amount and decide the loan amount accordingly.

Opt for the Right Tenure

tenures for a loan for plot or home construction are comparatively higher compared to other forms of credit. Longer tenures may reduce the immediate EMI amount, but it increases the overall cost of a loan.

They also bring you pre-approved offers on such loans to make the process to avail them hassle-free and straightforward. Pre-approved offers are valid on secured credits like home loans and even on unsecured credits like business loans and personal loans along with a wide range of other financial products. Provide some essential details and check your pre-approved offer.

Submit the Application Along with the Required Documents

Borrowers can easily apply for home construction loans online. They need to duly fill-up the application form as it may get rejected if there is any discrepancy.

A borrower needs to submit the following documents along with the application form to avail such loans.

  • Income proof
  • Identity proof 
  • Employment details
  • Bank statements 
  • Documents of the mortgaged property.

You should be able to avail a loan for plot or home construction with the help of the points mentioned above. Make sure that you compare the construction loan interest rates and before availing such credits.

Additional Read: Don’t Forget These Things Before Applying For Home Construction Loan

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