Banks do offer loans to purchase land, unless the land is purchased for building a residential accomodation or for commercial purposes.
Any individual aged 21 years or above having regular income is generally eligible to apply for land purchase loan.
The maximum amount availed can be 80-85 per cent of the amount needed. However, it depends on person's age while applying for loan, income, repayment capacity etc.
It's important to note that you would not get any tax breaks for the purchase of loans. Tax breaks would be available only when youtake a housing loan for construction, which entitles you to certain exemptions on the principal and interest.
Interest rates can be fixed or floating which is governed by market conditions and may vary with time to time with banks. A nominal processing fee of 1% of amount of loan taken is generally charged by banks.
Usually, the interest rates are higher when compared to other loans and they have bigger down payments.
Loans to buy land - Documents required
1. Application form with photograph
2. Identification and Residence proof
3. Latest salary slip
5. Last 6 months bank's statement
6. Processing fee cheque.
Original documents regarding land ownership.
'No Encumbrance' certificate for the land.
The layout / drawing of the plot's location, approved by the Town Planning Authority.
Revenue receipts and land records for the plot of land.
Tax receipts for taxes paid by the owner of the plot of land.