I’m planning to purchase a plot to build a house in the future. Just wanted to check is it possible to take a home loan for buying land, or do I need a different kind of loan for that?
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No, you cannot use home loan to buy land. Home loans are for buying or constructing a house, not for purchasing a plot alone. So to buy a plot you should you can for plot loan!
Here is how plot loan works-
- Plot loans are offered by most banks but only for residential plots, not for agricultural or commercial land.
- The land must be within municipal or development authority limits.
- Loan-to-value (LTV) is usually lower — banks finance 60% to 80% of the plot’s value.
- Interest rates may be slightly higher than regular home loans.