123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

3 Important Facts Which You Should Know About Under Construction Property Loans!

Profile Picture
By Author: Finway
Total Articles: 155
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

Are you looking to purchase a loan for under construction property? In this scenario, there are thousands of property projects to choose from. In every part of the area, several reputable builders are working on residential and commercial properties. However, before purchasing such a house, you should review the following home loan facts for under-construction properties.

EMI on the loan sum that has been approved

If you take out a construction property that is still being built, your EMI would be based on the approved loan amount rather than the disbursed loan amount charged to the builder. Let us use an example to provide you with more details. Assume a bank has approved a loan of Rs 35 lac, and the bank has disbursed Rs 10 lac to the builder because the property is still under construction. In this scenario, you will be required to pay an EMI for the entire loan sum, i.e. Rs 35 lac, which is Rs 33,776 at a 10% annual interest rate.

Borrowers, on the other hand, often invest in a building project to defer loan repayment. This high ...
... EMI outlay in the first month can be a financial burden, particularly if the borrower is also paying monthly rent on top of the home loan EMI. A ready-to-move-in house would have been a safer choice for the borrower.

Benefits from Taxes

You will get decent tax incentives if you take out a loan on a property that is still under construction. Section 80 C will assist you in obtaining an additional sum for savings. With the small business start-up loans on an under-construction house, you can avoid paying stamp duty and registration fees.

According to Vaibhav Sankla, director, H&R Block India, "interest for the pre-construction time can be deducted in five equal instalments from the year the construction is completed."
The tax advantage is available when you file your income tax returns. The sum charged for stamp duty and the registration process is tax-deductible under Section 80C. "However, when the property is under renovation, the tax refund on principal repayment may not be allowed,” he adds. If the ownership of the property is postponed, the tax benefits are also delayed to the same degree.

Increased Liability

Borrowing money from a bank for a project that is still under construction will backfire if the project is delayed or defaults. In this case, the loan will only be settled when the borrower repays the bank the disbursed sum plus interest. You must do one thing to prevent certain situations when taking out a loan. Before taking out a home loan, look at a builder's track record and credibility. In such challenging circumstances, a reputable builder would never drive.


Given the rise in real estate activity and the incorporation of newer and more appealing amenities into homes, as a property buyer, you may choose to invest in an under-construction property rather than a pre-existing small business start up loans. Such properties are generally less expensive, with prices at least 20% lower than comparable properties in the region.

Total Views: 152Word Count: 501See All articles From Author

Add Comment

Investing / Finance Articles

1. How Do 12 Month Loans Direct Lenders Work?
Author: Sarah Glenn

2. Text Loans Direct Lenders Only: A Quick Money-making Method
Author: Sarah Glenn

3. Don't Just Stand Still! Payday Loans For Uk Disability Benefits: Where To Begin?
Author: James Robinson

4. Loans Offered By The Texas Government For Low Credit Scores
Author: Ricky Johnson

5. Get Easy Approval Online Loan At Depfin Finance In South Africa
Author: Depfin Finance

6. Factors Affecting Home Loan Eligibility
Author: Mohit Bansal

7. Blend – International Financial Solutions Company
Author: Blend Finance

8. How Direct Deposit Loans Payout You Fast Cash Same Day?
Author: Amy Jones

9. Short Term Loans For Bad Credit Uk: Make Sapless Financial Health Oaky
Author: Helen Clark

10. Financial Planning Tips High Net Worth Individuals Should Follow
Author: Avendus Group

11. Here Is How To Increase The Chances Of Ipo Allotment
Author: harish

12. Your Wise Choice Of Short Term Loans Uk Direct Lenders Frees You From Overall Burdens
Author: Jack Ryder is a financial adviser of payday lendz

13. Why Does Quality Trading Matter Over Quantity Trading In Forex
Author: Roff benjaminn

14. The Pros Of Using A Car Insurance Calculator
Author: shivani prasad

15. 4 Tactics To Lowering Interest Rate
Author: Lorenzo Rodriguez

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: