It is no news that real estate prices are high and for a middle-class individual it has become imperative to take home loan to fund the purchase. Since it is a huge financial commitment, you need to make a wise decision about the property you are buying as well as the home loan. With a number of projects coming up at a rapid pace, under-construction homes are rising as a preferred choice among mid-segment buyers. These are priced lower than the ready-to-move homes so you can get the combined benefit of a good location as well as better home at a reasonable rate.
Home loans for under-construction projects are offered by all popular banks and financial institutions.
Let’s talk about a few such home loans-
ICICI Bank Home Loan
ICICI Bank Home Loan is one such product that helps people own the home of their dreams at attractive interest rates along with easy terms and conditions. ICICI Bank is one of the first tech-savvy banks of the country. One can also apply through their smart phone application and ensure faster approval. They also claim to provide higher eligibility and smart EMI options. One’s eligibility is judged on the basis of various parameters like current age, retirement age, monthly income, existing EMIs, etc. ICICI Bank Home Loan EMIs can also be calculated with the EMI calculator available on their official website. ICICI Bank offers a competitive interest rate along with a maximum tenure of 30 years which will make repayment smoother for the borrowers.
SBI Home Loan
SBI is one of the most preferred home loan lenders of the country. The bank offers home loans for under-construction property, ready-to-move homes and resale homes as well as for construction of a home. The loan amount is decided on the basis of the applicant’s credit history and repayment capacity which is judged by his income, expenses, age, job stability, existing EMIs and a few other things. For properties priced up to Rs 30 Lakhs, 90% of the value can be given as a loan; for properties ranging between 30 Lakhs and 75 Lakhs, the ratio is 80% and for those exceeding Rs 75 Lakhs, the loan percentage is 75%.
Given below are a few benefits of SBI Home Loan-
· No additional or hidden charges
· Complete package of exclusive benefits
· Interest rates charged on a daily reducing balance
· No prepayment penalties
· Low processing fees
HDFC Home Loan
Originally a housing finance company, HDFC is also counted among the best home loan lenders. It offers attractive interest rates on home loan that can be taken for the purchase of under-construction property, resale property or for constructing a home on the plot. HDFC also offers loans for extension or renovation of a house. The terms and conditions of HDFC Home Loans are very simple after one meets the eligibility criteria. Both fixed and floating rates of interests are provided on these home loans. Being a smart bank with updated technology, the home loan approval process with HDFC is quick and easy.
Comparative Interest Rates
The table given below shows the home loan interest rates offered by these three lenders to salaried individuals. Take a look-
Up to Rs 30 Lakhs
|
30 Lakhs to 75 Lakhs
|
Above 75 Lakhs
|
|
ICICI
|
8.40%
|
8.65%
|
8.70% to 8.80%
|
HDFC
|
8.40% to 8.90%
|
8.50% to 9.00%
|
8.55% to 9.05%
|
SBI
|
8.40%
|
8.55%
|
8.70%
|
Tax Benefits on Home Loans for Under-construction Property
Apart from being cost-effective, investing in under-construction properties through home loans can also give you certain income tax benefits. Under Section 24B, an individual can claim a deduction of Rs 2 Lakhs towards the interest paid on home loan for a self-occupied property. However, if the property is not self-occupied or rented out, there is no maximum limit and the whole interest amount can be claimed for deduction. From financial year 2016-17, more tax benefits are allowed to first-time homebuyers towards interest paid on home loan under section 80EE; the deduction allowed is Rs 50,000 over and above the 2 Lakh limit.
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