A Home Loan is a loan taken to buy a residential property by an individual from a bank or any other financial institution at a given interest rate. You must pay this loan back in Equated Monthly Instalments (EMIs) to the bank. The purpose of opting for a Land Purchase Loans is to purchase a plot of land for constructing a residential property or for investment as opposed to Home Loans.
Still, confused between the two? Fret not, in this article; we will see the similarities and points of difference between both the loans to give you a better understanding of them.
What are the similarities between Home Loan and Land Purchase Loan?
Here are some of the common points between the two loans:
Application process: A similar due diligence process is undertaken for both loans; hence the application process is the same too.
Eligibility criteria:
Applicant must be either salaried or self-employed.
Applicant must be above 21 years old while applying for the loan.
Salaried individuals should show a minimum income of Rs. 10,000 p.m.
Self-employed individuals must present a minimum business income of Rs.2 Lakh p.a.
Applicant must hold a good credit score.
EMI options: Some of the EMI options offered for Home Loans are:
Home Loan EMIs with a moratorium
EMI on Home Loans with overdraft option
Home Loans with increasing EMI option
What are the differences between Home Loan and Loan for Plot Purchase (Land Loan)?
Differences | Home Loans | Land Purchase Loans |
Purpose | Purchase of built up, under construction properties | Acquisition of land/plot |
Loan to value | Up to 80%-90% | Up to 70% |
Tenure | Up to 30 years | Up to 15 years |
Tax benefits | Tax benefits applicable | Tax benefits not applicable |
Foreclosure charges | No foreclosure charges for floating rate Home Loan | 2%-5% of foreclosure charges applicable |
What are the Documentation Requirements and Fees for getting a Home Loan or a Land Purchase Loan?
To ease out your Home Loan application process, have a look at the documentation requirements for it beforehand:
For Home Loan:
Duly filled application for your Home Loan along with copies of your photographs.
Bank statements of the past 6 months.
Residence and identity proof.
Fee cheque for processing.
Most recent salary slip/ proof of business/ educational qualification certificates.
Agriculturists who require a Home Loan need to submit some more documents as mentioned below:
Title documents of agricultural land that prove landholding.
Statements of the last 2 years of availed loans.
Copies depicting cultivated crops on the land could be in the form of title documents.
For Land Purchase Loans:
To make the loan documentation process faster for a Land Loan, these are the required documents:
Signed and filled application form with photographs.
Some identity proof- passport, PAN card, voter ID, etc.
Some address proof- voter id, ration card, driving license, passport, etc.
Educational qualification- most recent degree certificate.
Housing documents- approved plans, title documents etc.
Along with the documentation mentioned above, for an agriculture Land Purchase Loan, you also need to submit:
Basic KYC (Know-Your-Customer) documents such as Aadhaar Card, PAN Card, and so on.
Certificates that show your landholding.
A bank account statement of your Savings Account might be handy while you apply for a loan for a home or land, along with other related documents.
To apply for Land Purchase Loan or Home Loan with HDFC Bank, click here.
Read more about Home Loan versus Construction Loan here.
*Terms and conditions apply. Home Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.
