Every person wants to acquire a piece of land. However, there are many hurdles in obtaining a land and getting a loan for land. Building a new house or a property can be appealing but there are few factors to consider before buying land or getting a land loan for it:
- Fundamentals of land
The first step is to properly plan on what the potential purchase entails. It is important for every buyer to get its boundaries marked by the people who do a survey and to have everything on paper ready as a blueprint of your plan. The other thing to keep in mind is to know about the various laws of land made by the government and to know about various land restrictions. Before buying the land or getting a loan for it, make sure about factors such as water, sewer, electricity, transport, cable connection, public road access etc. Your property’s value might increase if you have a new park down the street with a new highway and a new sewage treatment plant.
- Use of the land
Another important aspect to keep in mind is the use of land. You should first be clear about the use of the land. The use of land has an effect on factors such as the term of the loan, down payment and interest rate. These factors have a direct link with the risk exposure of the bank. This makes getting bank loan more complicated than buying an existing house.
- Selecting a loan option
If you have planned to get a loan for land, then you also have to think about the loan options. There are numerous options for getting a land loan. If the market is cool and the seller is able to unload the land, then you must go with seller financing. Another option is to get a loan from local banks and credit unions. Usually, they offer better terms as they have market knowledge about the property. If you have an existing property and little debt you may go for a home equity loan. Home equity loans provide you with better terms.
COMPARING VARIOUS LOAN OPTIONS:
HDFC LAND LOAN
- The loan is provided for the purchase of a plot through direct allotment.
- The loan is for purchasing a resale plot.
- The loan is given for transferring your outstanding loan availed from another bank or financial institution.
- No hidden charges are taken by the bank.
- Expert counseling is also available for legal and technical purposes.
- Easy repayment options to suit your needs.
- Attractive and affordable interest rate is charged.
- Any person can apply individually or jointly for the land loans. One thing to be kept in mind is that it is not necessary for all the co-applicants to be co-owners. They can be members of the same family also.
- Tenure of the loan can be spread up to the period of 15 years.
- The tenure of the plot loan depends on various factors such as customer’s profile, age, repayment scheme, the age of property at maturity etc.
- There are various types of plot loans provided by HDFC bank and those include
Adjustable rate loan
Fixed home loan
- Documents required for getting the loan approval includes:
Valid passport, Aadhaar card, Voter ID card, driving license for proof of identity and residence.
Last 3 months’ salary receipts, latest IT return, last 6 months Bank’s statement showing all debit and credit for proof of income.
Other documents such as passport size photograph, employment contract, contribution proof and a cheque for processing fees.
SBI LAND LOANS
- Under personal financing for plot loans, SBI offers up to RS 10Crores.
- SBI has flexible repayment tenure by which customers can avail up to 15 years. But for agricultural plot loans, the repayment period goes up to 9 to 10 years.
- Loan extension is also available for customers who have obtained a plot loan can further take a loan for various improvement purposes.
Who can take a loan?
- Landless agricultural workers are eligible for SBI plot loans.
- Marginal and small farmers.
- Customer’s having a good record of repayment of the loan within 2 years.
- Various borrowers who have good repayment record in other banks too.
- Applicant’s residing in India.
- The applicant having a stable income and job.
- For identity proof various documents such as valid passport, Aadhaar card, driving license and voter ID card.
- For income proof, various documents such as PAN card, salary receipts, IT return and bank statement.
- Property related documents like agreement, deed, a copy of allotment letter and title deeds.
- Other documents like passport size photo, employer’s document, and contribution proof.
DHFL LAND LOAN
- The tenure of the loan ranges from 1 to 20 years. Beyond the retirement age of 60 years, the term doesn’t extend.
- Getting a loan with a tenure of 20 years helps you to reduce EMI amount on your loan.
- The interest rate is flexible which fluctuates from time to time based on market conditions.
- You have easy repayment options.
- A Loan can be applied for an individual or group jointly. Further enhancement of the loan amount is possible by including an earning co-applicant. Co-applicant can be members of the same family also.