Buying a plot of land is a big dream for many people in India. Some want to build a house in the future, some want to invest, and some just want to secure land before prices go higher. But paying the full amount in cash is not easy for everyone. That’s why people search for Mortgage Loan For Plot Purchase In India.
In this guide, we explain how these loans work, who is eligible, what interest rates to expect in 2026, the documentation required, and practical tips to make the process smooth.
What Is a Mortgage Loan for Plot Purchase?
A mortgage loan for plot purchase is commonly called a plot loan or land loan. This loan is given by banks and housing finance companies to help you buy an empty residential plot.
In this loan:
- The bank gives you money to buy land
- The plot itself is kept as security (mortgaged)
- You repay the loan in monthly EMIs
- Once the loan is fully paid, the mortgage is removed
This loan is only for land. It is not the same as a home loan for a ready house.
Plot Loan vs Home Loan (Simple Comparison)
| Feature | Plot Loan | Home Loan |
|---|---|---|
| Used for | Buying empty land | Buying or building a house |
| Interest rate | Slightly higher | Lower |
| Maximum tenure | 10–15 years | Up to 30 years |
| Tax benefit | No (till construction starts) | Yes |
| Bank risk | Higher | Lower |
Because land does not generate income and has higher risk, banks are stricter with plot loans.
Who Is Eligible for a Plot Loan in India?
Most banks follow similar eligibility rules. If you meet these points, your chances are good.
Basic Eligibility Conditions
- Age between 21 and 65 years
- Salaried or self-employed with regular income
- Stable job or business history
- CIBIL score preferably 700 or above
- Plot should be legally clear and approved
- Plot must be in a residential zone
👉 If income is low, adding a co-applicant like spouse or parent helps.
How Much Loan Can You Get for Plot Purchase?
Banks do not finance the full cost of the plot.
Loan-to-Value (LTV) Rule
- Usually 50% to 75% of plot value
- Rest amount must be paid by you as down payment
Example:
- Plot price: ₹20 lakh
- Bank loan: ₹10–15 lakh
- Your down payment: ₹5–10 lakh
LTV depends on city, plot approval, and your profile.
Plot Loan Interest Rates in India (2026)
Plot loan interest rates are higher than home loan rates.
Current Interest Rate Range
- 8.3% to 10.5% per year
Interest rate depends on:
- Credit score
- Income stability
- Loan amount
- Bank or housing finance company
Good credit score = lower interest rate.
EMI Example for Plot Loan
Let’s understand EMI with a simple example.
Loan Amount: ₹20,00,000
Interest Rate: 9% per year
Tenure: 15 years
👉 Approx EMI: ₹20,000 – ₹20,500 per month
Always calculate EMI before applying so you don’t struggle later.
Documents Required for Plot Loan
Documents play a very important role in plot loans.
Personal Documents
- Aadhaar Card
- PAN Card
- Address proof
- Passport size photos
Income Documents
- Salaried: Salary slips + bank statement
- Self-employed: ITR + bank statement
Property Documents
- Sale deed
- Clear title documents
- Encumbrance certificate
- Approved layout plan
- NA / residential conversion papers
❗ If land papers are not clear, loan will be rejected.
Step-by-Step Plot Loan Application Process
- Compare 2–3 banks or lenders
- Verify plot legal documents
- Submit loan application
- Bank checks income and CIBIL
- Property valuation and legal check
- Loan sanction letter issued
- Agreement signed
- Amount disbursed to seller
Total time: 2 to 4 weeks in most cases.
Tax Benefits on Plot Loan – Truth You Should Know
Many people assume tax benefit is available on plot loans. That is not fully true.
- No tax benefit for only buying land
- No 80C or 24(b) benefit initially
- Tax benefit starts only after house construction begins
- Loan must convert into home/construction loan
So don’t buy a plot only for tax saving.
Common Mistakes to Avoid While Taking Plot Loan
- Buying land without legal verification
- Choosing agricultural land
- Ignoring future construction rules
- Taking EMI beyond monthly capacity
- Depending on one bank without comparison
Avoiding these mistakes can save you from big problems.
Frequently Asked Questions (FAQs)
Can I get a loan for agricultural land?
No. Most banks do not finance agricultural land.
Can I build a house later on the same plot loan?
Yes, but rules apply. Some banks convert it into construction loan.
What is the maximum tenure for plot loan?
Usually 10 to 15 years.
Is plot loan safe or risky?
Safe if land is legal and EMI is affordable.
Final Advice (Important)
Taking a mortgage loan for plot purchase in India is a good decision only if you plan properly. Always check land documents, calculate EMI honestly, and think about future construction before buying.
If everything is clear, a plot loan can help you secure land today and build your future without financial stress.
