Just like you get a home loan to buy a house, now it has become easy to buy land as well! You can easily buy your plot through a Land Purchase Loan. In this, you get the facility to pay money in installments. However, like other loans, interest has to be paid on this as well. If you are also dreaming of buying land, then this article is for you. We will tell you how much interest will have to be paid to buy land, what is the eligibility for it and what documents you have to submit.

Slightly more expensive deal than a home loan

Taking a loan to buy land can prove to be a little more expensive than a home loan. There are many similarities between a home loan and a land purchase loan, but you may have to pay more interest on taking a loan to buy land. According to the information received about this, on taking a land purchase loan, you may have to pay interest ranging from 8.6 percent to 17 percent annually. This interest rate depends on your credit history, loan amount, and bank policies.

Along with this, its tenure is also shorter than that of a home loan. The tenure of a land purchase loan usually ranges from 5 years to 20 years. Therefore, you may have to pay more installments in a shorter period than a home loan.

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Eligibility for Land Purchase Loan

The eligibility criteria for a land purchase loan are the same as that of a home loan. If you are taking a loan to buy land, then your age should be at least 21 years. At the same time, the maximum age should not exceed 65 years. Along with this, some documents are also required to take a land purchase loan.

The applicant must have a stable source of income, that is, they should be either employed or self-employed. Apart from this, the monthly income of the applicant should not be less than ₹ 10,000. However, different banks may have different rules for this. If you are self-employed, your annual income should be ₹ 2 lakh. To take any type of loan, it is also important to have a good credit score. A good credit score helps you get better interest rates and loan terms.

These documents will be necessary

  • While applying for a land purchase loan, you will have to submit the following documents:
  • Aadhar card, identity card PAN card etc.
  • Ration card, electricity or water bill, lease agreement, etc.
  • Bank statement of last 6 months (for both salaried and self-employed).
  • Latest Income Tax Assessment (IT Assessment).
  • Tax receipt of your land, title deed, and other documents sought by the bank.

What is a land purchase loan

In this era of inflation, we often have to take a loan to buy our favourite things or goods. Through a loan, you can buy any goods in installments, although you have to pay interest on it. Often we know about home loans, personal loans, education loans, etc. Similarly, a loan can also be taken from a bank or financial institution to purchase land, which is called a land purchase loan. It has a higher interest rate than a home loan, but it is an excellent option for those who want to buy their plot and cannot afford to pay a large lump sum amount.

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