If you come across a plot for sale that you feel makes the perfect location for your future home, then a plot loan can help you take advantage of the opportunity. Unlike home purchase loans which are used to purchase existing, built-up properties, plot loans allow you to purchase land.

You can use a plot loan to buy land so you can build on it in the future. While home loans can have tenures of upto 30 years, plot loans extend only up to 15 years.

One of the restrictions on plot loans in India is that they cannot be used to purchase agricultural land. Aside from that, it is fairly easy to apply and get approval for a plot loan. Normally, it takes no longer than a week for your application to be approved. To apply for a plot loan you have to be a minimum of 18 years old and not more than 70 years old.

How much is the maximum loan amount?

This changes depending on which bank or finance company you approach. In a majority of cases, if the value of the property is less than 75 lakhs, your loan amount can be as much as 90% of the value of the property. As the value of the property increases, the maximum loan coverage is about 75%. However, it is best to speak to the bank or finance company to get to know the exact amount of loan you are eligible for.

Co-Applicants make it better

If you apply for a plot loan along with an earning co-applicant, you are likely to be able to take larger loan amounts. In some cases, having co-applicants also leads to lower interest rates. Check with the bank or finance company you are planning to borrow from about this.

What are the charges for a plot loan?

There are two different kinds of expenses involved before and after a plot loan is approved.

The first is the pre-sanction charge, which includes the fees for a search of the property and verification of legal ownership of the property. Then there is the valuers fees, which determines the property value and the amount of loan you are eligible for.

After that, there are post-sanction charges like stamp duty and property insurance along with applicable registration fees and taxes.

Learn more about our plot and home construction loans.


The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.

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