Why a vacant land/empty plot : From an Investment Perspective, a vacant land/plot is always a safe bet, not just in the long term, but also in the short term. If you are dreaming about moving into an Independent House in some locality (be it a colony or a private layout) 5 years down the lane, then a piece of land in that locality is exactly what you need. Further, if you buy it now, you get it a far cheaper price that you would 5 years later. Even if, you don’t have any plans to construct a house of your own on your land, it is still a good investment, as Real Estate Prices continue going upwards and on a resale, you can expect handsome gains.
Now that it is clear, one should own a piece of land, how do we go about financing it ?? What if you need to purchase a land for constructing your sweet home ?? Not just independent home, one can also purchase it for investment purposes. There are number of public and private sector banks and other non-banking financial institutions who give loans for land that is Plot Loan. This blog post lists out all relevant documents and the process involved in applying for a plot loan.
Eligibility Criteria:
- You should have completed 21 years of age
- You should have a regular income either through your job or a business, which can be validated by banks on the basis of Income Taxes or Revenues.
- Maximum 80-85% of the cost of the plot, depending on which banking/financial organization, you chose for your loan
- May vary depending on the loan eligibility of the customer
Loan Tenure: It varies from bank to bank but in most of the cases, it is 10 to 15 years. However, some banks, especially the private ones, do allow the tenure to be less than or equal to 5 years, but here again, your tenure is dictated by your current income. Most of the financial institutions are somewhat reluctant in granting a loan-tenure < 10 years, so you may want to check this out with bank officials.
Process for plot loan: At first you have to fill an application form with passport size photo for applying the loan in related bank and submit it with proper documents. Bank will charge you 1-2% as processing fees.
Documents required by bank for land loan:
1. Documents related to customer:
- Two passport-size photos , PAN Card, Passport, Employee Id (if you are a salaried individual), visiting card
- Residential Address Proof : Ration Card, Telephone Bills (Land line, some banks only accept bills of government-run telecom operators’, like BSNL, MTNL etc), Mobile Bill (Postpaid) or letter from employer, confirming your residence address.
- Last 4 months payslips along with latest CTC (Cost To Company)
- Appointment letter, relieving letter/experience letter(if your present employment is less then 3 years).
- Form 16 for last 2 years along with acknowledgement from IT .
- Bank Statement of all account for 6 months).
- One cheque from salary account for processing fees.
- Qualification proof.
2.Documents related to plot:
- Mutation Register Extract
- Sale Deed
- Encumbrance certificate
- Document/Title deed in the name of the vendor/buyer
- NOC from the State Pollution Control Board
- Endorsement from the office of the competent authority confirming that the land is free from tenancy claims.
- Tax receipts for taxes paid by the owner of the plot of land.
- Layout plan, if it is a private layout
- Land record for the plot of land
Related Articles
- The Complete Home Loan Process (consultingniketan.wordpress.com)
- List of Documents – Loan Against Property: (shivaconsultancy.wordpress.com)
Ritu's Corner 