Loan Tips/ If you need money to buy land , then you can choose the option of Land Loan; Know the details
Some people take land and build a house, while some buy ready-made flats or houses. If you also have such a plan and you want to take a loan, then first decide whether you want to take a loan to buy a house or take land to build a house. Keep in mind that home loan and land loan are different. While we will tell you the important things about land loans, we will also inform you about the difference between home loans and land loans. If you are planning to take a land loan, this information will be very useful for you.
Who can avail Land Loan?
Everyone living in India can take home loan and land loan.
NRI can get home loan but they cannot get land loan.
Only residents residing in India can avail land loan.
Tax deduction claim
A tax deduction can be claimed under Section 80C of the Income Tax Act on the principal repayment of the home loan and under Section 24B on the interest payment.
No such tax benefit is available on land loan.
What kind of property can be found
Home loan lending rules are flexible.
Land loans are available only for specific types of land.
Lenders generally prefer to fund the lands allotted by the Development Authority.
Land use states
Land use status is important in getting land loan.
Lenders prefer loans for residential land.
Land loan is not available for purchase of agricultural or commercial land.
Some special loans can be availed to buy agricultural land but these loans are not easily available.
These loans are only for certain borrowers like marginal farmers or landless labourers.
Home loans can also be taken for property outside the municipal area.
Land loans are generally not available on land located in villages or industrial areas. It should be located within the corporation or municipal limits and the land should also be clearly demarcated.
What is the maximum land loan that can be availed?
In case of home loan, the loan can be availed up to 90% of the property value.
Loan amount is less for land loan. Loans can be up to 70%-75% of the property value where the funds are only for land purchase.
If the loan applicant gets a land purchase and construction loan, more loans are available.
It would be better if the applicant arranges at least 30% or more for downpayment.
Interest rate
Home loan interest rates are very low.
Land loans are available at higher rates.
How long can the loan be repaid?
In case of home loan, the loan repayment tenure can go up to 30 years.
Maximum loan repayment period in land loan can be 15 years.