For people looking for a flexible and multi-faceted investment option, buying a plot is a good option. Often an appreciating asset, you can construct a house when you have the required funds. What more – you can uniquely design the home according to your taste. Also, the investment amount required for a land is low when compared to a ready to use property. With many banks offering loans exclusively for the purchase of land, you need not be worried about the finances if you are contemplating on purchasing a land. Indian banks offer plot loans and loans for land under the home loan portfolio to various classes of people including agriculturists, self-employed applicants, salaried people, NRIs and SMEs.
Plot loan borrowers must make sure that they are informed about the prevailing interest rates before they avail a plot loan. Also, they must know if the type of interest is fixed or floating. As interest rates have a profound effect on the EMI, it is important that you know about the interest rates for your loan tenure and quantum. It is also advisable that you use an online EMI calculator to calculate your financial affordability and repayment schedule before applying for a plot loan.
Plot Loans Interest Rate:
The interest rates for plot loans vary from 9.95% to 12.00% depending on if the applicant is self-employed or salaried.
The interest rate for plot loans are normally offered as floating rates and vary depending on the type of scheme, nature and source of applicant’s income and employment type. The interest rate is also affected by the tenure of the loan, loan quantum, age of the applicant and loan scheme.
Do enquire with the bank about the interest rate for plot loans before applying for a loan.
Eligibility for Plot Loans:
The eligibility criteria for plot loans depends on the applicant’s nature of employment and type of income.
- The applicant must be a resident Indian and must be over 21 years of age. Non Resident Indians (NRIs) and Person of Indian Origin (PIO) must accordingly satisfy the requirement criteria.
- Salaried applicants must satisfy the income criteria, they must be earning at least the income specified by the bank as minimum requirement.
- Self-employed applicants must have been in the business for a period specified by the bank.
Do contact your bank for more information on eligibility criteria for plot loans.
Documentation Required for Plot Loans:
The following documents will be required for plot loans.
- Duly filled application form, signed by both the applicant and co-applicants
- Identity Proof – Aadhaar card, valid passport, valid driving licence or voter ID card
- Income Proof – PAN card, latest salary slips, latest IT returns, bank statements for the last 6 months and Form 16
- Other documents like photographs for applicants and co-applicants and own contribution proof.
- Property related documents like title deeds, allotment letter, and buyer’s agreement as applicable.
A loan is a huge financial responsibility. Hence, you must ensure that you have a first-hand information of plot loan interest rate, eligibility, documents required and other fees and charges when planning to apply for a loan. This will ensure that your loan application process is smooth and that you don’t face any hassles in future.
