Loans for under-construction flats: the basics
Banks and housing finance companies lend against a property they can take as security. For an under-construction flat, the property does not yet fully exist, so lenders usually check the developer's approvals and project status before sanctioning. Prestige Huyilalu is in pre-launch and its RERA registration is awaited, so loan sanction for the project is unlikely to be possible until approvals are in place and the lender completes its own checks. Confirm the position with your bank.
The loan amount is limited by two things: the lender's assessment of your income and repayment capacity, and the loan-to-value ratio on the property.
What loan-to-value (LTV) means
LTV is the maximum share of the property's value that a lender will finance. The rest is your down payment, often called margin money. The permitted LTV depends on the property value and the lender's policy, with regulators setting upper limits that vary by loan size. Lenders commonly finance somewhere around 75 to 90 percent of value, but limits differ, so ask each lender for its current figure.
| Item | Hypothetical example |
|---|---|
| Property value | ₹1,00,00,000 |
| Assumed LTV | 80% |
| Maximum loan | ₹80,00,000 |
| Your down payment (margin) | ₹20,00,000 |
| Extras you pay separately (GST, stamp duty, registration, others) | Usually not financed in full; confirm with the lender |
Round numbers for illustration only. They are not Prestige Huyilalu prices, which will be confirmed at launch.
Remember that stamp duty, registration and other charges are usually on top of the base price. See stamp duty and registration and GST on apartments.
Construction-linked disbursement and pre-EMI
On an under-construction flat, the lender does not pay the full loan to the builder at once. It releases money in tranches linked to construction milestones, in line with the payment schedule in your agreement. This is why the payment plan matters. You can read how plans are typically structured on our payment plan page; the actual plan for Prestige Huyilalu is shared on request and confirmed at launch.
While only part of the loan has been released, you usually pay interest on the amount disbursed so far. This is often called pre-EMI or simple interest during construction. Full EMIs, covering principal and interest, begin once the loan is fully disbursed or at the lender's specified point. Some lenders let you opt for full EMI from the start, which reduces the total interest but raises your monthly outgo earlier.
If you are renting a home today and also paying pre-EMI on a flat that will not be ready until the target date of December 2030, your total monthly outflow is higher than the EMI alone. Budget for both.
A note on subvention schemes
Some developers market subvention or 'no EMI until possession' offers, where the developer pays the interest for a period. These can be useful but must be read carefully. Check who is legally liable for the loan, what happens if the developer stops paying, whether the cost is built into the price, and whether the offer is available for this project. Do not assume any such scheme exists for Prestige Huyilalu.
How to calculate EMI
The standard EMI formula is: EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly instalments.
Here is an example with hypothetical round numbers. Take a loan of ₹50,00,000 at an assumed annual interest rate of 9 percent for 20 years (240 months). The monthly rate is 0.75 percent. Applying the formula gives an EMI of roughly ₹45,000 per month. Over 240 months that adds up to about ₹1.08 crore paid, meaning roughly ₹58 lakh of it is interest.
| Term in the formula | Meaning | Value in the example |
|---|---|---|
| P | Loan amount | ₹50,00,000 |
| Annual rate | Assumed interest rate | 9% |
| r | Monthly rate = 9 ÷ 12 ÷ 100 | 0.0075 |
| n | Number of months | 240 (20 years) |
| EMI | Result, approximate | About ₹45,000 per month |
| Total repaid | EMI × 240, approximate | About ₹1.08 crore |
| Total interest | Total repaid − P, approximate | About ₹58 lakh |
Illustration only. The rate, loan size and tenure are assumed. Home loan rates are floating and change over time; ask your lender for a personalised schedule.
You can see how the tenure shifts the picture. A longer tenure lowers the monthly EMI but raises the total interest; a shorter tenure does the reverse. Use your lender's online calculator to test different combinations.
Documents lenders usually ask for
- Identity and address proof such as Aadhaar and PAN.
- Income proof: salary slips and Form 16 for salaried applicants, or ITRs and financial statements for self-employed applicants.
- Bank statements for the last six to twelve months.
- Employment or business continuity proof.
- Property documents: allotment letter or agreement for sale, approved plans, title documents and builder details.
- Project approvals, including the RERA registration, once issued.
- Passport-size photographs and the application form.
NRIs have additional documentation; see our NRI guide.
Tips before you apply
- Check your credit score and clear any overdue payments; a stronger score may help you secure a better rate.
- Compare at least three lenders on rate, processing fee, prepayment terms and the rate-reset rules for floating loans.
- Keep your total EMIs, including existing loans, within a share of income that you can sustain even if rates rise.
- Ask whether the lender has already approved the project, since this can speed sanction.
- Read the sanction letter and the agreement for sale together, so the disbursement stages match the payment plan.
For the broader financial question, see the investment guide, and check the price page for the starting figure of ₹75 Lakhs onwards*.
Finally, stress-test your plan. Recalculate your EMI at a rate two percentage points higher than today and check that you could still pay it alongside your other commitments. If the higher EMI is uncomfortable, borrow less or choose a longer tenure and prepay when you can. Prepayment rules differ, so ask whether charges apply to floating-rate loans for individual borrowers.
