Plot Loans

A plot loan, also known as a land loan or plot purchase loan, is a type of loan provided by banks and NBFCs to individuals or businesses to purchase a plot of land. This loan is specifically designed to assist individuals in purchasing a piece of land for various purposes, such as constructing a house, developing a commercial property, or investing in real estate.

Check out the plot loan interest rates offered by different banks and housing finances that are mentioned in this page. 

Features of Loan for Land Purchase

• Land as a resource is finite, making it a valuable investment with higher resale returns.
• Purchasing land as an investment offers little to no waiting period.
• Individuals can consider plots to be an affordable comparison.
• Allows the buyer the freedom and flexibility to begin construction on their own home according to their requirements.

Plot Loan Interest Rate 2024

Here are the land loan interest rates: 

Who is Eligible to Apply for Loan to Buy a Plot?

• Plot loans are available to Indian residents. NRIs who want to buy a plot of land and build a house can apply for a housing loan.
• Those who are salaried or self-employed/business owners are qualified.
• Loan applicants with credit ratings of 750 or higher have a better chance of getting plot loans. Many lenders also provide cheaper interest rates to applicants with better credit.
• Age: Lenders often give plot loans to new loan applicants/existing borrowers (in the case of a balance transfer) between the ages of 18 and 70.

Individual lenders may also consider an applicant's income, liabilities, assets possessed, work experience (for salaried), and business continuity (for business owners) when considering plot loan eligibility.

Documents Required to Get Loan for Plot Purchase 

The documentation procedure for a plot loan is similar to that of a home loan. The following are some of the critical documents needed to apply for a plot loan:

• Application form duly completed.
• Proof of age.
• Documents pertaining to plots of land.
• plot layouts and drawings (approved by the respective authority.)
• Income verification.
• Evidence of employment/business.
• Address verification.

Tax Exemption on Plot Loan

Tax breaks on plot loans are only available if you build a residence on the property. Tax deductions are only available once the building is done. Section 80C of our Income Tax Act allows you to deduct the principal payment component of up to a maximum of Rs. 1.50 lakh per year.

You can also earn tax breaks on the interest attribute of the loan under Section 24 after the house is built and you begin living there. You are entitled to an Rs.2 lakh annual deduction under Section 24 of the Income Tax Act. To do so - you will convert the plot loan into a conventional home loan.