- The maximum Loan to Value (LTV) when it comes to plot loans is stipulated at 70 percent. For home loans, the LTV can go up to 90 percent in some cases.
- Non-Resident Indians (NRIs) are not offered plot loans by most banks operating in the country
- Compared to home loans, the repayment tenure for land loans is lower.
- Can plot loan be converted to home loan?
Plot loans are approved only for the purchase of a residential plot of land and if the borrower has definite plans of building a house on the plot of land. Banks usually have a timeframe within which the residential property has to be completed on the purchased land. However, once the house has been completed, the completion or occupancy certificate can then be submitted to the bank after which the plot loan will be converted into a regular home loan. This gives the borrower the freedom to apply for tax benefits on the home loan as plot loans do not qualify for any tax deductions.
- How can I get a land loan with bad credit?
A good credit score is essential to get quick and hassle-free approvals for land loans. However, if you have bad credit, you can still hope to get a land loan sanctioned from a bank by taking a joint home loan with a spouse as your co-applicant, providing your spouse has a high credit score and a regular source of income. You can also approach the bank for a loan after improving your credit score, which can be done by clearing your past debts. You can also approach a bank with which you have an existing relationship or fixed deposits or other investments.
- Are NRIs eligible for plot loans?
Yes, Non-Resident Indians are eligible for plot loans from banks in India. However, the plot loan can only be used to buy a plot of land for residential use and cannot be used for any other purpose.