Your search results

How is land loan different from home loan?

Posted by Balaji on November 17, 2020

Most people think of buying a new house or a plot of land as purchasing a property.

Although it may appear as a similar transaction, the distinction between buying a

residential apartment and a plot is not known by many. The most common difference

between the two is known when you are applying for loans.

When it comes to buying a house, homebuyers today have two choices: a ready to

move in/ under construction flat or a residential plot. Although due evaluation, EMI

structures, and the overall investment process in a property may seem equivalent,

there are some significant differences that may help you make an informed decision.



A home loan is availed for ready to move in, under-construction or resale properties.

On the other hand, a land or plot loan is availed for the purchase of a piece of land that

will be used primarily for residential purposes. It is not possible to use a home loan for

the purpose of buying land on which you plan to build a building. In the same way, if

they wish to buy a ready apartment or villa, one does not apply for a land loan.


Duration and EMI structure:

In any form of a loan application, duration and EMI structure play a significant role. In

contrast to land loans, home loans have a longer repayment period. The term of a

home loan can be as long as 30 years, while in most situations, a land loan does not

exceed 15 years.


Tax Deductions:

On a housing loan, an applicant can make use of tax deductions on both, the principal

amount and the payment of interest. On the other hand, if one applies for a plot loan,

he/she can get tax benefits only after the construction of the property on that land,

and that too only on the loan sum that was taken against construction.



It is simple and faster for home loans taking nearly 15 days while it takes longer when

the applicant applies for a land loan as the banks & financial institutions conduct the

verification process.


Loan to Value (LTV):

This refers to the amount of loan that can be obtained against a property.LTV ratio for

home loans is about 75-90 percent, i.e. a loan of about 75-90 percent of the total

value of the property can be obtained by the borrower. Whereas for plot loans, banks

limited the maximum LTV to 80 percent depending on the volume of the loan. This

means that you will have to put in at least 20 percent of the funds from your own

pocket if you want to buy a land loan for your personal use or for investment purposes.


Often, home loans and land loans are used interchangeably. It is possible to get

confused between the terms and conditions of both types of loans, but depending on

your query, these key points will hopefully point you in the right direction.


Leave a Reply

Your email address will not be published.

  • Experience World Class Service

  • Excellent
    Based on 170 reviews
    Ashwini Balakrishnan
    Ashwini Balakrishnan
    18. April, 2023.
    Mr. Balaji is our family acquaintance and is known to us for several years, he is also involved in philanthropic work, It is our good fortune that we entrusted the sale of our ancestral property to Mr. Balaji and his company. Mr. Balaji and his team of trusted lieutenants ensured the process right from selecting the buyer till completion of sale was completed without any hiccups and took care of all the paper work. Balaji and his team were willing to go the extra mile to ensure the sale was complete as per agreement. We would like to commend Balaji and team and hope we will have the opportunity to engage him again in the future. Wishing Balaji and team all success personally and professionally.
    Shubha Raghu
    Shubha Raghu
    18. April, 2023.
    We were introduced to Mr. Balaji by our sister sometime back for helping us sell our property. More than a broker he has been a good friend and guided us well through out the entire process. He has always been more than ready to help us. Our heartfelt thanks to him for a smooth journey in selling our property. I will definitely and strongly recommend his name to all my relatives and friends. Wishing him and his company success in all his future endeavours.
    7. March, 2023.
    BDA E-Auction great guidence from Narendra. Thank you for the service.
    Sandeep Yelburgi
    Sandeep Yelburgi
    3. March, 2023.
    In the world of real estate trust, credibility and professionalism doesn't exist. Mr Balaji and team are exception to this. They make buying/selling a property so easy. I could able to sell my property with ease. The process is so transparent from day 1 of meeting the buyer to the last day of selling my property. Thanks for service and keep the good work going in a honest way. Bangalore Real estate need more people like you.
    vikram solanki
    vikram solanki
    22. February, 2023.
    Govindraj Was Awesome To Deal With For a Smooth & Transparent Transaction.
    Chaya Rao
    Chaya Rao
    11. February, 2023.
    Excellent experience working with Mr. Balaji Badrinath who was amazing at his job. Made our real estate transaction smooth, convenient, excellent and top-notch. Balaji is an outstanding Realtor who is very professional, knowledgeable, experienced, efficient, direct, very responsive and has such a pleasing demeanor, is friendly, very prompt and never loses his composure. He helps trouble shoot timely with favorable solutions. He made my real estate transaction as a NRI easy and provided excellent guidance along the way. Bengaluru/India/this world needs more people like him to make it a better place! Thank you very much, Balaji, for all that you are and all that you do. You are truly an amazing human being and a professional! I am so glad that we found you online and you helped us close the deal on my parents’ house. Thank you! A special mention of Ms. Mala Malathi, Operations Manager, who I had the pleasure of meeting. She was very helpful in putting our paperwork together and helping me with some of the process. Thank you, Mala!
    Rekha Srinivasan
    Rekha Srinivasan
    11. February, 2023.
    I am very happy with the services provided by Mr. Balaji Badrinath, who helped me and my siblings on the the sale of our parents house. He was patient, polite, prompt and professional in all his responses! He was efficient in getting all the necessary paperwork and overall he helped make the sale a smooth transaction. I appreciate his professionalism!
    • Bangalore BDA Property Tax Construction industry Drones Home Loans Home Safety Tips Invest in Real Estate Metro in Bangalore New projects Online Rental agreement Own House Property Property Valuation Real Estate Registration Charge Rental agreement Rent House Residential Solar Panels Stamp Duty upcoming

    • Our Latest Listings

    Compare Listings

    Thank you for contacting us!

    Enter Your Information