Home Loan Vs Land Loan

Home Loan versus Land Loan

The banking system has transformed itself a lot in recent times. It offers myriads of financial products which makes it easy for people to fulfil their desire. One of the biggest boons that the banking system has given to individuals is the provision of loans for different purposes. Buying home is the dream of every person and banks offer home loan for the same. These loans are available at attractive interest rates. Another type of loan that you can use for constructing a new home is, land loan or plot loan. The land loan or construction loan make it easy for people to buy lands or plots and construct the house.

What are plot loan, or land loan and home loan?

Home Loan- This loan is provided by the banks and NBFCs to purchase homes. Home loans can be used for buying  constructed home , project under construction or home approved for construction. Home loans are available for all the approved properties.

Plot loan for Land Purchase – As the name indicates; these loans are granted by banks for buying plots or land. This loan can be availed by all the residents of India and should be more than 21 years of age. People take plot loan for buying lands or plots as an investment for future or to construct home. This loan is available to both salaried and self-employed individuals.

Purpose of Plot Loan:

  1.    You can use this loan for direct allotments in a housing society or developer project
  2.    You can also use this loan in development authority project.

Leading Banks providing Plot/Land Loans-Plot loans, home loans– The banks have become very common and most of the banks provide this loan. Here is the list of banks and financial institutions that provide a home loan, plot Loan and land loan:

  1.    ICICI Bank
  2.    Punjab National Bank or PNB
  3.    State Bank of India
  4.    DHFL
  5.    IDBI
  6.    Axis Bank
  7.    HDFC Bank
  8.    Federal Bank etc.

The application procedure and documentation for all these banks remain the same, however, the interest rates may vary from one bank to another.

Plot loan and home loan
Home Loan vs Plot Loan

How does home loan differ from a land loan or plot loan?

When it comes to the home loan or land loans then people mostly opt for this loan when they wish to construct a house or buy a house. However, there is a line of difference between the two, home loans are available for all the approved properties irrespective of their size or location. Whereas the land loan can be used to purchase vacant plot which is:

  • Non-agricultural land
  • Residential
  • Lies in the municipal corporation limits
  • Non-commercial
  • The land is not an industrial area
  • The land is not located in the village

Banks are a bit stringent towards land loans as compare to a home loan. Banks and NBFCs only grant a land loan to the individual who has a definite plan to construct a home in the given frame of time. Once the borrowers complete the house construction then a completion certificate must be submitted to the bank. After this, the land loan can be converted into a home loan and the borrower can avail applicable tax benefits. As per the present regulation system, the land loans don’t offer tax benefits.

The NRIs or Non-Residents find it very difficult to get land loans. There are various government regulations that make land loan for NRIs a challenging affair. Even if they get the loan when it comes at a higher interest rate.

 

Parameter Land Loan Home Loan
Eligibility Criteria Resident Indian and NRIs with some conditions who are above the age of 21 All the residents of India can apply for home loan . They should be more than 21 years of age
Interest Rate 12%-14%* 8.3%-9%
Tax Benefit You can only get tax benefit if you do the construction on the land and submit completion certificate . Then the land loan gets converted into home loan and you can avail tax benefit, otherwise land loans have no tax benefit Home loan offer tax benefit to it borrowers
Tenure 10-15 years Up to 30 years
LTV Maximum limit of up to 50% to 70% of the cost of plot. Up to 90% of cost of land and construction
Pre-payment Charges In case of land loan, the pre-payment charges is 2%-4% In case of home loan, if an individual has taken home loan on floating interest rate then there is no foreclosure charges
Co-applicant Yes, there can be a co-applicant for land loan. Having a co-applicant enhances the loan amount and also reduces the burden of EMI. While applying for home loan you can have a co-applicant . Having a co-applicant enhances your loan taking capacity.

