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Tata Capital > Blog > Loan for Home > Eligibility Factors for Home Construction Loan

Loan for Home

Eligibility Factors for Home Construction Loan

Eligibility Factors for Home Construction Loan

There's nothing more enthralling for an aspiring homeowner than watching their house getting constructed; every brick and every stone turning into their dream home.

However, the exciting journey also entails a momentous amount of time, money, and coordination. Breathing some relief into such a project are home construction loans. The loans are customised specifically for financing expenses associated with the arduous process.

What is home construction finance?

While some opt for purchasing a fully-constructed ready-made house, others invest in constructing a home in ways they deem fit. Nowadays, you can get home construction financing to bear the expense incurred in building a new house. Unlike home loans, these carry a shorter tenure, and the amount is disbursed in various instalments depending on your construction work's progress.

The significant difference between typical home loan and a house construction loan is the incremental disbursal of money. This unique feature allows you to request loan disbursal whenever the construction stage requires funds.

This way, borrowers don't have to undergo the hassle of managing large amounts, and they get to focus on their dream house project. Besides, you only pay interest on the used funds instead of the entire pre-sanctioned amount.

Additional Read: Home Loan vs. Home Construction Loan

What are the eligibility criteria for availing a house construction loan?

Much like home finance, you must fulfil necessary home construction loan eligibility conditions set by various financial institutions.

Before sanctioning a construction loan, lenders usually ask for a detailed home construction plan, including the prospective materials to be utilised during the building process. 

Other eligibility criteria include parameters like a good credit score, proof of annual/monthly income, work experience, job stability, etc. Furthermore, some lenders also expect that if the property in use is co-owned, then the co-owner must be a loan co-applicant. Here's a guide to understanding the eligibility criteria in detail.


Both salaried and self-employed professionals are typically eligible for availing a loan. Salaried individuals may require a work experience of two years, and self-employed should have experience of three years.

Age limit:

Like home loan eligibility, people falling in the age between 24 and 65 are typically eligible to avail home construction finance from lenders.

Credit Score:

A healthy credit score is pivotal to your loan application. Customers who have a credit score of 750 or more can easily avail a home building loan, provided other criteria are also matched.

Apart from these, you will also need to furnish documentation from your end as proof of income, identity, and residence. Moreover, borrowers must furnish land ownership documents, NOC from concerned authorities, estimated construction cost quotation, construction plan, and approved blueprints. Besides, to determine house construction loan interest rates, your lender may ask for more documents.

Additional Read: Home Construction Loan: Everything You Must Know


Nobody said building a house was easy, but who says financing it should not be? Whether a sleek contemporary design is on your mind or a Victorian outline, let Tata Capital back your construction with an easy house building loan.

Experience hassle-free processing and quick disbursal of funds with us today!

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