Composite Loan
A composite loan is a unique home loan product that allows you to purchase a plot of land and construct a house on it under a single loan. It is ideal for homebuyers who want to build their custom home instead of buying a ready property.
Key Features
- Loan Type: Plot + Home Construction
- Construction Timeline: 2 to 5 years
- Disbursement: Stage-wise (Land + Construction)
- Loan Tenure: Up to 30 years
- LTV Ratio: Up to 80% of total cost
- Tax Benefits: After completion of construction
- Interest Type: Fixed or Floating
Disbursement Process
Funds are released in two main stages:
- Initial disbursement for land purchase
- Subsequent disbursements as per construction stages (foundation, slab, roofing, finishing)
Eligibility Criteria
- Age: 21–65 years
- Income: Salaried, self-employed or professionals
- Good credit score (700+ preferred)
- Approved building plan & clear title deed
Required Documents
- ID & Address Proof (Aadhaar, PAN, Passport)
- Income Proof (Salary Slips/ITR)
- Bank Statements (last 6 months)
- Sale Deed for Plot
- Construction Plan Approval
- Construction Estimate by Architect/Engineer
Tax Benefits
Tax deductions are available only after construction is completed:
- Section 80C: Up to ₹1.5 lakh on principal
- Section 24(b): Up to ₹2 lakh on interest
Top Lenders Offering Composite Loans
Includes SBI, HDFC Ltd, LIC Housing, ICICI, Axis Bank, Bank of Baroda, and more.
Important Notes
- Construction must begin within 2 years (as per lender’s policy)
- Failure to start may convert the loan into a plot loan with higher rates
- Funds are disbursed based on construction progress reports