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A Complete Guide to Plot Loans in India

A Plot Loan helps buy a piece of land to build a home. Usually, buying a flat by taking a Home Loan is a popular option. But if you choose to build your home, you can consider taking out a Plot Loan. Leading lenders in India offer plot or land loans to eligible individuals who want to purchase a piece of land to build a residential unit. 

This article will take a comprehensive look at various aspects of Plot Loans and Plot Loan interest rates

What Is a Plot Loan?

A Plot Loan is a secured type of loan that helps you invest in property.

The loan will be repaid over a set period with interest added to the total borrowed amount.  

Are Plot Loans and Home Loans Different?

Plot Loans are different from Home Loans. While a Home Loan is taken to purchase an already-built home or construct a house, a Plot Loan is taken to buy a piece of land. Also, Plot Loans are typically taken for a shorter tenure than Home Loans.

Plot Loan Interest Rates

While Home Loan interest rates are often discussed and compared, familiarity with a Plot Loan rate of interest is relatively low. A Plot Loan rate is comparatively lower than a Home Loan due to the amount involved. For the exact rate, compare offers from different lenders.

Importance of Plot Loans

  • Plot Loans are typically cheaper than Home Loans and more affordable for people who want to buy a piece of land.
  • They are usually disbursed faster than Home Loans, as the documentation process is less complicated and time-consuming.
  • Plot Loans offer more flexibility to the borrower, as they can be used for various purposes, like paying for registration charges, stamp duty, etc.
  • You will be eligible for tax deductions under Section 80C of the Income Tax Act, which can help lower the cost of borrowing.
  • If you buy a plot with a loan and the value of the plot increases over time, you can sell the plot and get a good return on investment.

Who Are Eligible for a Plot Loan?

  • You must be a resident of India.
  • You should have a stable income through a job or self-employment.
  • The minimum age for applying for a Plot Loan is 21 years; it should not exceed 70 at the time of loan maturity. 
  • You should have a minimum CIBIL score of 750 for the best deals.

Documents Required For Plot Loan

Below is a list of documents required.

  • Proof of identity (Aadhaar Card, Passport, PAN Card, etc.)
  • Proof of residence (Aadhaar Card, Passport, Driving License, Utility bill, etc.)
  • Proof of income (Salary slips, IT returns, Form 16, etc.)
  • Account statements for the last six months
  • Property documents of the plot to be purchased (allotment letter, receipt of payment, title deeds, etc.)
  • Any additional documents as specified by the lender

Check with your lender beforehand for a complete list of documents required.

What is the Maximum Plot Loan Amount?

The maximum amount offered by lenders can range from 70-75% of the purchase cost. You only need to cover the rest from your pockets, which makes it a flexible and smart choice for your real estate journey.


A Home Loan to buy a ready apartment or bungalow is a popular choice. However, many people wish to buy plots to build their homes. If you want to buy a piece of land and build your home on it, you can take a Plot Loan to buy the piece of land and a Home Loan to build the house.

Leading lenders offer Plot Loans at feasible rates. Apply now to begin.

Also Read: When To Refinance Your Car Loan?

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