In short: many banks and housing finance companies give plot loans for residential NA plots in approved layouts, and composite loans that cover the plot and later the construction of a house. Lenders fund a part of the plot's value, carry out their own legal and technical checks, and generally don't give plot loans for agricultural land. Commercial plots are usually financed differently.
Types of loan
- Plot loan (land purchase loan): pays for buying a residential plot. Some lenders require construction to start within a set period.
- Composite loan: one loan that pays for the plot first and the house construction in stages later.
- Commercial plots: plots like those at Business Square are usually financed through business loans or a loan against property, not a housing plot loan. Ask your bank which product fits.
What makes a plot loan-eligible
- The land has residential NA permission (or qualifies as deemed NA), and the plot is in an approved layout.
- The title is clear and marketable, as checked by the lender's own advocate.
- The plot has proper access, and its boundaries match the layout.
- The location is within the areas the lender covers. Policies vary by lender, so ask before you book.
Documents lenders usually ask for
- KYC, income proof and bank statements of the borrower(s)
- Allotment letter or agreement for sale with the developer
- 7/12 extract, 8A extract and mutation entries
- NA order or deemed-NA record, and the approved layout plan
- Title search report and chain of title documents
- Receipts for payments already made, and the developer's NOC where the lender needs one
Jagdamba shares its project documents so your lender's legal and technical teams can check them. That review is also a useful second opinion on the land.
Plot loans vs home loans
| Plot loan | Home loan | |
|---|---|---|
| What it pays for | Buying a residential plot | Buying or building a house |
| Share of value funded | Usually lower. Expect a larger down payment. | Usually higher |
| Tenure | Often shorter | Often longer |
| Tax treatment | Different until a house is built. Check with a CA. | Deductions available under the Income Tax Act, subject to conditions |
Rates, the share of value funded and tenures change often and differ between lenders. Compare offers from two or three lenders before you book the plot.
Steps from booking to disbursement
- Pick your plot, and get in-principle approval from your lender for your budget.
- Collect the project documents and give them to the lender for legal and technical checks.
- Pay the booking amount. Keep it within the RERA limit if the project is registered.
- Sign and register the agreement or sale deed as the lender requires.
- The lender disburses the loan to the seller, usually directly.