When you want to buy a residential home for real estate investment benefits, you will be confused about getting land debt or home loans. What you need to know is that the assets of the residence are only for the construction of the construction, or only for building and construction. In this article we are here to show you the Difference Between Home Loan and Land Loan.
There may be several similarities between the interest rate and the two types of loans, but there are some significant differences between them.
Banks or Non-Banking Financial Companies (NBFC) provide land and home loans to Indian residents for over 21 years. NRIs can take a loan from some banks to utilize land for residential purposes. Both charges have additional processing fees. Note that home loan interest rates may be lower than some banks and home loans.
The Difference Between Home Loan and Land Loan :
You need to understand the limits of the use of home or land debt. And to get what you want to apply in two. You’ll get a specific loan right now.
Land area and purpose of the property:
On the other hand, a home loan is given only in a municipality or a corporation limits, which can be used to build a house later with home loan assistance.
Land loan funding is Not applicable For
- agricultural or commercial purposes
- In the industrial area or in the village does not applicable
In addition, some banks offer only land debt. The loanee must ensure that the homeowner has to start the house at the time of the loan under the terms of the loan in the bank. For example, SBI Realty loan is required to ensure that the house is built within 2 years of allotment of the loan.
Debt value (LTV):
LTV is the amount of debt you get against your land value. In home loan you can get 80 to 85 percent or 90 percent in some cases for your home funding. In a land loan, you can imagine up to 70% of LTV. This means you have to spend 30 percent of your own for a plot purchase.
Land loan period is lower than the home loan . This can go for a maximum of 15 years, but it will continue for 30 years for home loans. With exceptions, some NBFCs can go up to 20 years for land loans.
Loan Amount Limit:
The limits imposed on a maximum amount of money given to some of the loans. If you ever want to take a loan, it is best to prosecute you with various banks on their limits before.
Tax exemption for home loans will pay interest as well as the principal amount. This exemption is not available for loans. This loan is only available after completing house construction and completion in all land.