Plot Loan for Land Purchase – Interest Rates Starting at 8.55% p.a.
Build Your Dream Home with a Plot Purchase and Construction Loan
If you want to purchase a plot of land and build a home that suits your needs, a plot loan can help you finance the purchase. With FinMarket , you can explore plot loans with interest rates starting from 8.55% p.a.
Plot loans can offer a tenure of up to 25 years and a maximum loan amount of up to ₹10 crore or more, subject to the bank's terms and your eligibility.
Explore plot loan options and apply online with FinMarket.
What is a Plot Loan? Features and Benefits
A plot loan, also known as a land loan, is a financing option offered by banks, NBFCs, and housing finance companies to help you purchase residential land.
Here are some key features and benefits of plot loans:
- Interest rates : If you are purchasing land to build a home, you can avail yourself of a plot loan at a competitive interest rate. Applicable charges are communicated upfront, hence no hidden charges.
- Prepayment : Most financial institutions offer options to close the loan after completing the initial EMIs without pre-closure charges, subject to the lender's terms and conditions.
- Tax benefits : Tax benefits may be available after construction of a house, bungalow, or villa is completed on the plot purchased through the loan, subject to applicable tax laws.
- Loan Tenure: Plot loan tenure can range from 15 to 30 years, depending on the Bank, customer profile, age, and repayment capacity.
- Loan to value ratio(LTV): LTV refers to the percentage of the property's value that can be financed through a loan. For land loans, the LTV ratio can be up to 80% of the total land value, subject to the Bankers assessment.
- Balance transfer: Existing plot loan borrowers may be able to transfer their outstanding loan balance to another lender/NBFC offering suitable terms, subject to eligibility and the financier's (lender's) approval.
- Top-up loan: A top-up loan is an additional loan amount provided over and above an existing plot loan, subject to the bank's eligibility criteria.
- Quick disbursal: Once the plot loan is approved and all required formalities are completed, the lender disburses the approved amount as per the agreed terms.
What Are the Different Types of Plot Loans?
What Are the Different Types of Plot Loans?
Plot loans can generally be used for the following purposes:
1.Loan to Purchase a Residential Plot or Land
This type of loan can be used to purchase a vacant residential plot or piece of land. The plot should be located within municipal or corporation limits, as applicable.
- The land or plot should be purchased strictly for non-agricultural purposes.
2.Purchase a Plot and Construct a House
A plot plus construction loan allows you to purchase residential land and construct a house on the plot within the stipulated time.
What Are the Plot Loan Eligibility Criteria?
Plot loan eligibility varies depending on the Bank, applicant profile, income, repayment capacity, and other applicable factors.
| Criteria | Salaried | Self-Employed |
|---|---|---|
| Age (Primary applicant) | 23 years to 55 years | 23 years to 55 years |
| Age (Co-applicant) | 18 years to 55 years | 18 years to 55 years |
| Net Monthly Income | Rs.35,000 | Rs.35,000 |
| Loan Tenure | Up to 25 years | Up to 25 years |
| CIBIL Score | Above 750 | Above 750 |
| Minimum Loan Amount | ₹10 lakhs | ₹10 lakhs |
| Maximum Loan Amount | Up to ₹10 crore | Up to ₹10 crore |
Factors Determining Your Land Loan Eligibility
- Income and job stability : A steady income and stable work history can demonstrate your ability to repay the loan and manage monthly EMIs.
- Credit score : A CIBIL score of 750 or above is considered favourable for plot loan eligibility.
- Existing debts : Existing loan obligations can affect your repayment capacity and overall eligibility.
- Applicant age : Your age can affect the maximum repayment tenure and overall loan eligibility.
- Plot legality : The plot should have clear legal titles and the required approvals from the relevant local authorities.
- Down payment ability : You may need to contribute the portion of the property value that is not financed by the lender under its applicable LTV limits.
- Co-applicant : Adding an earning co-applicant may help increase the combined income considered for loan eligibility, subject to the lender's criteria.
What Documents Are Required for a Plot Loan?