Documentation for Land Loan or Home Loan –

Whether you are buying a home loan or land loan, you need to submit the documents for the same. Here is the complete list of documents that banks would ask you to submit while applying for a loan :

  1.    Application form
  2.    Photograph of the applicant
  3.    ID proof like Aadhaar Card, Voter ID, Passport etc.
  4.    Address Proof like Utility bills, phone bills, electricity bills.
  5.    Bank statement of last six months
  6.    Form 16
  7.    The salaried individuals need to submit the bank statement of last six months showcasing salary credited
  8.    In case the borrower is self-employed individuals, then they need to submit IT returns along with sales receipt.
  9. In case of plot loan or land loan, the borrower needs to submit site ownership documents in the name of the seller. These documents include the following:
  • No Encumbrance certificate for the land
  • Revenue receipt
  • Original ownership documents
  • Land records
  • Approved plot layouts
  • Tax receipts for taxes paid by the land owner

Interest Rates- Once you have completed the formalities and have decided to take the desired loan, it is important that you must run through the interest rates offered by the banks and NBFCs. The land loan interest rates are higher than a home loan. Thus, it’s advisable to compare the interest rates before finalizing the bank.

Land Loan Interest Rates by Top lenders in India – 

Bank Name / Top Lenders in India Land Loan Interest Rates
SBI Floating – 8.30% – 8.65%
HDFC 8.45% – 8.70%Floating
ICICI 8.50% – 8.85%Floating
Axis 8.35% – 11.75%Fixed/Floating
DBS 8.5% – 8.5%Floating
CANARA BANK 8.35% – 8.55%Floating
DHFL 9% – 9.75%

Home Loan Interest Rates by Top Lenders in India – 

 

Bank or NBFC/Top Lenders in India Home Loan Interest Rates
SBI 8.65% onwards
ICICI The Home loan starts from 8.85%
HDFC
8.70% to 8.95%
BOB 8.30% – 9.35%
LIC 8.50% onwards
Axis Bank 8.35% – 11.75%
Fixed/Floating
Indiabulls Starting from 8.70%
HSBC Starting from 8.50%
DHFL 8.70% onwards
IDBI 8.35% – 8.65%
PNB 8.35%

Tenure of Home Loan Vs Plot Loan – The tenure for home loan is usually 30 years or 20 years. Also with land loan or plot loan for land purchase, the tenure is same as home loan.

Our Role: Loanyantra is a transparent medium that connects the buyers with the right financial institutions. We also help in completing the paperwork related to home loans and other types of loan, thus making the entire process hassle-free for you. For more information on different types of loan and features, connect with us today. 040-71011991.

 

HDFC Plot Loans in India for Self-employed NRIs

HDFC Plot Loans

What is HDFC Plot Loan for NRIs?

HDFC provides loans to borrowers for the purchase of a plot of land in India to build their dream homes. It is given to both self-employed and salaried people. Borrowers with a good credit score can avail better deals.

Why HDFC Plot Loans?

Loanyantra explains what are the benefits one can enjoy while you opt for HDFC plot loan in India. HDFC provides exclusive services to self-employed NRIs .

  • Loans to NRIs, PIOs and OCIs for purchase of a plot in India through direct allotment
  • Loans for purchase of a resale plot in India.
  • Loans for transferring your outstanding loan availed from another bank / Financial Institution in India
  • No hidden charges.
  • There is no pre-payment penalty
  • Offers attractive interest rates that are affordable and easier for your pocket.
  • Customized repayment options to suit your requirement.
  • Lower processing fees compared to various other lenders.
  • Expert counselling in legal and technical aspects for a seamless transaction

Features of HDFC Plot Loans

Loan Term:  The maximum limit for borrowers to distribute their payments of loan is 15 years. The term also depends on the type of scheme chosen and the customer’s profile, age of the customer at the time of loan maturity and age of the plot at the time of loan maturity are also the deciding factors of loan term.

Maximum Loan Amount

Loan Amount Maximum Funding
Up to Rs.20 lakh 90% of the property price
Rs.20.01 lakh to Rs.75 lakh 80% of the property price
Over Rs.75 lakh 75% of the property price

Note: If the property is outside city limits, the maximum funding of the loan can be restricted to 70% of the property cost.

