Loan for Plot Purchase

Plots are a sensible investment and aid in the construction of our dream home. Plot loans help borrowers in fulfilling their dreams of a comfortable life by offering unique features and benefits to suit their needs. 

In this article, we will discuss what is a plot loan, its features, and how a borrower can avail benefits of a plot loan.

What Is Plot Loan?

A plot loan is a loan applicants avail from a bank, or any lender for the primary purpose of purchasing a piece of land or plot as an investment or to construct a home. 

Several reputed banks and other financial institutions offer a loan to buy land to borrowers with unique features to facilitate their purchase. 

What Is The Eligibility Criteria For Plot Loans?

The following are the eligibility criteria for a plot loan.


18-70 years


Resident of India

Employment Salaried or Self-employed
Income Regular source of income
CIBIL Score 750 and above

Please note, the eligibility criteria are unique to each lender and change according to their terms. 

What Are The Required Documents For Plot Loan?

Borrowers must submit the following documents to avail of a plot loan.

Proof Of Identity

  • Pan card
  • Aadhaar Card
  • Voter ID
  • Passport
  • Driving License

Address Proof

  • Utility Bills(Electricity Bill, Telephone Bill)
  • Aadhaar Card
  • Rent Agreement
  • Ration Card
  • Voter ID, and more
Income Proof


  • Salary slips for the past 2 months
  • Bank account statements for the last 3 months
  • Employee ID 
  • Form 16 of the past 2 years


  • Bank account statement for the past 6 months
  • ITR for the past 2 years 
  • Past 2 years’ financial statements, 
  • TDS certificate, and more
Property Documents
  • Down Payment Receipt
  • Allotment letter
  • Agreement to sale
  • Title deed
  • Property tax receipt

Which Bank Is Best For Plot Loan?

In India, several banks offer plot loans with features customized to the borrowers' needs.


Maximum Loan Amount

Plot Loan Interest Rate



15 Crores

9.45% - 9.85%

Up to 10 years

ICICI 3 crore 8.90% - 10.30% Up to 30 years
HDFC 10 crores 8.70% - 9.60% Up to 30 years
LIC HFL  75% of property value 8.75% - 9% Up to 15 years
PNB Housing Finance 35 lakhs and above 9.75% - 12.35% Based on your loan amount

Advantages Of A Plot Loan

Borrowers applying for plot loans are eligible for tax benefits but only after the construction of a house on the property.

Additionally, the tax deductions are only valid for the year that construction is finished. Following the completion of construction, you can take advantage of these tax benefits.

Tax Benefit Under Section 80C

In accordance with Section 80C of the Income Tax Act, you are eligible to claim a deduction of Rs. 150,000 from the principal repayment portion of the plot loan. 

The term "principal amount" refers to the precise loan amount that was obtained from the lender; it excludes any interest that was paid. 

Keep in mind that the maximum limit of Rs. 1,50,000 includes the registration fees and the plot title transfer fees as long as they are paid in the year that the construction is finished. 

Plot Loan Tax Benefit Under Section 24

You can also receive tax advantages on the loan's interest portion once construction is finished and you start residing in your newly built home. 

You can avail Rs. 2,00,000 annually from the loan's interest component, but only if you change your plot loan into a regular home loan that permits this deduction. 

When the building is finished, you can convert the plot loan into a home loan by giving your lender the certificates of completion and occupancy.

What You Need To Know When Applying For A Plot Loan

Every bank and lender verifies your details and does a thorough background check before approving your plot loan application. 

As a borrower, you must keep the following things in mind to ensure a hassle-free lot loan application process. 


Plot loans offer a respite in terms of finances and allow borrowers to buy their preferred property to construct their dream homes. As a borrower, go through several banks, their features, interest rates, and eligibility criteria to choose a plot loan that best suits your needs and finances. 

If you are looking for instant loans to buy a plot, then visit the moneyview website or download the loans app to quickly avail of a loan up to Rs. 5 lakhs in under 24 hours!

Loan for Plot Purchase Related -FAQs

Yes. Plot loans and land loans refer to the same loan.

Based on your bank of choice, the rate of approval differs. It takes anywhere from one week to 10 days for a bank to approve your loan.

Yes. NBFCs in India offer plot loans to eligible borrowers.

A borrower's credit score, credit history, and ability to repay the loan affect the interest rates on a plot loan. However, the interest rate on a plot loan typically starts at 8.5% and can go as high as 13%. Please be aware that changes to the repo rate may result in changes to the interest rate range.

Most banks offer plot loans to customers with high credit scores. You can avail an instant personal loan from moneyview even with a low credit score and use it to purchase a plot. 

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