The construction loan is a loan type that is used for financing the process of building a home or any real-estate project. The buyer or builder of the home acquires the construction loan for covering the project costs before the construction starts and the funds are released in accordance to the progress of construction. If you are undertaking major renovations or building a new home, the construction loan might be a suitable loan type for you. The instalments are received at various stages of the project rather than a lump sum loan amount.