Reasonable excavation step footage and lining support timing are highly important for improving tunnel construction efficiency and ensuring construction safety. Taking the Huanxian No. 1 Tunnel of the Xi-Yin railway as the basis of this study, a 3D numerical model was established using MIDAS GTS NX290 finite element software. This model was used to investigate the deformation and force characteristics of the tunnel-surrounding rock and support structures under three different excavation footages and four different lining construction timings; the numerical results were then compared with the on-site monitoring results. This research aimed to determine reasonable excavation parameters for the three-bench seven-step excavation method used in shallowly buried loess tunnels. The results revealed positive correlations between the excavation step footage and surface subsidence, crown subsidence, and clearance convergence. An excavation footage of 3 m could balance construction efficiency and safety effectively. Keeping the secondary lining construction time unchanged, the early closure of the initial support was beneficial for reducing the force on the secondary lining. Keeping the early closure time of the initial support unchanged, the early construction of the secondary lining would lead to an increase in the force on the secondary lining. The initial support of the tunnel is recommended to be closed as early as possible, and the construction of the secondary lining should be shifted by 21 m behind the upper step palm surface. By comparing the on-site monitoring data with the numerical simulation results, similar trends were observed, providing reference and guidance for the subsequent construction of large-section tunnels in shallowly buried loess formations.