Banks operating in the country offer plot or land loans to eligible applicants. The loans can be availed to buy a residential plot where you can build your dream home. They are provided at attractive rates and can be repaid in affordable EMIs with the maximum repayment tenure going up to 25 years. Read on to know more about plot loans.
|Banks||Interest Rate (p.a.)|
|SBI Plot Loans||6.75% - 7.30%|
|HDFC Plot Loans||7.05% - 7.95%|
|ICICI Bank Land Loan||7.00% - 7.80%|
|Federal Bank Plot Loan||7.65% - 7.80%|
|Shriram Housing Finance||8.90%|
|PNB Housing Plot Loan||8.55% -10.55%|
|Karnataka Bank Plot Loan||10.89%-12.09%|
|Maharashtra Bank Plot Loan||6.95%-7.25%|
Compare: Home Loan Interest Rate all Banks
Note: The EMI is calculated after considering the loan amount to be Rs.1 lakh, tenure being 120 months and the interest being the lowest as mentioned in the table above.
Using an EMI calculator will help you in knowing the amount which needs to be paid as EMI once you avail the plot loan. All you need to do is enter the loan amount, tenure in months, the interest rate and the processing fee and click on ‘Calculate’.
Plot loans are a unique banking product designed to facilitate the purchase of a plot of land. Also known as land loans, it is often confused as being same as a home loan. The difference between plot and home loans is that a plot loan can be availed for the purchase of the land where the house will be constructed later.
Some of the benefits of availing plot loans are listed below:
The eligibility criteria which needs to be fulfilled in order to avail a plot loan are listed below:
Listed below is the list of basic documents which you will need to furnish while applying for a plot loan. The documentation requirements are subject to change depending on the eligibility criteria laid down by different lending institutions.
Additionally, you may also be required to provide the following documents pertaining to the land.
Get Checklist: Documents Required for Home Loan
Tax benefits on plot loans can be availed only if you construct a house on the plot. The tax deductions can applicable only when the construction is completed. As per Section 80C of the Income Tax Act, you can avail deduction on the principal repayment component up to a maximum of Rs.1.50 lakh per annum.
You can also get tax benefits on the interest portion of the loan under Section 24 after construction of the house is completed and you start residing in the house. Under Section 24 of the Income Tax Act, you are eligible for an annual deduction of Rs.2 lakh. However, to avail that you need to convert the plot loan into a regular home loan.
In addition to this, you need also avail interest rate deduction and reduced interest rates for pre-construction.
Plot loans are approved only for the purchase of a residential plot of land and if the borrower has definite plans of building a house on the plot of land. Banks usually have a timeframe within which the residential property has to be completed on the purchased land. However, once the house has been completed, the completion or occupancy certificate can then be submitted to the bank after which the plot loan will be converted into a regular home loan. This gives the borrower the freedom to apply for tax benefits on the home loan as plot loans do not qualify for any tax deductions.
A good credit score is essential to get quick and hassle-free approvals for land loans. However, if you have bad credit, you can still hope to get a land loan sanctioned from a bank by taking a joint home loan with a spouse as your co-applicant, providing your spouse has a high credit score and a regular source of income. You can also approach the bank for a loan after improving your credit score, which can be done by clearing your past debts. You can also approach a bank with which you have an existing relationship or fixed deposits or other investments.
Yes, Non Resident Indians are eligible for plot loans from banks in India. However, the plot loan can only be used to buy a plot of land for residential use and cannot be used for any other purpose.
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