The documents required for a plot loan may vary depending on the lender and the applicant's employment profile.
| Criteria | Salaried | Self-Employed |
|---|---|---|
| Identity Proof | Passport, Voter's ID, Driving License or PAN Card. | Passport, Voter's ID, Driving License or PAN Card. |
| Residence Proof | Passport or utility bills. | Passport or utility bills. |
| Income proof | Past two years bank statement of salary account. | Past two years audited financial statements. |
| Property documents |
|
|
Plot Loan Interest Rates and Processing Fees Across Banks & NBFCs
The following table provides the interest rates and processing fees for plot loans offered by various banks and NBFCs:
| Banks/NBFC Names | Interest Rates | Processing Fees | Enquire Now |
|---|---|---|---|
| HDFC Plot Loan | 8.55% | Up to 1.5% | Apply for plot loan |
| AXIS Plot Loan | 8.65% | Up to 1% | Apply for plot loan |
| ICICI Plot Loan | 8.55% | Up to 1.5% | Apply for plot loan |
| Kotak Plot Loan | 8.85% | Up to 1% | Apply for plot loan |
| Bajaj Finserv Plot Loan | 8.45% | Up to 4% | Apply for plot loan |
| SBI Plot Loan | 9.4% | Up to 0.35% | Apply for plot loan |
| IDFC Plot Loan | 8.75% | Up to 3% | Apply for plot loan |
| Tata Capital Plot Loan | 8.95% | Up to 1% | Apply for plot loan |
| PNB Plot Loan | 8.5% | Up to 1% | Apply for plot loan |
| Aditya Birla Plot Loan | 7.55% | Up to 1% | Apply for plot loan |
Tips for Getting a Plot Loan Approved: Do's and Don'ts
Applying for a plot loan becomes easier when you understand the Bank’s requirements, prepare the necessary documents, and assess your repayment capacity beforehand. Keep the following points in mind when applying for a land loan:
Do's
- Maintain a good credit history: A CIBIL score above 750 is considered ideal.
- Check your eligibility: Confirm your eligibility with the Bank before submitting your application.
- Compare lenders: ACompare interest rates offered by different lenders to understand the available options.
- Check all charges: Review processing fees and other applicable charges to understand the total cost of the loan.
- Understand prepayment terms: Before finalising a lender, check the terms and conditions related to loan prepayment.
- Plan your repayment: Assess your monthly finances and plan your EMI repayment before borrowing.
- Check the required documents: Make sure you have the required personal, income, and property documents ready.
- Check your FOIR: Ensure that the proposed loan is in line with your Fixed Obligations to Income Ratio (FOIR).
- Calculate the required loan amount: Apply for a loan amount that matches your requirement and repayment capacity.
Don'ts
- Don't ignore your credit score: Check your credit profile before applying for a plot loan.
- Don't make multiple loan enquiries: Avoid applying with several lenders at the same time, as multiple credit enquiries may affect your credit score.
- Don't sign without reading: Read the loan agreement and understand its terms and conditions before signing.
- Don't take on a loan you cannot repay: Be sure you can comfortably manage the EMIs before taking the loan or asking someone to co-sign.
- Don't apply without calculating your requirement: Determine the loan amount you need and assess your ability to repay it.
- Don't rush after a rejection: If your loan application is rejected, it is advisable to wait for at least six months before applying again.
Frequently Asked Questions
Find answers to all your queries ranging from application procedure to eligibility criteria, interest rates, and documents required.
Frequently Asked Questions About Plot Loans
What is a plot loan?
A plot loan is a financing option that helps you purchase residential land to build your dream home or invest in property.
What is the maximum tenure of a plot loan?
The maximum tenure for a plot loan is 25 years, subject to the retirement age and the Bank’s terms. However, the applicable tenure may vary from Bank to Bank.
Can I get tax benefits on a plot loan?
No, a plot loan itself does not offer the same tax benefits as a home loan.Tax deductions may be available for a loan taken to construct a house on the land, subject to applicable tax laws.
What is the maximum time available for starting construction after taking a land loan?
The construction should be completed within two years from the date of disbursement of the loan.
Does a construction loan include the cost of labour and raw materials?
Yes. A construction loan includes the cost of labour and raw materials, subject to the lender's applicable terms and conditions.
Explore More Frequently Asked Questions About Plot Loan
Have Questions? We’re Here to Help.
Call us toll-free at 1800-572-2132 or send an email to info@finmarket.in