Planning to buy a land loan? Here are some important things that you must know before applying for a loan to buy a plot or land: Type of Plot: The very first thing to consider when applying for a loan for plot purchase is to know what type of plot it is. The plot can be independent or lying in a gated community. The lenders prefer funding a land in a gated community because it is more secure from the angle of encroachment. This means it will already have the basic required development done, such as developed roads, laid electrical cables, proper earmarking, the facility of sewerage and water pipes, etc. Geographic Limitation: The lenders can be specific about the location of the land. This is because they want to know the risk perspective of the land available for purchase. Since there are limited plots in the middle of the cities now, people often go for land purchase on outskirts. However, the potential risks in such areas are more compared to the land in the main towns or cities. Therefore, one must be aware of the geographical limitation of the land they’re going to purchase through a loan. Tenure:
The loan tenure is usually up to 20 years for availing land purchase loans. However, there can also be some deviation as per the borrower’s profile. Rate of Interest: The rate of interest is usually similar to that of home loans and lenders float this scheme for a specific time period. Reference Read: Points to Check before Applying for a Loan to Buy Land
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |