Whether you’re a first-time homebuyer or an experienced one, a home loan is one of the most important things you need to know about before making a purchase. While many people prefer to buy an already constructed house or apartment, many others choose to buy a residential plot of land, either for investment purposes or to construct a house of their own design on it. This is when you will have to decide whether you need to apply for a home loan or a plot loan. What is the difference and what are the benefits of each?
The basic difference between both these kinds of loans is that a home loan can only be used to buy an already constructed, or under-construction, residential property, whether it is a house or an apartment. A plot loan, also called a land loan, can only be used to buy a plot of land that has been earmarked for residential property construction.
Features of a plot loan
Keep in mind the points given below before you apply for a plot loan:
Features of a home loan
Both home loan and plot loan have similar eligibility criteria, interest rates, and application process, although this can also be dependent on the bank or NBFC that you are applying from. Your credit score also plays an important part in your home loan application process, whether it is for a home loan or a plot loan.
Understanding the purpose and features of both a home loan and a plot loan can help you decide which one would be best suited to your requirements, whether it is a ready-to-move in residential unit or one that will be constructed later as per your needs.
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