Last updated on July 22, 2019
For many people, owning a dream home is one of the biggest achievements in life. But, a majority of people don’t like the idea of moving into a home designed by a builder.
They want to switch to a new home designed as per their needs and budget. For the same, they avail the facility of land loans as the price of the plot is expensive.
However, before applying for a loan for land purchase, you must consider some factors. Read on to know more!
- Type of Land That You Wish to Buy
It is one of the most vital factors to consider which may determine the kind of land that you wish to buy. As a result, you should know if you want it for your residence, an industrial plot or an agriculture one before applying. Land loans are usually available only for land that is to be used for residential purposes.
- Location
Another factor to consider is the geographical limitations of the loan for land purchases. A land loan will only assist you in buying plots located within a corporation or municipality. As a result, you won’t get to buy in areas located in other villages or on city borders.
- Tenor
While home loans’ tenor can go up to 20 years, you can avail a land loan with a bit smaller or equal to tenor of your home loan. It may depend as per the lenders that you apply with. Hence, you should consider a tenor after taking into account your repayment capacity.
- The Purpose of Purchase
Before you can buy a piece of land, you should be aware of the use that you are going to put it to. Hence, be clear if you want to construct your home, a residential complex, or keep it for investment for resale in the future. You should know that construction on a purchased land piece of land involves a lower rate of interest. It is because the lenders get to enjoy a sense of security.
- The Risk of a Loan Provider
Before sanctioning any loan, a lender considers multiple factors to determine the risk potential of a loan application. Such factors may include the purpose of the land purchase, construction timeline, and existing debts. Having a shorter timeline for construction is good for the lenders as it cuts the risks.
Some of the factors that you should consider before applying for land loans are discussed. If you are ready, then you may use an eligibility calculator available on a lender’s website to know about an amount that you will be eligible to grab beforehand.
Land Loans’ Key Benefits at a Glance
- Quick Approvals
You won’t need to wait for ages for your loan for land purchase application to be processed and approved. Many lenders may approve the loan application within 5 minutes after its submission.
- Disbursals Within 72 Hours
Once you have seized the approval for land loans, reputed lenders won’t take much time to credit the desired loan money into your bank account. You may get the loan amount disbursed into your bank account within 72 hours.
- Online Loan Account Access
You can check the status and progress of your loan for land purchase account right from anywhere. Lending agencies let you use their digital customer portals to check loan details like payment schedule, interest certificate, EMIs paid and due, and more. As a result, you can track your loan account 24/7.
Constructing your own home as per your preferences is one of the best things to do, and availing a land loan can help you achieve it super easy. You can start applying for the loan for land purchase online these days.
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