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Indians consider land an important asset and investment. To purchase a land for constructing houses or various other commercial purposes will require a huge amount of money. With the help of banks, you can easily purchase a land.
Canara bank, one of the popular banks in India, provides land loans to individuals for purchasing plots to build a house. If you are looking for a land loan, Canara bank could be a better option.
The following are the eligibility criteria for Canara Bank land loans
Purpose: To purchase plots for construction of houses
Loan Amount: The borrower can get up to 4 years of gross annual salary or up to 75% of value of the property whichever is less
Tenure: The loan can be repaid in maximum of 10 years or up to 65 years of age of the borrower at the time of maturity
Margin: Minimum of 20% of the value of the property
Security: The property to be purchased for construction of the house
The applicants can get the following benefits by applying through Canara bank for a land loan
The applicant should be an Indian National and should be above 18 years of age and 65 years or below at the time of loan maturity. As repaying ability is an important factor, the borrower has to be salaried or self-employed with consistent income.
Interest Rate: The interest rate starts from 9.50% onwards. However, this is subject to change at the sole discretion of the bank.
Prepayment Charges: No charges are levied on prepaying the loan
Processing Fees: 0.50% of the loan amount or minimum of INR 1500 or maximum of INR 1000
The following documents need to be submitted while applying for a plot loan
This is a common query that is raised when discussing about land loans and plot loans, at first sight they do seem to meet the same purpose, but they are quite different as we shall see
A home loan is provided for a property that is built, under construction and or undergoing restoration and extension, while a land loan is predominantly given for purchase of a piece of land or plot
The Loan to Value ratio for a home loan is about 80%, for loans above 3 lakhs the LTV is 90%; while the LTV for a plot is 50-70%
The tax benefits which are available on a home loan are not available on the land and plot loans
Home loans tend to be longer up to 30 years even, while the land plot loans are extended up to 15 years
Another factor that is considered while taking up a land loan is the presence of 2-5% of foreclosure charges that are absent in a home loan. These are the primary differences between a home loan and a land loan.
For any loan applicant, a credit score is an important facet that is considered by banks and other lenders when they are about to make lending decisions for any loan including your land loan. It is the onus of the applicant to maintain a good credit health especially for those who are looking to take big ticket and medium to long term loans, the presence of a poor credit score or no credit score could lead to unwanted situations such as unfavourable terms or sometimes even rejection.
To avoid loan rejection, learn more about your credit health, start with your free credit score.
Before a person applies for a Canara Bank land loan it is best to do an eligibility check which is available on the Canara Bank website and at CreditMantri.com This way your credit score will not be affected as the bank will only soft pull your credit score and compares with other internal criteria to make sure you are eligible.
Your land loan can be repaid in following two ways.
Standing Instruction (SI): If you are an existing account holder with lender, Standing Instruction is the best mode of repayment. Your EMI amount will be debited automatically at the end of the monthly cycle from your bank account you have with the lender.
Electronic Clearing Service (ECS): This mode can be used if you have a non-lender bank account and would like your EMIs to be debited automatically at the end of the monthly cycle from this account.
Post-Dated Cheques (PDCs): You can submit post-dated EMI cheques from a non-lender account at your nearest lender bank Loan Centre. A fresh set of PDCs will have to be submitted in a timely manner. Please note Post Dated Cheques will be collected non-ECS locations only.
1. How can I apply for a land loan from Canara Bank?
Canara Bank provides customers multiple ways to apply for a land loan. You can apply online or download the application form and submit it to the nearest branch. You can also walk into any branch and apply for the plot loan.
2. How long will it take for Canara Bank land loan approval?
It will take at least 1 week for the bank to do their due diligence and verify all the documents.
3. What is the maximum loan amount I can get from Canara Bank Land Loans?
The maximum loan amount from Canara Bank land loans is four years gross Annual salary/income OR 75% of the cost of the site/guideline value (whichever is less).
4. Are there any concessions on interest from Canara Bank Land Loans?
There is concession in the interest rate for women on the interest rate of Canara Bank land loans
5. What is the processing fee for Canara Bank land loans?
0.5% of Loan Amount Minimum Rs. 1500/- Maximum Rs. 10000/-
Canara Bank is one of the largest public-sector bank in India, headquartered in Bangalore. The bank has a network of 6089 branches and more than 10519 ATMs spread across India. It provides a wide range of banking products and financial services to its customers.
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