Rahul had a dream. A dream to own a home. A home that spelled his taste and his lifestyle. Ready-to-move-in houses and apartments were not an option for him as they didn’t seem anything close to the house of his dreams. His plan was to buy a plot, sit with an architect, and get the house designed according to his wish. The very first step in this direction was to buy a plot. The plot he had zeroed in on was convenient to him in every way. His family had also liked it. However, the price was way beyond the amount he had in hand. That’s when a friend informed him about the benefits of a land loan.
Rahul is not alone. There are scores of Rahul’s in this world who are looking for land loans, as they have realised that it is not financially advisable to wait to save up enough to buy a plot as land rates go up by the minute.
If you see yourself in Rahul, there’s nothing to fret for, since land loans are easily available to help you realise your dream of constructing your very own home. Land loans should not be mistaken for home loans as they are completely different loans, though a few terms and processes are the same. Now, let’s take a sneak peek at the terms and conditions that apply to land loans.
Land loans are available only against residential plots, located within municipal or corporation limits.
The rate of interest on plot loans is much higher, as compared to home loans.
No income tax benefits are available against land loans, unlike home loans.
Each lender has a different yardstick to measure an individual’s loan eligibility.
Instant approval: If the necessary documents are furnished, and you are found to be eligible for the plot loan, then the lender sanctions the loan in no time. With the dawn of online loans, the process of applying for a land loan is even more seamless and hassle-free.
Tenure: Each loan comes with a fixed tenure of repayment, which is generally 20 years.
Security: Generally, lenders do not ask for extra security as the land against which the loan is taken in itself becomes the security and is mortgaged to the lending institution till the entire loan is repaid. However, some lenders would want additional security such as Fixed Deposit receipts or life insurance policies.
Eligibility: Check your eligibility online to understand whether you can apply for a plot loan or not. Most lending firms provide tools such as an online Eligibility Calculator to help you understand the interest rates you would be charged and the loan amounts and repayment tenures you would be eligible for, respectively. This Eligibility Calculator can prove to be very helpful as it can save you the trouble of visiting a physical office and waiting in the queue with the necessary documents to check your loan eligibility.
Co-applicant: Having a co-applicant who is also earning will add value to your land loan application as the combined income of the applicant and the co-applicant can help you avail a higher loan amount. Some lenders offer female applicants an attractive interest rate. So, having a female co-applicant would be beneficial.
Competitive interest rates: When going in for a land loan, it is advisable to compare interest rates between different loan providers.
Special offers: Customer is always the king. So, most lenders offer refinance on your existing land loan, too. You can choose to transfer your outstanding loan amount for a competitive interest rate, and also get a top-up loan with no documentation whatsoever.
In conclusion, buying a plot has never been easier in India. With real estate prices seeing an appreciation like never before, if there’s a good time to buy a plot, it is NOW. While there are numerous upsides of taking a land loan, one must be aware of the potential drawbacks too. While land loans can help you fulfil your dream of purchasing land, the process of constructing your home from scratch could be tedious and time-consuming. In addition to that, land loans may generally have high interest rate requirements and require the applicant to pledge collateral in some circumstances. In such instances, opting for a home loan can be your best bet. By opting for a home loan on Finserv MARKETS, you can avail of interest rates that are competitive, benefit from instant approval, and what’s more, be subjected to zero collateral requirements. You couldn’t have asked for more. So, NOW is the time to go in for a home loan available on Finserv MARKETS and make the most of the benefits that come with it.