Finance

Is It Possible To Get A Loan For The Purchase Of Land?

Some people fancy apartments, whereas others prefer to build their houses from scratch. Buying a piece of land becomes a prerequisite to constructing a home on your terms. Investing in a plot of land is always a good idea, regardless of when you want to build the house. Real estate investments are among the most secure and profitable options. It is among the few assets that can generate exponential returns over the years. However, the land is a limited resource, and it’s best to secure yours as soon as possible. Opting for a plot loan can help you arrange funds to purchase the land. Read on to learn more about plot loans.

What is a plot loan?

A plot loan or land loan is a type of secured credit product offered by financial institutions to people who want to buy a plot. The loan can be used only for purchasing land and not for other expenses. If you are short on funds for your dreamland, it’s best to take a plot loan. One can easily repay the loan amount through affordable EMIs, as these are long-term loans. In most cases, the tenure for plot loans is up to 15 years. However, some financial institutions can increase this limit. The loan-to-value ratio for plot loans is up to 75%. Plot loan interest rates are similar to a home loan rate.

Plot loan eligibility and documentation

Now that we understand what a plot loan entails let’s look into its eligibility criteria and documentation requirements.

Eligibility for plot loans

  • The age of the plot loan applicant must be greater than 21 years at the time of application and shouldn’t exceed 70 at maturity.
  • The applicant must be an Indian National or Resident.
  • The loan applicant must be a salaried employee or self-employed.
  • The loan applicant must have a stable income source.
  • The applicant’s credit score should be over 750 points.

Documentation for plot loans

  • Duly filled plot loan application form
  • Proof of applicant’s age
  • Proof of applicant’s primary residence
  • Academic qualification proof
  • Proof of stable income
  • Property documents, including approved plans, a title deed, etc.

Benefits of taking a plot loan

Plot loans can bridge the gap between you and the dreamland or the house you want to build. It can help you get the ideal land in a good neighborhood. Moreover, you can own land using a plot loan even if your savings are low. Here are some significant benefits of taking a plot loan.

1. Low cost of borrowing funds

The cost of borrowing funds using a plot loan is much less than other loan products like a personal loan. It’s because plot loans are secured credit products, and the risk for the lending party is much lower. Therefore, they offer the loan amount at relatively lower interest rates. Although the exact interest rate varies on your credit profile, institutions like PNB Housing offer plot loans at interest rates starting from 7.75% p.a.

2. Choose a safe neighborhood

Paying for the entire plot value at once is not everybody’s cup of tea. Therefore, many people have to compromise on the neighborhood and facilities while buying a piece of land. However, this can be easily fixed using plot loans. You can make a higher down payment amount and choose to finance the remaining value using a plot loan. An affordable EMI plan can help you easily repay the borrowed amount.

3. Create the dream house from scratch

Ready-to-move-in apartments and houses might seem convenient. However, you have to compromise on a lot of things. You don’t have much flexibility to design it as per your needs. Reconstructing can cost a fortune and is also time-consuming. Buying a plot provides the flexibility to build the dream house on your terms. You are in complete control of how the house will appear, what appliances and fixtures are used, the level of security, the number of rooms, the size of rooms, etc.

4. Tax benefits

Plot loans are also great for saving big on tax expenses. As per the Indian Income Tax Act, you are eligible for annual deductions on the interest component up to INR 2,00,000. As per Section 80C, borrowers are also eligible for yearly deductions (up to INR 1,50,000) on the principal repayment component. There are many other benefits of a plot loan.

For more valuable information visit this website

Business Nest

Business Nest’s goal is to help entrepreneurs build the business of their dreams and to assist anyone working in a small business makes smart decisions about products, services, and ideas.

Related Articles

56 Comments

  1. Heya i’m for the primary time here. I came across this board and I in finding It truly useful & it helped me out a lot. I am hoping to provide something back and help others like you helped me.

  2. Greetings! Very helpful advice within this article! It is the little changes that make the greatest changes. Thanks a lot for sharing!

  3. Hi i am kavin, its my first time to commenting anywhere, when i read this post i thought i could also make comment due to this brilliant piece of writing.

  4. Hey there! This is kind of off topic but I need some advice from an established blog. Is it very hard to set up your own blog? I’m not very techincal but I can figure things out pretty fast. I’m thinking about setting up my own but I’m not sure where to start. Do you have any tips or suggestions? Appreciate it

  5. Hi, Neat post. There is a problem with your site in internet explorer, may check this? IE still is the marketplace leader and a large component to folks will leave out your magnificent writing due to this problem.

  6. Thank you for the auspicious writeup. It actually used to be a amusement account it. Glance complicated to far added agreeable from you! By the way, how can we keep in touch?

  7. When I originally commented I seem to have clicked the -Notify me when new comments are added- checkbox and now every time a comment is added I get four emails with the same comment. Is there a means you can remove me from that service? Thank you!

  8. Nice post. I learn something new and challenging on blogs I stumbleupon every day. It will always be helpful to read content from other writers and practice a little something from their websites.

  9. We stumbled over here different page and thought I might as well check things out. I like what I see so now i’m following you. Look forward to looking over your web page for a second time.

  10. I was recommended this website by my cousin. I am not sure whether this post is written by him as no one else know such detailed about my problem. You are amazing! Thanks!

  11. Hey I know this is off topic but I was wondering if you knew of any widgets I could add to my blog that automatically tweet my newest twitter updates. I’ve been looking for a plug-in like this for quite some time and was hoping maybe you would have some experience with something like this. Please let me know if you run into anything. I truly enjoy reading your blog and I look forward to your new updates.

  12. I’ve been exploring for a little bit for any high-quality articles or blog posts in this kind of area . Exploring in Yahoo I eventually stumbled upon this site. Reading this info So i’m glad to exhibit that I have a very just right uncanny feeling I found out exactly what I needed. I so much for sure will make certain to don?t fail to remember this web site and give it a look on a constant basis.

  13. When I originally commented I clicked the “Notify me when new comments are added” checkbox and now each time a comment is added I get three emails with the same comment. Is there any way you can remove me from that service? Thanks a lot!

  14. hi!,I love your writing so so much! proportion we keep up a correspondence more approximately your post on AOL? I need an expert in this space to unravel my problem. May be that is you! Looking forward to peer you.

  15. Normally I do not read article on blogs, however I wish to say that this write-up very pressured me to take a look at and do so! Your writing taste has been amazed me. Thank you, quite great article.

  16. Howdy! I could have sworn I’ve been to this site before but after browsing through some of the posts I realized it’s new to me. Anyhow, I’m definitely pleased I discovered it and I’ll be bookmarking it and checking back frequently!

  17. wonderful post, very informative. I’m wondering why the other experts of this sector do not understand this. You should continue your writing. I am sure, you have a huge readers’ base already!

  18. Hey there just wanted to give you a quick heads up. The text in your post seem to be running off the screen in Internet explorer. I’m not sure if this is a format issue or something to do with internet browser compatibility but I thought I’d post to let you know. The layout look great though! Hope you get the problem solved soon. Kudos

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Cialis siparis vermek icin https://cialisbrx.com adresinden online cialis satin alabilirsiniz.Viagra hap sadece www.viagrans.com adresinde.