Construction loan is taken to construct a house on a self-owned or a financed plot. In this case, the plot on which the house is being constructed is mortgaged as a security against the loan. The general terms governing this loan are:

• - The Loan provided is on the basis of the approved architects construction estimate submitted by the customer, usually the loan is restricted to 85% of the construction cost.
• - The disbursement of the loan is in stages and customer pays pre-emi interest during the construction period. The disbursement of the loan is based on the basis of progress of the work at site as visited and vetted by the technical / valuation team of the lending institution.