Home Loan Vs. Plot Loan: The difference you must know!

A home loan is one of the most crucial things to understand when buying a house, whether you’re a first-time buyer or a seasoned one. While many individuals prefer to purchase a pre-built home or apartment or opt for investing in Haryana Affordable, others prefer to buy a residential plot of land, either as an investment or to build a home of their design. This is the point at which you must determine if you need a home loan or a plot loan.

Let’s have a deep glance at the difference between the two and the advantages of each!

DIFFERENCE: The primary distinction between these two types of loans is that a home loan can only be used to purchase an already built or under-construction residential property, such as a house or an apartment. A plot loan, also known as a land loan, can only be used to purchase a piece of land that has been designated for residential development.


1.You may obtain a house loan to purchase property in any region you like.

2. The loan can be repaid over a period of up to 30 years.

3. It is possible to claim a tax deduction.

4. Depending on the lender, the loan-to-value (LTV) ratio might be as high as 90% of the property’s cost.

5. If both the husband and wife have distinct sources of income, they can each claim an income tax deduction on loan for both the principle and interest component of the loan if they have joint house loans.

6. You can get a home loan to buy an apartment, bungalow, or row house from approved builders, depending on the lender.

7. You can also get a loan to buy a property from the government, existing cooperative housing societies/apartment owners’ associations, or dwellings developed by individual individuals.


1.The land must be in the region of the municipality or corporation’s boundaries.

2. The loan cannot be used to purchase farmland.

3. The property should not be in an industrial or village area.

4. The loan can be repaid up to 15 years.

5. Only a loan obtained for the building of property on the plot is eligible for a tax deduction, and it can only be claimed after the building has been completed.

6. You will receive a loan-to-value (LTV) ratio of up to 80%.

7. You can get a plot loan to acquire a plot through direct allocation or a resale plot, depending on the lender.

Both a house loan and a plot loan have comparable eligibility requirements, interest rates, and application processes, but this might vary depending on the bank or NBFC from which you apply. Whether you’re applying for a house loan or a plot loan, your credit score plays a crucial role in the process.

Understanding the purpose and characteristics of both a house loan and a plot loan will help you make better financial decisions. However, people in the metro cities often opt to purchase a pre-built home or apartment or invest in Haryana Affordable.  So, it all depends on your feasibility and choice whether to go for Home Loan or a Plot Loan.



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