Plot Loan for Land Purchase - Eligibility, Interest Rates & EMI [Hindi] - YouTube

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Namaskar, my name is Mukul, and welcome to Asset Yogi.

Where we unlock the knowledge of finance.

In this video, we'll see how do we get a loan for a plot or land

What is the eligibility, what is the documentation, what are the features, how much is the interest rate?

If we compare a plot loan with a home loan,

Then the home loan is easily available but for plots,

There are some preconditions from banks because it is considered risky.

We will also talk about agricultural land,

How to borrow loan for residential, commercial, or industrial plots

And what are the preconditions of banks?

With that, I'll give some tips

So please stay tuned with this video till the end

Let's switch to the blackboard.

So let's understand for which type of land, you get loan easily

And in which type of land, you may face the problem

If we compare it with a home loan, it is considered a riskier loan and its interest rates are also high.

Restrictions and conditions are also more

So if we talk about agricultural land, most of the private banks do not give loan

And if some PSU banks give, then there are some preconditions that they only give it to small farmers

Like some small and marginal farmers or landless laborers without land

If they want to buy agricultural land, then because of the government,

some PSU banks help those people and not much amount is sanctioned.

What is the definition of small and marginal farmers and what is the range?

We'll see this in detail.

Now let's talk about Non-agricultural land.

Residential, commercial, and industrial landfalls in this

So if we talk about Non-agricultural land, you get a loan easily, and in this,

You get the easiest loan for residential plots

Most banks have this condition that the plot should be within municipal/city limits or urban areas.

Some banks even sanction for outside city limits as well but that's a bit difficult

If outside city limits, then the layout should be approved in non-agricultural land.

If the plots are allotted by any Development authority, Industrial authority,

Any private and reputed developer, or any resale plots

For these types of plots, you get loans easily.

A construction loan is easier than a plot loan.

If you already bought a plot, then you'll get a construction loan easily

But getting a plot loan is not easy outside city limits.

If you want a plot plus construction loan whether within or outside city limits,

It is sanctioned easily.

And as I told you before, only a plot loan is tough outside city limits.

If we talk about plot plus construction loan for residential plots,

In this case, maximum banks insist you to complete the construction within 2 years.

So these were the important conditions that banks impose on agricultural and non-agricultural lands.

Now let's see some more important features of plot loans.

Firstly, it is a secured loan.

As I discussed in home loan and loan against property,

That if someone defaults, then the bank can take over the property

and can auction it to recover the loan dues.

If your plot is in joint ownership means if your husband or wife is in that ownership

Then both should be the Co-applicants for the loan.

The maximum tenure which banks give for plot loans is 15 years

Whereas, it's up to 30 years in the case of a home loan.

And some banks even give maximum tenure of 20 years.

If we compare interest rates, then in the case of residential plots, it's 1.5% more than home loans

Because it is considered riskier in comparison with a home loan.

This was in the case of residential plots but if we talk about commercial or industrial plots,

It can even ho 2-2.5% more.

Now, how does the Disbursement happen?

If you buy a developed resale plot from anyone,

then payment is done directly to the seller at the time of disbursement.

If you're buying an underdeveloped plot from a development authority or builder,

Then as the development will progress, the bank will pay directly to the authority or builder.

And the loan amount is disbursed only after the buyer's contribution.

Let's say you bought a plot worth Rs. 1 crore.

And if Rs. 30 lakhs is your contribution then first you need to pay that

And after that bank will disburse Rs. 70 lakhs loan.

So these were the important features of land if you take a loan.

Now let's talk about eligibility.

If we again talk about agricultural land, as I told you before,

PSU's give loan to small and marginal farmers.

What is the definition of small and marginal farmers and conditions?

I am talking about SBI, the farmers who have less than 2 acres of irrigated land are marginal or small farmers.

And if the land is Unirrigated, then it should be less than 5 acres.

2nd condition for agricultural land is a good track record

And loan repayment history of last 2 years should be good

And if the farmer has defaulted loan in the past, it would be difficult to get a loan.

Now let's talk about the eligibility of Non-agricultural land

Firstly, your repayment capacity is checked.

Your annual income and what are the other loans

I already explained in many videos that let's say your monthly income is Rs. 60,000

Then the maximum EMI you can pay every month is Rs. 30,000 according to the bank.

Let's say Rs. 15,000 is your existing going on EMI

Then the balance EMI which you can pay is considered Rs. 15,000

And with this, your loan eligibility will be calculated.

