Loan for Buying Plot? Here’s all you need to know!
Buying a plot or house of land on which to build one, can both seem to be equally confusing. A lot of the issues you face will be the same in both cases. But, the kind of loan you take out can be specific to the purpose. Financial institutions don’t just offer a home loan; they also provide plot loans, which apply when a piece of land is purchased instead of a house.
Here is everything you need to know about plot loans.
What is a Plot Loan?
If you have been wondering whether a home loan will apply when the plot of land you are buying, your consideration has been valid. Sometimes, it is not purchasing the house you need the loan for but purchasing the property or land on which you will later build your home.
In such a situation, you might need to take a plot loan, also referred to as a land loan, which is a loan that banks and other financial institutions offer precisely for this purpose. It is not a loan against the plot but a loan for buying the plot instead.
Also, a plot loan is different from a home loan in that the latter is only available to purchase residential houses that have already been built.
Will you be eligible for taking a plot loan?
There are specific criteria that you need to satisfy to be eligible to take a plot loan. At the top of the list, you must be an Indian citizen residing in India to take such a loan out. If you are a non-resident Indian, you will still be eligible to purchase a plot loan, but the plot of land purchased will mandatorily have to be used for the construction of a residential home.
You will also have to be an adult in the eyes of Indian law, which means that you will have to be at least 18 years of age. Besides, the upper age limit on loan receivers is 65 years. You will also need to be employed, but you could either be a salaried employee or be self-employed to fulfill this requirement.
Why should you take a plot loan?
Plot loans are available to purchase residential plots of land, on which you can go ahead and build to your satisfaction. But that is most certainly not all! Plot loans generally have a low processing fee and no possibility of a prepayment penalty.
Besides, the documentation you will have to produce will also be minimal. The biggest pro in favor of taking out a loan would have to be that interest on a plot loan generally comes at attractive rates. Plus, the loan repayment installments and tenures are all very affordable and reasonable, too.
You can get a variety of benefits and advantages out of a loan. It would be highly advisable for you to take a loan to fulfill the dreams of building your dream home! However, it would be best if you compared various schemes to select the best one.