Why Are Plot Loans Harder to Get Than Home Loans?
Banks view open land differently than constructed flats. Learn about LTV caps, layout approval requirements, and loan eligibility.
Many buyers are shocked when their pre-approved home loan is denied when they try to use it to buy a plot.
The Risk Profile
Banks consider open land to be a highly speculative asset compared to a constructed flat. Because of this, the Loan-to-Value (LTV) ratio is strictly capped. While a home loan might cover 90% of the cost, a plot loan will rarely cover more than 70%.
Approval Mandates
Nationalized banks will ONLY fund plots in BDA or BMRDA approved layouts. They will outright reject applications for Panchayat / B-Khata / Revenue site layouts.
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