Loan for Plot Purchase
Many financial institutions offer loan for plot purchases which is also known as a plot loan. You can always check your eligibility for a plot loan using a plot loan eligibility calculator. You should bear in mind that plot loans are different from home loans. If you have a good CIBIL score and meet all the eligibility criteria, you can expect to get a low plot loan interest rate as well. Home loans are taken for purchasing properties which are being built or are already constructed. Loan for plot purchase is those taken for buying a plot of land where you will construct a home in the future.
Plots can be bought through direct allotment in real estate projects or housing societies or even as resale purchases in housing societies or projects by development authorities. The plot should be within city limits or outside city limits but should be used only for residential purposes, should be non-agricultural and should have approval from a requisite authority. Most financial institutions offer financing up to 70% of the cost of the plot and the FOIR (fixed obligation to income ratio) up to 60% is given based on your net adjusted income. The margin money that you have to contribute varies from 30-50% in most cases. Rates of interest are a little higher as compared to regular home loan interest rates and tenures range between 15-20 years. You do not get tax benefits for EMI repayments for these loans although you will get tax benefits if construction commences on the plot of land.
How to Apply for Plot Loan
You can apply in a similar manner as a home loan and the process is almost the same where you have to fill out the application form and submit it along with necessary documents. You will be assessed for eligibility and once these formalities have been completed, you will get your sanction letter post which legal verification and other processes will start till the amount is disbursed.
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