Are You Applying For A Plot Loan? Here Are Some Top Things To Know
That’s why
purchasing land with a loan is an economically viable decision. Financial
institutions provide monetary assistance to buyers to purchase land plots and
parcels. Note that the plot loans are exclusively meant to construct homes.
If you want to
construct a commercial unit or want to use the land for agricultural purposes,
you’re ineligible to apply. There are certain intricacies associated with loans
for plots. So before applying for loans for plots, you should be aware of
certain complications.
Types of Plot Loans
Loans for plots,
also known as land loans, are of two types. They are:
ü Loans to purchase
a residential plot
ü Loans to buy a
property and construct a home
A majority of
financial institutions provide loans to borrowers of the second category. This
is because there are various types of risks involved in direct plot loans.
Important Factors to be aware of before
applying for Land Loans
Before applying
for a plot plus construction loan,
you should be aware of important factors. Here is the list of essential
elements to know before applying for land loans.
The Type of Land in which you are investing
One of the most
crucial factors to consider is the type of land you want to buy. You should
know whether you want it for your primary residence or agricultural purposes.
In most cases, land loans are available only for the sole purpose of
constructing your home.
The Location of the Plot you are buying
Another factor to
consider is the geographical location of the plot. A land loan will only let
you purchase plots situated within a particular municipality. In other words,
you won’t be able to buy plots located in other areas.
The objective behind purchasing the Plot
Before you invest
in a plot, you should know the plot’s exact use. Be clear in your mind about
how to utilise it in the future. Constructing on a purchased piece of the plot
provides you with lower interest rates. It also offers the lender a sense of
security.
Risks perceived by the Lenders
Before approving
your land loan, the lender will assess various factors to identify the risk
profile of a loan application. These factors usually include the objective of
land purchase, the timeline for construction, etc.
Features of a Land Loan which you should know
Here are the
features of a land loan you should be aware of.
ü It is essential
to buy the land within the limits of the municipality
ü You cannot use a
land loan for agricultural purposes
ü The total tenure
of the loan can reach 15 years
ü You shouldn’t buy
the plot in a village or industrial area
ü The tax deduction
is available for loan property construction
ü Based on the lender,
you can apply for a plot loan to buy land via direct allotment
Eligibility Criteria to apply for Plot Loans
To avail of land
loans, the borrower should be an Indian resident. Moreover, the borrower should
be an adult while applying for land loans. However, some specific lenders offer
land loans to applicants aged at least 25 years.
In other words,
lenders have varying norms in this regard. But note that you cannot avail of a
land loan if your age is above 65 years. To apply for a plot loan, you can
either be a salaried individual or self-employed.
Important Documents required for Plot Loans
To apply for a
land loan, you must submit the necessary documents. Apart from documents
supporting the borrower’s identity, you have to submit income proof documents
and land-related papers. Here is the list of documents the borrower should
submit while applying for a land loan.
ü Aadhar Card
ü Voter ID Card
ü Passport
ü Driving License
ü Savings Account
Statement
ü Sale Deed
ü PAN Card
ü Income Tax
Returns
ü Copy of Buyer
Agreement
ü NOC from the
builder
ü Development Agreement
So So, while applying for a land loan, keep the factors stated above in your mind.
Comments
Post a Comment