Know the difference between plot and home loan, what are the advantages and disadvantages
When it comes to buying a house or a plot, it becomes necessary to discuss the loan. There are options like building a house, buying a house and building a house after buying a plot. The process of taking a loan for them is also almost the same.
But there is a difference in terms and conditions for taking a loan to buy a house and to buy a plot.
Home loan is taken to buy a ready built or under construction house.
Plot loan is available for the land on which the house will be built.
How plot loan can be converted into Home loan:
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After taking a plot loan, it can be converted into a regular home loan by giving the certificate of completion of the house on that plot to the bank within the stipulated time.
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If a loan is taken for building a house along with a plot, then the entire loan comes under the housing loan scheme. This can provide benefits like low margin money, low interest rate, repayment period up to 30 years and tax exemption.
Difference between Home loan and Plot loan:
Home Loan:
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Home loan is available for buying a house or flat in both urban and rural areas. It can be taken either on fully built or under construction property.
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Home loan is available up to 90% of the cost of the property.
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Home loan is available for the tenure of up to 30 years.
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The interest rate charged on home loan is low.
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Tax savings can also be availed on taking a home loan.
Plot Loan:
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Plot loan is available only for residential land in Municipal Corporation or Nagar Palika limits. It is not available on rural and industrial land.
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Plot loan is available only up to 70% of the cost.
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Plot loan is available only for 15 years.
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The rate of interest on plot loan is higher than that of home loan.
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There is no benefit of any kind of tax exemption on plot loan.
