A "low interest" loan shouldn't mean you have very little interest in paying it back!
  • Loading your search...
    Close

    Compare Home Loan Offers from Top Lenders. Apply Online and Get e-Approved Instantly.

  • Plot Loans is Rated as "Great!" by 27385 Users

    Fees & Charges

    Promised Interest Rate

    Customer Service

    Responsiveness

    Home Loan BYTES FROM OUR KITCHEN

    Plot Loans

    In India, purchase of land has been one of the age old forms of investment. Conventionally, investors are inclined towards purchasing property either as an investment for future resale or for building a house. So, in case you’re planning to purchase a piece of land or vacant plot, a plot or land loan might be the right choice for you.

    What is plot loan?

    Plot loans, also known as land loans, are a unique banking product designed to facilitate the purchase of a plot of land. A plot / land loan may often be confused with a home loan, as the latter also concerns the purchase of an existing / construction of new flat or house. However, land loans too addresses a similar need, with the prime difference that they are availed for the purchase of the land on which construction has to be carried out subsequently.

    Perfect Home Loan Deals for you

    While home loans may be obtained with relative ease, a land loan might not be as easy to get. The reason behind this being, land loans concern not only the purchase of land but also the subsequent development of property on the land. When it comes to land loans, lenders operate at a higher risk, as land loans carry significantly higher risk, as compared to home loans. Here, the lender requires assurance about returns on the investment. For this reason, if you wish to up your chances of obtaining a land loan, it would be beneficial if you can provide adequate assurance to the lender about your development plans on the purchased property.

    For lenders, an undeveloped property is a greater risk than a developed property, as it is much easier for the landowner to dismiss an undeveloped property rather than a property which will be utilized as a source of income. For example, if you wish to obtain a land loan for farming purposes, your chances of getting the loan might be higher, as compared to someone, who wishes to purely to purchase the property, but does not have any concrete plans on its development.

    In India, several leading banks like ICICI, Axis Bank, HDFC Bank, Punjab National Bank, IDBI, Federal Bank, etc. offer plot loans to customers for the purchase of land.

    Features & benefits of plot / land loans:

    Plot/land loans have been around for a while and are accompanied by a distinct set of features. Listed below are some of the notable features and benefits of land loans.

    1. Location & type of property:

      While home loans are available for all kinds or types or properties, a land loan may only be availed for the purchase of a residential plot. Another limitation in availing a plot loan is that the land in question must be located within the limits of the respective municipality or corporation. A plot loan is usually taken for the purchase of land with the idea of constructing a house.

    2. Loan to value ratio (LTV):

      Loan to value or LTV basically implies to the amount of loan you can get against a property. While the LTV ratio for home loans may be anywhere between “80% to 85%, for plot loans it is significantly lower and could be capped at a maximum of 70% of the land value. So, if you are considering taking a plot loan to purchase land and construct a house thereupon, expect to bear about 30% of the total cost of the land.

    3. Tax benefits:

      Contrary to popular belief, a land loan will not fetch you any tax benefits. You may however, avail tax benefits on a land loan, only if you plan to construct a house on the plot in the near future. In this case, the tax deduction will only be applicable on the construction amount of the loan and after the completion of the construction.

    4. Tenure:

      Compared to home loans, which usually carry longer tenure, a land loan is accompanied by a relatively shorter tenure. While the tenure for home loans may stretch up to a period of 30 years, the maximum available tenure for a land loan may stretch from 15 - 20 years.

    5. Loan amount limit:

      Plot loans offered by banks are often accompanied by a fixed upper limit. You may take the loan only up to a certain limit, as specified under the policy. Like other loans, different banks may carry different upper limits when it comes to land loans, so you must find out which suits you best based on your financial requirements.

    6. Clauses included:

      If you wish to opt for a land loan, do keep in mind, there are certain pre-requisites which you will have to observe. The most prominent clause of any land loan is that it requires the borrower to begin construction on the acquired plot of land within a specified period of time.

    7. Prepayment charges:

      Since a plot loan is not the same as a home loan, it is very likely that the loan provider may charge a prepayment penalty. In order to be sure, do enquire with your loan provider about the same beforehand.

    8. Interest rates:

      Like other types of loans, the interest rates on plot loans can also be floating or fixed, depending on the bank and the prevailing market conditions. However, interest rates on plot loans are relatively higher as compared to other types of loans like home loans or auto loans.

    9. EMIs:

      Home loans are usually characterized by shorter tenures and higher EMIs. This is for the reason that plot loans are sanctioned for a shorter duration as compared to most other types of loans. EMIs on plot loans are also dependent on a number of other factors like the repayment capacity of the borrower, borrower’s age, etc.

    10. Down payment:

      When it comes to land loans, down payments for them are usually higher. The loan to value ratio for land loans prevails around 70%, which means that the borrower would have to shell out around 30% of the plot value themselves.

