Construction commencement delay in Plot/Construction Home Loan



I have availed an AXIS Home Loan for Plot/Construction category by 2013. Due to personal financial reasons, I am unable to commence the construction as per the stipulated timelines[18 Months from Plot purchase]. I have received a notice from the bank seeking clarification on the commencement delay. I would like to know the following ones,

  1. Is there an provision to extend the timelines say for another 6 months to commence the construction?
  2. If bank does not accept the delay, what type of actions can be taken?
  3. In case of prepayment or foreclosure, will bank accept the prepayment or foreclosure before the commencement of construction.

Thanks in advance for your reply.



You haven’t mentioned whether you have taken a land loan or a land loan + construction loan. From the points you have mentioned, I guess that you have applied for a land loan + construction loan. If so, you might be paying Pre-EMI all these days.

There are provisions to extend the timeline for another 6 months. For the same you have to visit the branch and give a written request. You can also consult the operations in charge on how to proceed. But if you are paying pre-EMI we are not recommending this move. THis is because, you are paying just interest alone and it is not reducing your principal outstanding.

If you have money in hand now and is in a position to foreclose the loan, you can do it. But better not to break your savings for foreclosure, as you have other options as well.

Another option, which is the best recommended is to give a request to downsize the loan amount with the disbursed amount and start the EMI asap. But for doing it, you should check with the bank, if they are providing land loan alone and if your property matches to their criteria.

So check with your bank how they can help you out


Thanks for the update. I will check with the bank on the options. i am actually paying the EMI since installment breakup has some amount in principle and majority in interest section. Based on my conversation with bank, they are offering only plot +construction loan but i think the agent mis guided me stating it as plot loan. Anyhow its my mistake. I will check with bank on the options.

Thanks a lot for your response.



Hello Maruthi,

Even i got the same notice today from the Axis Bank. I had also purchased the plot in 2013 and the entire loan amount availed was for plot. I have been paying EMI’s(both principal and Interest) for the entire loan amount. I am not in a position to construct the house right now, may be next year.

Did you check with Axis Bank? What are the options for postponing the house construction? Please help.


Please anyone help me with the answer to my above question. Thanks in advance.


Hello John,

The above answer ( given for Maruti) an be applied in your case also. Since you are paying the EMI, there is no problem. You can consult the bank and request for loan downsizing with the current balance. In future, when you start construction, you can apply for a separate loan for construction



Sorry i just replied earlier thinking it will be posted automatically.

You have option to extend your home construction date by another x months by visiting your nearest Axis bank loan center. You need to provide a letter seeking for the extension. Hope this helps.



Hi Maruthi,

Most banks will ask you to start construction on the plot within 18 months of loan disbursal. If they find that construction has not commenced, they will convert the loan to a land loan and relevant interest rate will apply. We suggest that you check the terms and conditions of your composite loan. If the terms and conditions allow for an extension, you can go ahead and extend the date of your construction. You must check with your bank if you can’t find the relevant details. There might also be terms and conditions as regards pre-payment of your loan. There is usually a waiting period before which you might not be able to prepay the loan. Also, some banks convert the composite loan into a site loan if the loan is foreclosed. Speak to your bank and find out the details. If your bank doesn’t agree, consider a balance transfer to another lender. Usually, balance transfer for composite loans isn’t easy. Understand the process before you decide to go for a balance transfer.

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