Is the Credit Bank Loan Enough to Truly Build a Lifelong Home?

02 Dec Is the Credit Bank Loan Enough to Truly Build a Lifelong Home?

Obtaining financing from the Kuwait Credit Bank (KCB) for building a public or private residential plot is the cornerstone upon which every citizen’s dream of owning a lifelong home rests. But the question that occupies everyone’s mind is: Is the Credit Bank Loan for Building a Home sufficient to cover the quality and design standards the family aspires to? The answer requires precise financial and engineering analysis, taking into account the actual construction costs in new areas like Al Mutlaa and Sabah Al Ahmad.

ALoda Contracting Company, with over 18 years of experience as one of the largest Contracting Companies in Kuwait, provides you with a comprehensive financial plan and shows you how we adjust the design and specifications to the loan’s real capacity.

Credit Bank Loan for Building a Home: The Basis and Realistic Comparison

The Credit Bank Loan for Building a Home is allocated to support citizens in providing housing. This loan, known as the Housing Welfare Loan or Plot Loan, provides significant liquidity but does not always cover the costs of luxury Finishes or complex structural requirements.

1. The Loan’s Role in Construction Financing:

The Credit Bank Loan for Building a Home serves as the foundation for financing the Structural Shell Construction phase and basic Finishes. Most owners rely on it to cover:

• Structural Shell Contractor and the cost of primary materials (concrete and steel).
• A large part of the Building Contracting and Excavation Works for Construction costs.

2. Comparing the Loan to the Actual Cost (Al Mutlaa and Sabah Al Ahmad):

In reality, with the rise in material price increases and the requirements for Smart Finishes, the amount allocated from the Credit Bank Loan for Building a Home does not fully cover high-specification Turnkey Contracting projects.

New Areas (Al Mutlaa, Sabah Al Ahmad): These areas are characterized by challenges that may increase the Cost of Turnkey Villa Construction in Kuwait, such as the soil nature which may require more precise Excavation Works for Construction, and the cost of initial utility extensions.

High-Quality Construction: If you plan for Turnkey Home Construction Kuwait with “Super Deluxe” specifications, or if your plan includes a basement, the loan may cover a range between 60% to 80% of the total project cost, with the remainder requiring private liquidity from the owner.

Loan Shortfall Scenarios: And How ALoda Company Addresses Them?

The problem arises when the owner discovers that the Credit Bank Loan for Building a Home is insufficient to complete the project according to their aspirations. This shortfall can lead to project stoppage or compromising the quality of Finishes and Decorations.

a. Stoppage and Waste Scenario:

The owner is forced to halt work after completing Structural Shell Construction in search of additional liquidity. This stoppage leads to:

1. Stored materials corroding and being damaged by moisture and heat.
2. A significant delay in the Timeline for Villa Construction in Kuwait.
3. The need for Renovations and Refurbishments to the structural shell due to exposure to weather elements.

b. Compromising Quality Scenario:

To compensate for the funding shortfall, the owner may be forced to resort to Contractor Fraud offering low prices by using poor-quality materials in the Finishes, potentially leading to Hidden Defects in Finishes after 5 years.

The Solution: An Integrated Financial and Engineering Plan from ALoda Company:

We at ALoda Contracting Company help you overcome these scenarios through a three-pronged plan:

1. Engineering Axis (Sizing): Adjusting the Interior and Exterior Designs and specifications to match the available amount from the Credit Bank Loan for Building a Home, while maintaining the quality of Structural Shell Construction (quality is non-negotiable).
2. Financial Axis (Clarity): Clearly defining the additional amount required as “private liquidity” from the owner, through transparent contracts that specify the Cost of Turnkey Villa Construction in Kuwait without surprises.
3. Timeline Axis (Disbursement): Planning the disbursement stages of the Credit Bank Loan for Building a Home parallel to the construction milestones, ensuring a continuous flow of liquidity according to a defined Timeline for Villa Construction in Kuwait.

ALoda Contracting Company’s Role: Adjusting Design to Loan Capacity

We do not just provide Contracting and Maintenance services, but integrated consultancy services. The process of adjusting design and specifications to the capacity of the Credit Bank Loan for Building a Home is done through:

1. Defining Engineering Priorities:

• Priority of Structure and Foundations: The major portion of the loan is allocated to guarantee the quality of Structural Shell Construction and an experienced Structural Shell Contractor. Savings are never made on steel, concrete, or the Best Insulation System for Villas in Kuwait.
• Flexibility in Finishes: Some non-structural luxury Decorations can be deferred or a specific type of moderate Smart Finishes can be chosen initially, with the option to update them later with simple Renovations and Refurbishments.

2. Planning Disbursement Stages:

Disbursement of the Credit Bank Loan for Building a Home must be done in installments that align with the work progress. Our Engineering Contracting ensures that:

• The initial payments cover Excavation Works for Construction and the start of Structural Shell Construction.
• The middle payments cover the completion of the structure and the start of interior finishes.
• The final payments cover the Interior and Exterior Designs, Landscaping and Homes works, and handover.

3. Transitioning to Safe Turnkey Construction:

Even in case of a financial shortfall, Turnkey Construction remains the best option. We use our liquidity and procurement expertise to stabilize material price increases and ensure continuous work without stoppage, giving the client a safe solution for Turnkey Contracting.

The Owner’s Financial Plan: Loan + Private Liquidity

To ensure the success of the Turnkey Project and prevent stoppage, the owner must realize the requirements for private liquidity:

1. Determining the Total Amount: The Cost of Turnkey Villa Construction in Kuwait must be accurately estimated (via our detailed bids).
2. Calculating the Difference: Subtracting the value of the Credit Bank Loan for Building a Home from the total cost. This difference is the required private liquidity.
3. Providing Reserve: It is preferable to provide an additional financial reserve of 10% to 15% of the total cost to cover any unexpected amendments or changes in Interior and Exterior Designs.

Conclusion The Credit Bank Loan is Enough… With the Right Planning

The answer to Is the Credit Bank Loan Enough to Build a Home? is: Yes, it is enough for a durable foundation and quality construction, provided the planning is smart and the Contracting Company is trustworthy. ALoda Contracting Company guarantees you the utilization of the Credit Bank Loan for Building a Home with the highest efficiency, focusing on the quality of Structural Shell Construction first, and then adapting the Finishes to suit your budget. Choose the expertise that manages your project budget with the highest levels of professionalism.