So if we talk about this case, if you get a loan for 20 years

Then around Rs. 20 lakhs is your loan eligibility.

There are some other conditions apart from income and ongoing loans.

Bank will do the technical and legal due diligence of the property,

Will check that background and evaluate the valuation of the property

And professional third-party valuers generally evaluate this value.

Bank will not believe on the value which you will tell and they will assess the market value

After that they will check whether the title is clear or not,

any loans are there or not, or any tax dues

You get a maximum loan of 70% of the property value.

For plots, it's allowed till 70% but in the home loans, it goes up to 90%.

So for example, let's say property value is Rs. 1 crore,

then you'll get a maximum loan of Rs. 70 lakhs.

But if you'll borrow a loan for plot plus construction and we're talking about residential

Then you can get a loan up to 90% and it will be considered as a home loan

and the rates are also the same as a home loan.

The customer profile is checked that whether you're salaried, self-employed, or business owner

If there are ups and downs in your income and occupation

then there may be some problems in your loan sanctioning.

But if you're salaried and you have a fixed income, then you can get a loan easily

Your maximum age is checked which is considered 60 years for salaried person

and 65 years in case of self-employed and business owners

Then your credit score is checked.

I've already discussed in many videos that your CIBIL score should be 750+

If your score is less, then try to bring it above Rs. 750 so that you easily get a loan.

Your assets and liabilities are checked and your net worth

Let's say your liabilities or loans are very much and your assets are less,

Then also, you may face problems in getting a loan.

The number of dependents is checked which means

if your income is Rs. 60,000 and your expenses are high let's say Rs. 50,000

Then you can't get much loan and Rs. 10,000 will be considered as disposable income

So your loan eligibility will also be calculated according to that.

The pattern of expenses is also checked, your saving habits, all the bank statements

We'll talk about the documents that types of documents should you present.

So this was all about eligibility.

Now let's see what are the additional charges applied.

You have to pay the processing fees which is generally 0.25-1% of the loan amount

So if you took a loan of Rs. 70 lakhs, and if I consider the processing fees to be 0.25%

Then it comes out Rs. 17-18 thousand.

So this much is generally charged.

Then some banks separately charge for background checks for Legal and Technical due diligence

So you should ask about these charges.

So generally banks charge Rs. 5-10 thousand,

and you can negotiate with them and say that you just want to pay the processing fees

and don't want to pay separately for this

Then banks generally agree to this.

Now let's talk about prepayment and Foreclosure charges.

If you got some extra money and you want to prepay to reduce the principal amount,

Then that is also allowed and if you selected Floating interest rate,

Then generally prepayment charges are not applicable

In the case of fixed interest, prepayment charges may be applicable.

In this, if you bought a Non-Residential plot, then charges are applicable

And it is generally 2-3% of the outstanding loans.

Besides this, 18% GST is applicable on all the financial charges.

So these were the additional charges which you should know

and you shouldn't get surprised after knowing this

Besides this, let's see what are the required documents

If you're a salaried class, your application, identity, address proof,

age proof, pan card Adhaar card, passport copy, etc.

You have to submit the last 6 months bank statement,

Generally, all these documents are common for all loans

But then also let me run through all of these,

3 months salary slip if you're salaried class

but if you're self-employed or businessman, then it is not applicable

Processing fee cheque, Latest form 16 and income tax returns, original title documents of the property

If you're Self-employed like CA, Architect, or Lawyer

Then last 3 years income tax returns are required whereas, in salaried class, only 1 year is required.

With that, the last 3 years CA certified audited balance sheet

and profit and loss account statement are required in both cases.

If you're professional, then an Education qualification certificate is required, and if you're a businessman,

Then last 3 years business existence proof is required

and you've to give a whole profile of your business.

So these are the documents required generally.

There may be any additional document asked by any bank but generally, banks work on these guidelines.

Lastly, let me share some tips with you which I already shared in previous videos

Whenever you go for a loan, compare the interest rates

Nowadays, you can compare it online on many websites and go with the lowest interest rates.

2nd important tip is, if you want to increase your loan eligibility,

then you can add the income of your spouse and make them Co-applicants

Even if it is not in joint ownership, then also you can make them Co-applicants and increase loan eligibility.

So I think I covered all the major points that how should you borrow a loan for any plot or land

I hope you'll get help while borrowing a loan for a plot.

I tried to cover all the major points in this video.

But if you want to add anything then you can comment down below

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