Buyers routinely assume a plot purchase can be financed like an apartment. Lenders treat the two quite differently, and finding that out at sanction stage is an expensive way to learn it.
Expect a lower loan-to-value
Where a home loan may fund 80–90% of value, a plot loan commonly funds 60–70%. Plan the larger down payment from the start rather than discovering the gap after you have committed to a booking.
Expect a shorter tenure
Plot loans typically run to fifteen years where home loans stretch to twenty-five or thirty. Same principal, shorter term, materially higher EMI. Run the number before you decide what you can afford, not after.
Read the construction clause
Most plot loans carry a condition requiring construction to begin within a set window — often two to three years — with the rate or terms changing if it does not.
If your intention is to hold the land rather than build, say so to the lender up front and get their answer in writing. This is the clause that surprises people.
Composite loans
If you do intend to build, ask about a composite loan covering both the land and the construction. Tenure and LTV usually improve, and the construction portion is released in stages against progress.
What we help with
We are not a lender and we do not take a commission on financing. What we do is put the document set in the format lenders ask for, and stay on the file through sanction and disbursal — because a delayed sanction is the most common reason a purchase stalls.
Written by
Sales Director
Got a question this did not answer? Call the office — we would rather talk it through than have you act on a guide that does not fit your situation.
