Plot Loans are a type of loan that financial institutions, also known as “lenders,” like banks and Housing Finance Companies, give to people to buy a home or land.
A plot loan is comparable to a home loan; the difference is in how the money is used.
A regular home loan can be used to purchase a ready-made housing unit such as a flat, bungalow, villa, row house, etc.; in contrast, a plot loan can only be used to purchase a residential plot of land.
Over a period of 10 to 30 years, this loan must be repaid through equated monthly installments (EMI).
It is approved by the lender following a careful examination of the applicant’s capacity to repay as well as specific technical and financial facets of the plot being purchased.
Various Lenders That Provide Plot Loans
Along with some non-banking institutions like HFC, banks are typically the primary lenders of plot loans in India.
An HFC is a type of specialized non-banking finance company that primarily deals in home loans, plot/land loans, loans secured by property (mortgage loans), etc.
Other banking services like deposits, fund transfers, payroll services, etc. are not handled by an HFC.
All banks are governed by the Reserve Bank of India (RBI), while HFCs are governed by the National Housing Bank (NHB).
Top Indian Banks for Plot Loans
The interest rate is an important consideration when selecting the Plot Loan provider because it affects the EMI payment amount.
The maximum loan amount eligible, the maximum tenure permitted, the processing fees and other pertinent charges, etc., are additional crucial factors.
The interest rates are essentially the same across all banks because they all adhere to Reserve Bank of India (RBI) guidelines and offer plot/land loans based on the Marginal Cost of Funds, which is determined by the Lending Rate.
But because Plot Loans typically have higher interest rates (than other loans) and longer repayment terms, even a 0.1% difference in the interest rate has a big impact on EMI.
As a result, the total interest paid over a lengthy 20-year period would be substantial. The interest rates vary depending on the loan amount slab, as set by each bank.
HFCs generally charge higher interest rates than banks.
Based on the affordability of their plot loans for applicants who are salaried and self-employed, we have compiled a list of the top lenders offering plot/land loans in India.
SBI, the State Bank of India:
The biggest bank in India is the State Bank of India. It is a public sector bank with more than 24,000 locations worldwide and in India.
One of the largest private banks in India is ICICI Bank. It is one of the biggest banks in India and has more than 5,000 branches across 17 different nations.
One of India’s top commercial banks is HDFC Bank. It is the second-largest bank in India and employs more than 5,300 branch locations.
BoB – Bank of Baroda:
After merging with Dena Bank and Vijaya Bank in 2019, Bank of Baroda is now the third-largest public sector bank in India. It is a significant international commercial bank with nearly 10,000 branches across the globe.
Housing Finance by LIC:
The largest insurance company in India, Life Insurance Corporation (LIC) of India, is the parent company of LIC Housing Finance. With a vast network of more than 300 offices, the company operates outside of India in Kuwait and the United Arab Emirates (UAE).
We are confident that you have already decided to purchase a plot of land and build your dream home in light of these unbeatable interest rates.
For more information on Housing Loans, EMI calculations, repayment, and other aspects of a home/plot loan, visit Estate Agents For Commercial Spaces in Panchkula.