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One of the financial instruments that banks provide are land loan or plot loan. It is a loan provided by banks like SBI to borrowers for the purchase of a plot of land.
Land has always been a way for people to invest in India and land loans provided by SBI or the State Bank of India for the purpose buying a land.
Land Loans can be undertaken by individuals for the following reasons
Pre-requisites for Land Loans
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
Difference 1: 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
Difference 2: 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%
Difference 3: The tax benefits which are available on a home loan are not available on the land and plot loans
Difference 4: Home loans tend to be longer up to 30 years even, while the land plot loans are extended up to 15 years
Difference 5: 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.
State Bank of India provides land loans for the purchase of land to build your dream home for both salaried/self-employed people. After the purchase of land, the person must begin construction of their home within 5 years from the date of land loan disbursement.
The following are the eligibility criteria for State Bank of India land loans
0.35% of the loan amount where minimum: Rs. 2,000 and maximum: Rs. 10,000
List of papers/ documents applicable to all applicants:
For guarantor (wherever applicable):
1. Provide original Salary Certificate from employer
2. Tax Deducted at Source (TDS) certificate on Form 16 or copy of IT Returns for last two financial years, duly acknowledged by IT Dept.
While there are many advantages, there are also some disadvantages of that need to be taken into account by buyers, this include lack of tax benefits and lower LTV which we will get to in detail shortly.
Customers can use the home loan EMI calculator to know how much EMI they will be paying each month. Customer can make use of the CreditMantri Home Loan EMI calculator and the lender Home Loan EMI calculator.
The importance of this is that customers will know how much EMI they will have to pay based on their loan requirement. This helps them to plan far ahead.
CreditMantri’ s Home Loan EMI Calculator and lender Home Loan Calculator are among the best and probably the easiest ways to compare various home loan offers and choose the loan best suited to your requirements. Using the Home Loan EMI Calculator, you get a simple and quick way to accurately compare the various loans and determine what your EMI will be with the different lenders.
1. How can I apply for a land loan from State Bank of India?
SBI provides customers multiple ways to apply for a land loan. It can be from anywhere using the online and customer care facilities or visit the nearest branch to talk to a representative to discuss the options and then apply. Customers can choose any one of the option they are comfortable with.
2. How long will it take for SBI 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 SBI Land Loans?
The maximum loan amount from State Bank of India land loans is Rs.15 crores.
4. Are there any concessions on interest from SBI Land Loans?
There is concession in the interest rate for women on the interest rate of SBI land loans
5. What is the processing fee for SBI land loans?
The processing fee is 0.35% of the loan amount starting from Rs. 2,000 to maximum of Rs. 10,000
The State Bank of India founded in 1806 is one of the oldest commercial banks in Asia. It is a major banking and financial services public sector company with more than 24,000 branches and 59,000 ATMs. It is the largest bank in India which has a 20% market share in deposits and loans among commercial banks, truly being a bank for every Indian.
Ranjeet Kumar Bharti
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