Canara Bank Plot Loan

Putting your hard earned money into buying a property is one of the wisest investments we can make. For most of us, it all begins with buying a piece of land either with a view to build a house at a later time or holding it as an investment apparatus. For some, buying a site can also be a second property investment after owning a house. Whatever the reason may be, real estate is evergreen and reaps long term monetary benefits.

As a trusted public sector bank in India, Canara bank offers a loans for a variety of housing needs which includes financial assistance for purchasing plots. The Canara site loan is the exclusive scheme that provides loans with pleasing features coupled with competitive interest rates. It offers loans to individuals looking forward to purchasing sites developed and promoted by state/town planning authorities, plots promoted by central and state government in association with private companies or offered exclusively. Layouts approved and developed by government agencies are also included.

In addition to the above, Canara Bank also encourages site loan borrowers to apply for a construction loan when they decide to build a structure on the vacant plot.

Features of Canara Bank Site Loan

• Available to all:: The bank offers finance for both existing and new customers with a sound financial background. NRIs looking at buying a plot can also make an application under this scheme.
• High loan quantum: It offers a loan of up to Rs.15 lacs for plots located in six metros of Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Secunderabad and Bangalore. For all other locations which includes non-metro centres, one can avail a loan of up to Rs.10 lacs under this scheme.
• Low margin for borrowers:If you’ve limited monetary resources, this can be the ideal loan for you since the burden is minimal. Your share in the overall costs of the plot is limited to 20% of the project, making it an affordable loan instrument with least burden on your budget.
• Pleasing repayment term option: The bank offers you the flexibility to choose a term of your choice to repay the borrowed amount. The repayment can be done in EMIs (Equated monthly installment) of up to 5 years, depending on your financial convenience.
• Security:The housing site in question is mortgaged until full repayment of the loan and suitable co-obligation or personal security in any other form will be insisted. This feature ensures little hassle for you as you don’t have to run around looking for a financially sound person who can sign up as a guarantor.
• Affordable rates and charges: This loan is offered at that ranges between 7.95% p.a. and 9.00% p.a. The processing fee is capped at just 0.5% of the proposed loan amount. The minimum processing fee applicable is Rs.1,500 with a cap of Rs.10,000, making it one of the most competitive offers in this category.

Quantum for Canara Bank Plot Loan

The quantum of Canara Site loan is 75 percent of the cost of the site or guidance value or the gross annual income of four years, whichever is lower.

Eligibility for Canara Bank Plot Loan

The eligibility criteria which need to be fulfilled are as follows:

• Age of the applicant must be less than 60 years
• Existing customers should have satisfactory dealings
• New customers should be properly introduced and should be creditworthy

Margin for Canara Bank Plot Loan

The margin for Canara Site loan is:

Security for Canara Bank Plot Loan

As security, the residential site which is planned to be purchased must be kept as mortgage. Personal guarantee or suitable co obligation of net worth could be insisted.

Documents Required for Canara Bank Plot Loan

The following documents need to be submitted for availing Canara Site Loan:

• Application form
• Two passport size photographs
• Site or layout plan issued by the development authorities
• Salary certificate of the last 6 months or Form 16 for salaried class
• Latest ITAO for businessmen/professionals
• Allotment letter issued by the development authorities
• Legal scrutiny report
• Undertaking for construction of the house to be completed within the time stipulated by the development authorities.

Repayment period for Canara Bank Plot Loan

The repayment period will be 10 years or until the borrower turns 65 years of age or the period permitted by the allotment agency for construction of the house.

FAQs:

1. Can I convert this loan into a housing loan at a later time?

   Yes, this Canara site loan can be converted into a housing loan if you decide to get the construction financed. Once the housing loan is approved, the outstanding amount from the site loan will be transferred to the new loan account.

2. Does Canara bank provide repayment holiday under the site loan scheme?

   The repayment of the borrowed amount will commence a month after the loan amount is disbursed. No repayment holiday is offered. In cases where payment is made in parts, the repayment will commence after 3 months from the date of disbursement of the loan.

3. What are the documentation charges applicable for the Canara site loan?

   Documentation charges payable are charged at the rate of Rs.100 per lac of the disbursed loan amount. It is subject to a minimum of Rs.1,000 with an upper cap of Rs.25,000.

4. As an applicant, am I required to provide a guarantee to secure the loan amount?

   There is requirement for personal guarantee. The site remains mortgaged until full repayment of the loan and acts as collateral.

5. What is the maximum term provided for repayment?

   Canara bank provides a maximum repayment period of up to 5 years. You’re free to choose a term of your choice.