Have you been planning to build your dream home for years? Constructing a home requires a significant amount of capital. Not everyone has such cash handy. Even if some people do, it might not be a wise option to use it all at once since no one can predict the future and might need the funds to deal with any future financial emergencies.
So how to deal with situations like this? Do not worry since home construction loans can be a fruitful solution to your problem. Demand for home loans has been seeing an increasing curve in recent years. The housing loan market in India was almost Rs 22 lakh crore in FY 9. This is a clear implication of the effectiveness and reliability of home construction loans.
Detailed insight on home construction loans
A home construction loan is a special category of home loan, meant for individuals who require financial assistance in the construction of their homes in unoccupied land. The distinctive feature of a home construction loan that sets it apart from other categories of home loans is the disbursement of home construction loans in installments. The borrower has the liberty to request the disbursal amount after completion of each stage of construction according to the monetary requirements. In this way, the individual only has to pay an interest amount on the actual amount of fund disbursed and not on the overall principal amount of the home construction loan. Let us look at some of the interesting and beneficial features of home construction loans.
Benefits of getting a home construction loan
Home construction loans offer multiple lucrative features for the borrower’s convenience. It is recommended that the applicants first check their eligibility of getting a home construction loan using a home loan eligibility calculator before applying for one to make sure their application does not get rejected in the middle of the verification process.
Faster approval
Home construction loans involve simple paperwork. The verification process is quite smooth and fast, leading to quick approval of loans. Hence, you can work on your dream project right away without having to wait much for approval. The home construction loan is usually disbursed within 72 hours of handing the home construction loan application.
Option to refinance
If a borrower finds a lender or financial institution offering a superior rate of interest on the home construction loan in the middle of the tenure, the individual can easily opt for the refinancing of the home construction loan to enjoy lower interest rates. The borrower can then have an option to either lower the equated monthly installment on loan or go for a reduction in the net loan tenure to save some bucks on interest payments.
Ease of repayment
The borrower has the liberty to set the home construction loan tenure and hence set the equated monthly installment value. Borrowers can use an online EMI calculator to calculate the exact value of EMI to have a better estimation of finances in advance to ensure that the repayment procedure does not overburden them.
Higher approved loan amount
Depending on the lender or financial institution and the financial background of the applicant, a prospective borrower can apply for a significant amount as a home construction loan. This allows the applicant to take care of the expenses of the overall home construction project effectively.