Can You Get a Loan for Purchasing Plots?
If you buy a plot of land, you will not only have your own space but also the privilege of allocating it in your own unique way. You can have as many bedrooms as you want, a kitchen in a preferred location, a dedicated living room, etc. However, as we all know, buying land can be expensive, especially in large urban areas or in high demand. cities. Therefore, to fulfill your dream of owning land in a big city and building your dream home on it, you will need financing options to make the purchase.
Did you know that investing in the purchase of land is one of the most difficult decisions in your investment portfolio due to its value and increasing value? This is the reason why Indian investors tend to buy land, be it for investment purposes or to build homes.
Handy Guide to Avail a Plot Loan
If you are planning to buy a plot of land, you will have to choose a different plot loan than a mortgage loan. The home loan is aimed at purchasing a property that is already built or under construction and will be available soon.
Therefore, if you are planning to invest in a plot, then a mortgage loan will not be viable in this case. Therefore, many banks offer a different section of loans known as lot loans if you want to buy land. However, it is important to know that many lenders are not willing to lend a plot of land if you do not have plans to build on that plot of land. Also, many lenders include the cost of construction in the loan amount offered.
6.08 % to 13%
Up to 15 Cr.
10 to 30 years
Eligibility criteria for the integral loan
- You must be residing in India
- You must be at least 18 years old and not more than 65 years old.
- He must be a salaried professional or self-employed.
Things to consider when buying an integral loan
Land purchase loans are a risky proposition for lenders. Therefore, to minimize the risk of a lender and increase your chances of being approved for a parcel loan, you may consider the following factors.
Healthy Credit Score: The CIBIL score is the numerical representation of your financial condition that shows all of your credit(s)/loans/loans records and repayments. All lenders consider CIBIL to the applicant before they are granted a loan. You have maximum chances of getting your loan if you have a CIBIL score of over 750, meaning you have been regular and on time in paying off your existing loans.
Debt-to-income ratio: Lenders consider the debt-to-income ratio (DTI) before they consider getting a parcel loan. The DTI is basically calculated by adding your monthly debt and dividing the total debt by your monthly disposable income. Therefore, if your DTI is greater than 50%, you will not be considered for a partial loan or you will receive it at a very high-interest rate. Therefore, it is advisable to close some existing debt and reduce the DTI ratio before choosing a parcel loan.
Compare interest rates: Before applying for a parcel loan, you should always compare the interest rates offered by different banks. Since the loan amount will be higher, make a smart decision and choose the bank that offers the lowest interest rate for the desired amount
Consider fees and other costs: When you choose a parcel loan, you should look not only at the interest rate but also at other fees involved, such as processing fees, pre-closing fees, foreclosure fees, etc.
Prepare a budget: If you want to invest in a parcel, paying the equal installments of the loan isn’t the only thing to deal with. A large amount of money is also required for other areas such as paying municipal taxes, insurance, cost of fencing, etc. So, set a budget and don’t buy more than you can afford, because it will lead you into a debt trap.
Equity loans will help you greatly: If you think that you do not qualify for a parcel loan, you can maximize your chances of availing of the land loan by using equity loans. This reduces the risk of the lender.
If you are planning to take advantage of an integral loan, then adhering to the above suggestions will definitely help you increase your chances of getting approved for the loan. Also, many banks and non-bank financial companies such as SBI, HDFC Bank, ICICI Bank, Punjab National Bank, and LIC Housing Finance Ltd. and Bajaj Finserv, etc. Offering land loans at competitive interest rates. You can explore their website and make the right decision.