Karnataka Bank Home Construction Loan

Planning to build your dream home or renovate your existing one? If yes, then you may need some financial assistance to fund your project. One of the options you can consider is a construction loan from Karnataka Bank.

A construction loan serves as a temporary financing solution designed to support the building or refurbishment of a residential property. Distinct from a conventional mortgage, funds from a construction loan are released in increments, aligned with the various phases of the project's completion. Consequently, borrowers are only required to pay interest on the sum of money actually drawn, rather than the total loan amount. Follow along to learn about the essential details about construction loans.

Karnataka Bank Home Construction Loan – Highlights

Karnataka Bank Construction Loan Interest Rates

The interest rates on a construction loan from Karnataka Bank are as follows:

*The base rate of the bank as on February 19, 2024 is 9.50% per annum. The interest rate is subject to change from time to time as per the bank’s discretion.

Karnataka Bank Construction Loan Fees and Charges

The fees and charges for a construction loan from Karnataka Bank are as follows:

*The fees and charges are subject to change from time to time as per the bank’s discretion.

Karnataka Bank Construction Loan Eligibility Criteria

The eligibility criteria for a construction loan from Karnataka Bank are as follows:

• The applicant should be an individual, company, partnership, or LLP engaged in civil contract activities.
• The applicant should have a minimum annual income of Rs. 1.20 lakh for purchase or construction and Rs. 0.60 lakh for renovation, remodelling, extension, or repair.
• The applicant should have a satisfactory credit history and repayment capacity.
• The applicant should have a clear title to the property to be constructed or renovated, or any other collateral security acceptable to the bank.

Karnataka Bank Construction Loan Documents Required

The documents required for a construction loan from Karnataka Bank are as follows:

• Application form with passport size photographs
• Identity proof 
• Address proof 
• Income proof 
• Property documents 
• Any other documents as required by the bank

Features of Karnataka Bank Construction Loans

Some of the features of a construction loan from Karnataka Bank are:

• It offers finance for the construction or purchase of a house or flat, or the renovation, remodelling, extension, or repair of an existing house or flat.
• It offers a flexible loan amount up to Rs. 5 crore for purchase or construction and up to Rs. 30 lakh for renovation, remodelling, extension, or repair.
• It offers a long loan tenure of up to 30 years for purchase or construction and up to 7 years for renovation, remodelling, extension, or repair.
• It offers a competitive interest rate linked to the bank’s base rate and is subject to change from time to time.
• It offers a convenient repayment option in monthly instalments through post-dated cheques, ECS, or standing instructions.
• It offers simple and quick processing and sanction of the loan.
• It offers a low margin of 20% for purchase or construction and 25% for renovation, remodelling, extension, or repair.