    Plot loan eligibilty criteria

    Land loans may be obtained by individuals who are residents of India and aged above 21 years. While NRIs also constitute a prominent part of property buyers segment in India, there are not many banks which extend plot loans to this category of individuals. Also, interest rates on plot loans might also be slightly higher for NRIs.

    Documents required for plot loan

    Listed below is the list of basic documents which one may be required to furnish, in order to apply for a plot loan. The documentation requirements are subject to change depending on the eligibility criteria laid down by different lending institutions.

    1. Duly filled Application form
    2. Applicant’s photograph
    3. Proof of Identity
    4. Proof of Residence
    5. Most recent salary slip
    6. Bank statement for the last 6 months
    7. Form 16
    8. Cheque for loan processing fee

    Additionally, you may also be required to provide the following documents pertaining to the land.

    • Original documents pertaining to ownership of the land
    • ‘No Encumbrance’ Certificate for the plot
    • Layouts / drawings of the plot, duly approved by the Town Planning Authority.
    • Revenue receipts
    • Land records
    • Tax receipts for taxes paid by the landowner

    Plot Loan FAQ

    1. Will I get any tax benefits, if I take a plot loan?

      You may avail tax benefits on a construction loan, which forms a part of a plot loan. This implies that the loan combines the cost not only for purchasing the land but also to carry out construction on the purchased plot. A plot loan taken solely for the purpose of purchasing a plot or piece of land will not attract any tax benefit.

    2. I am a salaried individual. I wish to purchase a plot in order to begin construction of a house within the next 6 months. Am I eligible for a plot loan?

      Yes, you would be eligible for a plot loan, as the loan includes a clause which requires the borrower to begin construction of a house within a specified period of time.

    3. Can a plot loan be taken for purchasing agricultural or commercial land which is outside the city’s municipal or corporation limits?

      No, plot loans may only be taken for pieces of land which are located within the municipal limits and the land is meant for residential purposes.

    4. Does a loan for construction include the cost of labor and raw materials?

      Yes, a loan for construction will include both these costs.

    5. I am a self-employed Indian resident. Am I eligible for a plot loan?

      Yes, plot loans are also open to self-employed individuals who hold a healthy credit history.

