Frequently Asked Questions
Yes, many banks offer a combined “Plot + Construction” loan product where you get a loan for the plot first, and then the remaining amount is disbursed for construction after a certain period.
While not strictly mandatory to be within municipal limits for all banks, the plot must typically be located in an approved residential area and have clear title. Eligibility might be easier for plots within municipal or development authority limits.
Given the lower LTV ratios (e.g., 60-75%), the minimum down payment for a plot loan is typically 25-40% of the plot’s value.
Owning other properties can positively impact your eligibility if they contribute to your overall net worth. However, any existing loans on those properties will add to your FOIR and reduce your borrowing capacity.
Interest paid on a plot loan itself does not offer tax benefits. Tax benefits on interest and principal repayment become available only once construction is completed on the plot and the property is ready for possession/occupancy.
Banks typically have specific approved locations and areas where they offer plot loans. It’s best to check with the bank if the specific location of your desired plot is eligible for financing.
The approval time for a plot loan can vary, often taking 2-4 weeks or more, depending on the completeness of documentation, the complexity of property title verification, and the bank’s processing time.
