Introduction: Why Home Loans for Under-Construction Properties Matter
Buying a home is a milestone in life, but in cities like Kolhapur and across India, most buyers prefer under-construction properties due to affordability, modern amenities, and flexible payment options. However, financing an under-construction property comes with specific rules, loan structures, and repayment methods.
Whether you’re exploring housing loan for under-construction property, calculating home loan EMI for under construction property, or trying to understand tax benefits on home loan for under-construction property, this guide covers it all.
For buyers considering projects from reputed developers like Deshpande Infra, understanding these nuances can help in making a safe and smart investment.
Home Loan Process for Under Construction Flat
The home loan process for under-construction flat is slightly different from ready-to-move-in homes. Here’s how it works:
- Loan Application – Submit your income proof, KYC, and property documents.
- Loan Sanction – The bank evaluates your eligibility.
- Home Loan Disbursement for Under Construction Property – Instead of releasing the entire loan amount at once, the bank disburses payments in stages as per the builder’s construction milestones.
- Repayment Begins – You may start with pre-EMI (interest only) payments until possession.
When to Take Home Loan for Under-Construction Property
The ideal time to apply for a home loan for under construction flat is:
- Once the project receives RERA approval.
- When the builder, like Deshpande Infra, has strong credibility and clear documentation.
- At the initial stages, so you can benefit from staggered payments linked to construction progress.
This ensures your investment is secure and you don’t face legal or financial risks later.
Documents Required for Home Loan for Under Construction Property
Banks require the following for processing:
- Personal Documents: PAN, Aadhaar, passport-sized photographs.
- Income Proof: Salary slips, Form 16, ITR for last 3 years (for self-employed).
- Property Documents: Allotment letter, builder-buyer agreement, approved building plan, and builder’s RERA registration.
With reputed developers like Deshpande Infra, the documentation process is smoother because all legal clearances are already in place.
Home Loan Eligibility for Under Construction Property
Eligibility is based on:
- Income and employment stability.
- Credit score (ideally 700+).
- Property value and builder’s credibility.
- Existing financial liabilities.
Banks may offer best home loan for under construction property when the builder has a strong track record, making it easier for buyers to secure approval.
Home Loan Repayment for Under Construction Property
Repayment typically happens in two ways:
- Pre-EMI: You pay only interest on the disbursed loan amount until possession.
- Full EMI: You start paying both principal + interest right after loan disbursement.
Choosing between pre-EMI and full EMI depends on your financial capacity. Many homebuyers prefer pre-EMI until the construction is completed.
Home Loan EMI for Under Construction Property
The home loan EMI for under construction property depends on:
- Loan amount sanctioned.
- Disbursement schedule linked to construction stages.
- Interest rate offered by the bank.
Tip: Use an online EMI calculator to plan your budget before committing.
Tax Benefit on Home Loan for Under-Construction Property
Tax benefits are available, but slightly different:
- You can claim deductions under Section 24(b) on interest paid, but only after possession.
- Deductions under Section 80C (principal repayment) also apply post-possession.
- Pre-construction interest can be claimed in 5 equal installments after possession.
This makes investing in home loan for under construction building financially viable in the long run.
Home Loan Insurance for Under Construction Property
Taking home loan insurance for under construction property is highly recommended. It protects your family from repayment liability in case of unforeseen events like death, disability, or job loss.
Integration with Property Laws
Understanding the loan process also ties into India’s evolving property regulations:
New Property Law in India
The Real Estate (Regulation and Development) Act (RERA) ensures buyer protection in under-construction projects.
List of Property Laws in India
- RERA Act, 2016
- Transfer of Property Act, 1882
- Registration Act, 1908
- Indian Contract Act, 1872
New Property Law 2025
Expected changes include stricter digital documentation, faster dispute resolution, and transparent builder-buyer agreements.
New Property Rules in India 2025
Buyers can expect enhanced legal protection, mandatory eco-friendly housing guidelines, and improved loan disbursement rules.
Conclusion: Making a Safe Investment
Buying an under-construction home is a smart move if done with due diligence. By understanding home loan for under construction flat, planning repayments, and leveraging tax benefits, you can make your investment secure and rewarding.
With reputed developers like Deshpande Infra, buyers get peace of mind with transparent processes, RERA compliance, and on-time delivery.
FAQs
Q1: Can I get a housing loan for under-construction property?
Yes, most banks provide loans for under-construction properties with disbursements linked to construction progress.
Q2: What is the repayment method for home loan on under-construction flat?
You can choose between pre-EMI (interest only) or full EMI (principal + interest).
Q3: What documents are required for a home loan for under-construction property?
Basic KYC, income proof, and property-related documents like allotment letter and builder’s RERA registration.
Q4: Do I get tax benefits on home loan for under-construction property?
Yes, but tax deductions can be claimed only after possession, with pre-construction interest spread over 5 years.
Q5: When should I take a home loan for under-construction property?
It’s best to apply after project approval and once the builder has all legal clearances.