    Plot Loan Reviews

    • Axis Bank Home Loan
      "Home loan"
      0.5 1.0/5 "Really Bad"
      Worst experience of my life. I am repelling on my decision to go with mymynta and axis bank, cannught place branch. They are all lazy and unprofessional people and do not care of the timelines and keep giving false promises for weeks. My personal experience of dealing with Anil from my Myntra and Sahil makol axis branch manager is a nightmare.
      Was this review helpful? 0
      , new delhi
      Reviewed on Oct 15, 2018
    • SBI Home Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      I got my home loan from State bank of India . Am satisfied with rate of interest which is promising one with nominal processing fees. The customer service and response is good. It took few days for the documentation and approval process . My payments gets auto debits from the account
      Was this review helpful? 1
      , coimbatore
      Reviewed on Oct 15, 2018
    • Oriental Bank of Commerce Home Loan
      "Best Financial Service"
      0.5 5.0/5 "Blown Away!"
      I got my housing loan from Oriental bank of commerce . Am satisfied with rate of interest of 8.8%which is nominal one The customer service and response is good. It instant approval process just they took 10 days but they assured for the loan They gave good tenure period which i make the payment through ECS . Their customer service is good and responsive. There are no processing fees.
      Was this review helpful? 1
      , mumbai
      Reviewed on Oct 15, 2018
    • Bank Bazaar Home Loan
      "Time saver"
      0.5 5.0/5 "Blown Away!"
      It is very convenient and easy, the step by step helping subtitles and energy and time saving. U don't have to go bank to bank for the application of loan. Just open the app and fill the information and you r ready to go. Infact it also saves nature by no paper required to fill any forms.
      Was this review helpful? 0
      , pune
      Reviewed on Oct 15, 2018
    • Bank Bazaar Home Loan
      "homeloan"
      0.5 4.0/5 "Great!"
      helpful for compare loans from all bank and choose best benefit bank for loan. and it is easy to fill-up form online and get call within 10 min from your side. it is time saving process in today's life. i am very thankful for your team. and stay connect.
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 13, 2018
    • HDFC Limited Home Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan with HDFC LTD and my experience was good, the loan amount was for Rs 28 lacs with nominal interest rate when compared to others. Customer service was good and they followed up on time The tenure period for this loan is 15 years.
      Was this review helpful? 1
      , kochi
      Reviewed on Oct 11, 2018
    • SBI Home Loan
      "GOOD"
      0.5 4.0/5 "Great!"
      I am using the housing loan from STATE BANK OF INDIA last 5 years. The process is not quick and it took 1 month to approve of the loan but they approved sufficient amount of loan. The service is good also the rate of interest is floating interest of 9%.
      Was this review helpful? 2
      , chennai
      Reviewed on Oct 11, 2018
    • Indiabulls Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It was a good experience with the home loan i had with Indian Bulls where the loan amount which they had provided had been sufficient and satisfactory as well. The interest rate with them has been nominal when compared with the market rate where it was around 8.75%. There has not been any sort of additional charges which had been made by them as well.
      Was this review helpful? 1
      , mumbai
      Reviewed on Oct 11, 2018
    • HDFC Limited Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken Home loan from HDFC Ltd , it look more than a month time for approval and that is Understandable as most of the Banks takes time in this Process. Interest Rates are Floating one. Till now paying my EMI's on time and don't have any issue with it.
      Was this review helpful? 1
      , lucknow
      Reviewed on Oct 11, 2018
    • Bank of Baroda Home Loan
      "Worst Experience"
      0.5 3.0/5 "Satisfactory"
      When i was in a process of applying Home Loan,It took a long time as they have not given me a first preference though I am a Govt employee. They made easier for IT professional people but for me they dragged things. There use to be big fine charges if the date gets miss.My phone number was shared to other sources and that was annoying.
      Was this review helpful? 1
      , bangalore
      Reviewed on Oct 11, 2018
    • Indian Bank Home Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan with Indian Bank and my experience was good, the loan amount was for Rs 19 lacs with nominal interest rate when compared to others. Customer service was good and they followed up on time. Tenure period was 10 years but i prelcosed within 5 years and there were no preclosure charges.
      Was this review helpful? 2
      , chennai
      Reviewed on Oct 10, 2018
    • DHFL Home Loan
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      I have taken home loan from Dhfl finance . Am not satisfied with the rate of interest which is 11% . There are processing fees which is also high one . They took 40 days for the documentation and approval. Not satisfied with customer service as they have to guide the customer with better rate of interest which could help the customer.
      Was this review helpful? 2
      , mumbai
      Reviewed on Oct 10, 2018
    • Axis Bank Home Loan
      "Taking overcharged amount"
      0.5 0.5/5 "Unacceptable"
      I had applied for TOP-UP from Axis Bank, (Loan Dept) Goregaon - West, branch on April 2018. Mr. Ayush the sales person told me submit all the necessary documents for the loan procedure. I told him that "I do not have OC & Society Share Certificate" but still he said that you will get TOPUP without submitting these documents. Regarding the TOPUP it got declined on 12th May 2018 & Mr. Ayush gave me sanction letter for BT on 16th May 2018. SIGN BY MR. KUNDAN JOSHI (EMP 84207) MANAGER. "I AM APPLIED FOR TOPUP." I had inquired about the processing fee in the other Axis Bank branch, I came to know that fee is Rs. 2950/- only But Goregaon West had charged me Rs. 11800/- (2 Cheques of Rs. 5900+5900/-)
      Was this review helpful? 2
      , mumbai
      Reviewed on Oct 10, 2018
    • ICICI Bank Home Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan with ICICI bank and my experience was good, the loan amount was for Rs 22 lacs with nominal interest rate when compared to other banks. Customer service was good and they followed up on time. The tenure period for this loan is for 30 years.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Oct 09, 2018
    • Indiabulls Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have taken my home loan with indiabulls.customer service was very good.i got good response and my loan amount as good as per my expectation and the rate of interest and processing fee they charge me nominal, there was no hidden charges they have taken and even tenure period they have given as i want.
      Was this review helpful? 1
      , kolkata
      Reviewed on Oct 09, 2018
    • review Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been taken my Home loan from National australia bank the service is good they charge premium per month of rs 14 thousand and i do payment through on line only and customer support team is good and they provide good benefit policy . so overall service is good.
      Was this review helpful? 0
      , kolkata
      Reviewed on Oct 09, 2018
    • DHFL Home Loan
      "Good Financial service"
      0.5 4.0/5 "Great!"
      I have taken home loan from DHFL finance . Am satisfied with the rate of interest which is quiet high . There is processing fees for the documentation and approval which is high too ,But they instantly approved Overall am satisfied with the customer service and response .
      Was this review helpful? 2
      , ahmedabad
      Reviewed on Oct 09, 2018
    • SBI Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a home loan with SBI and my experience was good, the process was smooth and i received my loan amount on time. Rate of interest was nominal when compared to other banks. Customer service was good with SBI and their follow up was very good.
      Was this review helpful? 2
      , navi mumbai
      Reviewed on Oct 08, 2018
    • Central Bank of India Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a home loan with Central Bank of India and my experience was good, the loan amount was based on my requirement and the rate of interest was nominal when compared to others. Customer service was good with this bank and they followed up on time.
      Was this review helpful? 1
      , vadodara
      Reviewed on Oct 08, 2018
    • Bank Bazaar Home Loan
      "regarding to web portal and customer service"
      0.5 5.0/5 "Blown Away!"
      yup, I experience this is one of the best services in India. because your service and response are very quickly for every viewer. Bank Bazar is so fast and proper platform for quickly obtain details about any type of loan. here available all indian banks.
      Was this review helpful? 1
      , vadodara
      Reviewed on Oct 08, 2018
    Common Loader Icon

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

    reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.