What Is a Construction Loan?

A construction loan also known as a self-construction loan is financial instrument provided by the UAE banks for financing the construction of a property.

When might I need construction finance?

The purpose of this product is to cover the costs of the building project and construction costs. Because of the associated risks when compared to buying a ready property from an established developer, construction finance carries higher interest/profit rates than traditional mortgage loans.

How does construction finance work?

When a construction loan is availed by a borrower, the lender will pay the funds directly to the contractor rather than to the borrower. Construction loans may also be taken out to finance renovation and restoration projects.