In the past few years, the price of land has seen a gradual decline. So much so that, according to Livemint, land brokers are closing deals at 20% lower than the asking price. Hence, if you are looking to invest in purchasing land, now is probably the best time to do so.
Additionally, easy availability of loan to buy land from various financial institutions in India has also made it easier for individuals to invest in properties. However, before you apply for a plot loan, make sure you keep a few tips below to avail maximum benefits from the same.
Home loan vs loan for land purchase
The first thing to know about this advance is that it is different from a home loan. Before you choose between a land purchase loan and home loan, you should learn the difference between them
A home loan can be availed solely to finance the purchase of a house that has already been constructed. Whereas, you can avail a plot loan to finance the following-
- Purchase of a resale plot
- Purchase of land through direct allotment
Tips to follow
If you are looking for an advance to fund the above two instances, these following tips can make it easier for you to avail it –
- Check your eligibility
To avail a loan to buy land, you need to comply with a few eligibility criteria set by your financial institution. The eligibility varies from one lender to the other, but it mostly includes parameters like age, whether the individual is an Indian resident and their income. Additionally, the lender also emphasises the borrower’s repayment ability to deem them eligible for the advance.
You can also easily check the amount you are qualified for by using an online eligibility calculator.
- Check the repayment liability
When you apply for land loans, you need to pay a part of a plot’s value as down payment. Hence, the higher the down payment, the lower your loan amount and vice versa.
You can avail a high loan amount of up to Rs. 3.5 Crore from various financial institutions to purchase land. So before you apply for the advance, make sure that you know the amount you need to avail for the particular land you want to purchase.
- Calculate your EMIs
An online EMI calculator is the most efficient way to calculate your repayment amount. You can get the accurate EMI amount for this advance by putting information like your loan amount, interest rate and tenure. This online tool is also beneficial if you are planning to opt for a home loan.
- Check the interest rates
In most cases, the interest rates for land purchase loans are a few basis points higher than that of home loan rates. That is why you should mandatorily check the interest rates before you apply for the advance. Also, make sure you compare the interest rates offered by various financial institutions and choose the one best suited for your needs.
- Look for additional benefits offered by financial institutions
To maximise your gain from this advance, check for additional benefits offered by various financial institutions. For instance, with a loan to buy land from Bajaj Finserv, you can avail benefits like easy disbursal facilities, balance transfer, top up loan benefits without documentation, no part-prepayment and foreclosure charges, etc.
By checking these factors, you can ensure that the process of availing a loan to buy land becomes much simpler. Also, learn the documents required during application to ensure that there are no problems in the process.