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.
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.
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.
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