HDFC Plot Loan Documents Required for Self-employed NRIs

These are the documents to be submitted by the applicants and co-applicants along with an application for the approval of loan:

  1. Identity and Residence: Valid Passport, Aadhaar Card, Valid Driving Licence or Voter ID Card.
  2. Proof of income: Income Tax Returns (ITR) of 3 years, Savings account statements of the individual and current account statements of the business entity of last six months or Balance sheet and Profit and Loss account statements with schedules/annexures (all documents to be attested by a CA for points 2 and 3).
  3. Property related: Allotment letter or agreement copy of buyer and Title deeds in case of a resale with previous property documents.
  4. Other documents: Latest Form 26AS, business profile, list of directors and shareholders with their individual shareholding certified by a CS/CA in case of the business entity being a company, Memorandum and Articles of Association of the company, partnership deed if a partnership firm.

Types of HDFC Plot Loans for Self-employed NRIs

  • TruFixed Home Loan – 2/3 Year Fixed Rate Variant

The TruFixed Home Loan gives a fixed rate up to 2 or 3 years, after which the loan will change to an adjustable rate loan automatically, totalling up to a total of a 15-year loan term. It provides customers a part fixed rate term and a part adjustable rate term.

  • Adjustable Rate Loan

The adjustable rate plot loan is linked to HDFC’s Retail Prime Lending Rate (RPLR). The interest rate on the loan is revised once in every three months if there is a change in the RPLR, taking the date of the first disbursement into account. A rise in the interest rate will result an increase in the EMI’s interest component which in turn will reduce the principal component. This will extend the loan term, and vice versa, in cases where the interest rate drops.

Plot Loans for Self-employed NRIs by HDFC Bank
Plot Loans for Self-employed NRIs by HDFC Bank


HDFC Plot Loan Interest Rates for Self-employed 

  • TruFixed Loan – 2 Year Fixed Rate Variant

The Retail Prime Lending Rate (RPLR) is 16.65%

Loan Slab up to Rs.75 lakh
Interest Rate (%  PA) 9.15 to 9.65%
  • Adjustable Home Rate Loan

For self-employed professionals, the Retail Prime Lending Rate stands at 16.65%

Loan Slab Interest Rates (%  PA)
For women (up to 30 lakh) 8.70 to 9.20
For others (up to 30 lakh) 8.75 to 9.25
For women (above 30 lakh) 8.80 to 9.30
For others (above 30 lakh) 8.85 to 9.35

HDFC plot loan interest rates for self-employed non-professionals

  • TruFixed Loan – 2 Year Fixed Rate Variant

For self-employed non-professionals, the Retail Prime Lending Rate stands at 16.65%

Loan Slab Interest Rates (%  PA)
For women (up to 30 lakh) 8.75 to 9.25
For others (up to 30 lakh) 8.80 to 9.30
For women (above 30 lakh) 8.75 to 9.35
For others (above 30 lakh) 8.90 to 9.40
  • Adjustable Rate Home Loan:

    The Retail Prime Lending Rate (RPLR) is 16.65%

 

Loan Slab up to Rs.75 lakh
Interest Rate (%  PA) 9.15 to 9.65%

Note: The above rates by HDFC might be revised at the time of disbursement.

HDFC Plot Loan Charges for Self-employed NRIs

Some charges and fees applied for loan approval are mentioned below:

Processing fees:

For self-employed professionals – Rs. 3,000 or up to 0.50% of the loan amount whichever is higher + other applicable taxes

For self-employed non-professionals – Rs. 4,500 or up to 1.50% of the loan amount whichever is higher + other applicable taxes

HDFC Plot Loans and Loanyantra – 

Get the best interest rates for your plot loan. We understand how important your dream is and hence, we can place ourselves in your shoes. Take the expert’s guidance and get the best-suited product and best-fit offer. Loanyantra took hundreds of customers dreams as its and fulfilled every minute one.  Know every minute detail about each offer about top lenders in India. Just a missed call can get everything to your door step. 040-71011991.