Whether you’re thinking of laying the foundation for your dream home, or want to turn a profit by investing in real estate, owning land is an expensive affair. When looking to invest, your best option is to go with a loan for land purchase. These are of a short tenure and some banks and NBFCs will loan you an amount of up to Rs.1 crore. Before you take a loan to buy a plot, you need to ensure that the land meets the criteria as you cannot buy agricultural land or land in a village via a plot purchase loan.
After ensuring you meet the criteria to apply for a loan to buy land, you need to produce the necessary documents to proceed. Here is a list of documents you’ll need.
When purchasing a piece of land through a loan, you will need to furnish a list of personal documents that includes.
- Proof of identification: Driving license, Ration card, Passport, PAN card, Employee ID or Voter’s ID.
- Proof of Age: PAN card, Birth certificate, Bank Passbook, Passport, Driving Licence.
- Address Proof: Voter’s ID, utility bills, Passport or Ration card.
- Passport-size photographs.
You can furnish a selected few attested copies of these documents to prove your identity.
Submitting accurate and current income documents is vital for your application, as it assures the lender of your financial standing. Moreover, a steady income will allow you to get a hefty sanction quickly. The documents required to prove your strength are as follows:
- Pay slip: 3 to 6 months
- Form 16
- IT returns: documentation of IT returns for the last 3 years.
- Letter from employer: A letter to certify your employment, in case you are salaried.
- Bank statement: Details of the last 6 months
These documents are extremely crucial and you need to pay careful attention to these and submit accurate papers only. Any error can hamper the progress of your application. These are the property documents you’ll require:
- Original documents of ownership
- Layout of the location/plot of land
- Revenue receipts and land records, issued by the revenue authority
- Tax receipts paid by the previous owner of the plot
A plot loan helps you own a piece of land. However, if your goal is to build a dream home, then don’t confuse a plot loan with a home loan. While a home loan doesn’t fund land purchases, it covers construction, home purchase and home renovation costs. You also enjoy tax benefits under Section 80C and 24 of the Income Tax Act, which helps bring down your tax liability.
Additionally, there are several lenders that offers you a high loan amount of up to Rs.5 crore on a competitive interest rate. Some of them also lets you foreclose your loan before the tenure is up at no additional costs and offers doorstep service to add convenience during application. You can also refinance existing home loans and get a better interest rate to make it a lot more affordable.