Imperatives of Availing a Loan to Purchase Land

What should a person do, what is better? If one should go for buying a property and construct a home or directly buy a home in some society which would be far more accessible? Of course, a majority of the people will prefer the latter option. But that doesn’t mean you cannot purchase the land at all. It is just the matter of having a reasonable budget. You can get a loan for buying a property (land) too. Adhere to the following essentials to ensure you get the loan sanctioned with ease. A loan for land is slightly different from credit for housing. A bank or a non-banking finance company (NBFC) both can help you buy a plot and use it as per your requirement. You can construct a home, leave the plot as it is or sell it later on.

Not all the people want the hustle-bustle of life in societies. Hence, they keep looking for an opportunity to buy a house put for sale by someone else or construct one after purchasing the land. Either case, you need money. Banks can come for aid if you are getting a plot through direct allotment or its previous owner. If you are getting a plot at a location suitable for you, and you are eligible for a Home Loan, there is no point in missing the opportunity. Applying for a Home Loan can serve your purpose even for purchasing land, but it is called the land loan. And even if you already are paying off debt, your bank can offer a top-up of up to 50 Lakhs.

The other benefits of taking a loan for land purchase include:

1. Instant Approval

It takes only five minutes for the approval of a loan nowadays, provided you prove to be eligible for it. Your land purchase application won’t stay between the files for days or months. So you need not worry about losing the plot. You can immediately get the loan as soon as you find the plot.

2. Easy Availability of Money

It is a fact that several people are looking for a plot. If you do not receive the money, in time, it can slip away far from your reach. Banks do understand this; you get the payment in your account within 72 hours of approval.

3. Lower Interest

The rate of interest for this loan is lower than for a Housing Loan which means lower EMIs (Equated Monthly Instalments) and hassle-free processing.

4. The Choice to Go Digital

Home Loans are available online as well; you need not go from place to place to check the schemes; instead, every information you need is at the touch of your finger. If there is anything you do not understand, customer care support serves the purpose with just a phone call. Besides all these benefits, one needs to know that however, you are purchasing land to construct a house, it is not a Home Loan that you are availing, it is a land loan. Unlike Home Loans which are equal for all the types of houses, the land loans depend upon the location or type of property. You can notutilise this service for purchasing agricultural land or buying a plot in a village. But you can get credit for constructing the house there.

In a Home Loan, you can get up to 90% of the total amount while for a loan for land the maximum value is 70%. The rest 30%, you need to pay from your pocket. Also, there are no tax benefits for taking a land loan. The land loan also generally does not apply to NRIs, and even if certain banks offer such a credit, the rate of interest charged would be immensely high. And another major thing to keep a note of, while taking such a loan is that you do not get an extended period to repay the debt – the maximum tenure being 15 to 20 years. One more essential to keep in mind is – Though the interest is low for a land loan, EMIs are not equally low. Because of short tenure, your EMIs will be somewhat the same or may be higher than a Home Loan.

After you consider all the points, plan if you want a Home Loan or a land loan. Some of the Best Home Loan Options in India are:

• DHFL Home Loan
• HDFC Ltd Home Loan
• ICICI Bank Home Loan
• PNB Housing Home Loan

Purchasing land to build a home, or home directly requires proper planning. Compare the benefits before coming to any conclusion.