Most people believe banks only provide home loans for constructing or purchasing a house, but they also offer plot loans for buying residential land. Different banks have varying plot loan interest rates, and only individuals aged 18 to 65 can apply for them.
What is a Plot Loan?
A plot loan (also known as a land loan) is a type of financing that helps individuals and businesses purchase land for residential or commercial purposes. Unlike a home loan, which is used for buying or constructing a house, a plot loan is specifically for purchasing land, with the option to build a house in the future.
Plot Loan Interest Rates (March 2025)
| Bank | Interest Rate |
|---|---|
| SBI | 9.50% |
| HDFC Bank | 8.75% |
| Federal Bank | 8.80% |
| Shriram Housing Finance | Starting from 9.50% |
| PNB Housing | 9.50% |
| Karnataka Bank | 9.30% |
| Bank of Maharashtra | 8.35% |
| LIC Housing Finance | Contact Bank |
| IDFC First Bank | 8.85% |
| Bank of Baroda | Contact Bank |
| ICICI Bank | 9.00% |
| Union Bank of India | Contact Bank |
| Kotak Mahindra Bank | 8.75% |
(Source: bankbazaar.com)
Key Features of Plot Loans
✅ Loan Tenure – Banks offer 10 to 20 years to repay the loan, depending on income and repayment capacity. Monthly EMIs must be paid.
✅ Balance Transfer Facility – Borrowers can transfer their existing plot loan to another lender offering a lower interest rate.
✅ Processing Fees & Prepayment Charges – Processing fees range from 0.25% to 1.50% of the loan amount. RBI has restricted prepayment charges on floating rate loans but allows them for fixed-rate loans.
Eligibility Criteria for Plot Loan
✔ Indian Citizenship is mandatory.
✔ Age Limit: 18 to 65 years.
✔ Minimum Income: Banks check income stability before approval.
✔ Credit Score: A CIBIL score of 750 or above is required.
Required Documents for Plot Loan Application
📌 Duly filled loan application form
📌 Passport-size photos
📌 Age proof (Aadhaar, PAN, Passport)
📌 Identity proof (Aadhaar, PAN, Voter ID)
📌 Residential proof (Utility bill, Rent agreement)
📌 Latest salary slip
📌 Last 6 months' bank statement
📌 Form 16 (for salaried individuals)
📌 Processing fee cheque
📌 Land-related documents (Revenue receipt, Land records, Approved layout)
Conclusion: Should You Take a Plot Loan?
If you are planning to buy land for future home construction, a plot loan is a good option. However, compare interest rates, processing fees, and tenure before choosing a lender. Ensure you have a good credit score and stable income to get the best loan terms. 🚀
