Are you looking to buy a plot? Do you need a loan to get it financed? Read on to find out all about plot loan, land loan interest rates, and the eligibility criteria for a loan against plot to make a well-informed choice. Understand whether a home loan on plot gets you tax benefits and check free CIBIL score to assess how much loan you can get.
A plot loan is granted by banks and other financial institutes to eligible applicants so that they can build their dream homes at their convenience.
By availing of these loans, you can buy a residential plot to make your home in the future. Banks offer attractive interest rates that allow the customers to pay reasonable EMIs every month until the end of their selected tenures. In general, the tenure goes up to 25 years, depending on your affordability.
Plot loans and home loans are often used as synonyms by many people. However, these are two different types of loans that are granted by banks and financial institutes for different purposes. The intention may be similar, the procedure and the reasons unique for both types of loans.
If you are intending to apply for a plot loan soon, here is all you need to know regarding its application procedure, eligibility criteria, different types, and more.
Tip - Check Your Cibil Score before applying for a plot loan
A plot loan is granted to those who primarily want to buy land and build their home there in the future. Plot loans are granted by several banks and other institutes.
Plot loans are designed mainly for those who want to purchase land for future purposes. It is also called a land loan.
The land is a great thing to invest in, for it increases its value over time. Therefore, at the resale, it can give an immense return to the seller.
The repayment of plot loans is mainly made in the form of monthly instalments during a selected tenure that the borrower chooses before getting the loan from the lender. Loan for plot purchase had emerged in India a long time back. People used to buy for several purposes. Building one’s own home is still one of the predominant reasons why most people get plot loans.
The loan to buy plot is a procedure that does not remain the same for all banks and financial institutes in the country.
Several banks offer different interest rates to their customers when it comes to plot loans.
If you are intending to apply for a plot loan soon, take a look at the chart below to understand and analyse different interest rates, offers, tenure, and other details.
|Bank Names||Interest Rate for Plot Loans|
|ICICI Bank Plot Loan||7.0%-7.80%|
|Federal Bank Plot Loan||7.65%-7.80%|
|SBI Plot Loan||7.50%-7.70%|
|Karnataka Bank Plot Loan||10.89%-12.9%|
|Maharashtra Bank Land Loan||6.95%-7.25%|
|HDFC Bank Plot Loans||7.05%-7.95%|
|PNB Housing land loans||8.55%-10.55%|
|Shriram Housing Finance Plot Loans||8.9%|
ICICI Bank, Federal Bank, and HDFC Bank offer a similar plot loan interest rate. If you want to go for an even lower interest rate, consider checking out the Maharashtra Bank land loan offers.
Land loan interest rates differ from one bank to the other. Make sure you understand and analyse all different parameters before applying for a land loan in the future. It is a big commitment that you will have to fulfil after taking out a land loan. Therefore, go for the plan that fits your budget and suits your demands properly.
There are several unique features of a plot loan that you need to keep in mind if you want to apply for a land loan soon.
A loan against plot has a plethora of unique features that make it different from the other loans offered by banks.
Make sure you check your eligibility using a plot loan eligibility calculator to understand whether or not you are eligible to apply for plot loans.
In order to use a calculator, visit the online page of your preferred bank online. Then go to the section that covers land loans.
You will be asked to put all your personal as well as financial details so that they can examine whether or not you are eligible to apply for a land loan at the moment.
Land loans are generally huge amounts that you have to repay for a prolonged period along with an added interest rate. Make sure you calculate your finances beforehand and make a solid strategy to manage your expenses during the repayment period of your land loan.
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There are several factors that affect your loan application notice examined by your preferred lender.
The eligibility criteria that need to be maintained if you want to apply for a plot loan are listed below:
Check free CIBIL score before applying for a land loan to analyse whether or not you are eligible to apply for that loan.
No matter whether you are a self-employed individual or a salaried person, there are some common and essential documents that you need to note before applying for a land loan. The main documents required for plot plan include:
Also Check - Documents Required for Home Loan
Since plot loans and home loans do not qualify as the same kind of loans, land loans cannot give you any such benefits. Your plot loan cannot be tax exempted completely due to the terms and regulations.
However, if you decide to build your house in the same plot that you bought after taking the land loan, a certain percentage of tax deduction can be applied. If you decide to resell this place, tax deduction too will not be applicable to you. A home loan against property construction will not bring you any tax deduction, and neither will your loan will be free from taxes in any situation.
Also Read - Tax Benefits on Second Home Loan
If you are a self-employed or a salaried individual who has a solid income source, you can easily apply for a residential land loan of up to Rs.1,00,00,000 in order to purchase empty land to construct your own house. You can purchase the place to build your house or you can also buy it for reselling purposes.
However, a home loan against property interest rates remains on the higher side if you decide to sell it.
The major differences between a home loan and a plot loan are as follows:
The loan for plot purchases can be divided into several types depending on the mode of purchase followed by the buyer.
If you dream of building your dream home one day in the future, taking a plot loan can be the smartest step towards your dream. It not only allows you to explore your desires financially but also offers you a loan at low-interest rates as well.
Buying your own land and building your property on your own is indeed the better way around getting your own home.
A constant reduction in your interest rate also takes place when you take a land loan. It gives you a secured future and helps you make financially informed decisions in the long run.
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Visit your preferred bank's official website online. Put all the necessary personal and financial details first. Whether you are a salaried or self-employed individual has an immense role to play when it comes to the land loan interest rates.
Make sure you use an online EMI calculator to calculate and strategies your finances beforehand. If the available loan offers on the site seem feasible to you that fit your budget properly, apply for it and wait for a few days for its approval.
You can also apply for Plot Loan at MyMoneyMantra
MyMoneyMantra is India’s largest phygital loan distributor. With trust of 70 lakh customers, we assure hassle free access to the best Home Loans up to 10 crore for housing loan borrowers in India. Our service is 100% free. We use latest technology and AI to serve customers across the length & breadth of our diverse country. Check Eligibility & Apply.
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To put it simply, a loan is granted to those who aim to build their house from scratch in a pick and place.
On the other hand, when you take a home loan, you can buy an already constructed house or apartment.
If you have a credit score of 700 to 750, you will most likely get land loans without any hassle.
If you have bad credit, convince your lender why you are a responsible borrower. If you have a stable source of income and no other financial obligations, make them understand how you can smoothly keep repeating your monthly EMIs, and other bills on time during the entire repayment period.
Yes, an NRI can easily apply for a plot loan similar to any other resident in India at any Indian bank or other financial institutes.
When you have a home loan, a tax deduction is possible. However, with a land loan, tax deduction is not possible. Many people convert their land loans into regular home loans once the construction is completed. Simply submit the completion certificates of construction and your occupation details to your lender to begin the process.
Wait for around 4 to 6 weeks after submitting your application to your lender.
Most banks offer a minimum land loan of 8 lakh to the customers.
Most banks charge a processing fee of 0.5% to 1%, which turns out to be around 10,000/-
Most banks allow their customers to take out a long loan for 15 years maximum. However, a few banks are there that allow up to 30 years of tenures for exceptional applicants.
You need to have a CIBIL score of at least 700 to be eligible to apply for a plot loan.