Financial institutions like Banks and Non-Banking Financial Corporations (NBFCs) provide land loans or plot purchase loans for acquiring land for either residential or commercial purposes. These loans vary in interest rates and repayment tenures, typically up to 25 years, based on the criteria set by lenders. Below are the specifics of plot loans:

Plot Loan Interest Rates 2024

Banks	Interest Rate (p.a.)
SBI Plot Loans	9.40% - 9.85%
HDFC Plot Loans	9.40% - 9.95%
Federal Bank Plot Loan	8.80% onwards
Shriram Housing Finance	Starting from 9.5%
PNB Housing Plot Loan	9.5% onwards
Karnataka Bank Plot Loan	9.30% - 11.45%
Bank of Maharashtra Plot Loan	8.35% - 10.90%

Note: The EMI is calculated assuming a loan of Rs.1 lakh for a tenure of 120 months at the lowest mentioned interest rate.

Plot Loan EMI Calculator

An EMI calculator assists in computing the monthly installment for a plot loan. Input the loan amount, tenure in months, interest rate, and processing fee, then click 'Calculate'.

What is a Plot Loan?

Plot loans, or land loans, enable the purchase of a plot of land. While home loans are for acquiring built properties, plot loans are specifically for buying land intended for construction.

Features of Plot Loans

• Loan Tenure: Normally ranges from 10 to 20 years, depending on the borrower's repayment capacity.
• Loan-to-Value (LTV) Ratio: Up to 80% of the plot's value can be financed. The final LTV ratio is dependent on the lender's credit risk evaluation.
• Tax Benefits: No tax deductions on principal and interest repayment unless a home loan is taken to construct a house on the plot.
• Balance Transfer Facility: Borrowers can transfer existing plot loans to other lenders at lower rates, subject to credit risk assessment.
• Prepayment Charges and Processing Fees: Processing fees range from 0.25% to 1.50% of the loan value. No prepayment charges apply to floating rate loans per RBI guidelines, while fixed-rate loans may incur charges.

Benefits of Taking a Plot Loan

• Used to buy residential land.
• Attractive interest rates.
• Flexible repayment tenures.
• No pre-payment penalty.
• Low processing fees.
• Minimal documentation required.
• Tax benefits under Sections 24 and 80C of the Income Tax Act.

Eligibility Criteria for Plot Loans

• Applicants must be resident Indians.
• Must be salaried or self-employed.
• Age should be 18 to 65 years.
• NRIs can only apply for housing loans.
• A credit score of 750 or higher is usually necessary.

Documents Required to Apply for Plot Loans

• Completed application form.
• Applicant's photograph.
• Age proof.
• Identity proof.
• Residence proof.
• Recent salary slips.
• Bank statement for the last 6 months.
• Form 16.
• Cheque for loan processing fee.
• Documents of land ownership.
• No Encumbrance Certificate for the plot.
• Layouts/drawings approved by the Town Planning Authority.
• Revenue and tax receipts.

How to Get Tax Exemptions from Plot Loans

• Available only after constructing a house on the plot.
• Post-construction, claim tax deductions on plot loan interest.
• Section 80C allows deduction of Rs.1.50 lakh annually on principal repayment.
• Section 24 offers tax benefits on interest after house construction completion.
• Converting a plot loan to a home loan qualifies for annual deductions of Rs.2 lakh under Section 24.
• Pre-construction interest rate deductions available.

Differences Between Plot Loan and Home Loan

Criteria Home Loan Plot Loan

Purpose: Buying an under-construction or constructed property / Buying a plot for residential purposes.

Tax Benefits: On both interest and principal payments / Only on construction costs.

Loan Repayment Tenure: Up to 30 years / Up to 15 years.

Loan-to-Value (LTV): 75% to 90% / 75% to 80%.

*[RBI]: Reserve Bank of India