Many people do not get satisfied with the ready-made homes available for purchase. They prefer building their dream home from scratch, for which they need to buy land first, design their home, and get it constructed the way they want. However, most home loans are available for purchasing ready-made homes only and do not finance the land purchase. This is where a personal loan for land purchase provides the needed funds.
Quick personal loan help people buy the land of their choice and get their home custom-made according to their requirements and preferences. Let’s talk about these loans in detail.
Types of Land Purchase to Fund with a Personal Loan
Lenders specifically design personal loans for the borrowers who want to purchase land without any construction. Borrowers can fund three different types of land purchases using a quick loan. These include:
- Improved Land: This land type already has a setup of roads, utilities, sewers, and other amenities, due to which it a higher cost than other land types.
- Unimproved Land: This land type has some utilities and amenities that a borrower would prefer availing.
- Raw Land: This land type is in raw condition, which means it does not have any amenities or developments. This is the cheapest type of land to buy with a land purchase loan.
Benefits of Purchasing Land with a Personal Loan
Quick personal loans are unsecured loans available to borrowers without any collateral, guarantor, or security. Some benefits of purchasing land with a personal loan include the following:
- Ample Loan Amount: Most lenders offer generous loan amounts to borrowers who want to buy land using a personal loan.
- No End-Use Restrictions: Once approved, borrowers are free to purchase any land type they want. Lenders do not put any restrictions on loan usage.
- Easy Eligibility: NBFCs have simplistic loan requirements that most borrowers can easily fulfil. They are often related to the applicant’s age, income, credit score, and employment.
- Flexible Repayment: Most NBFCs have flexible repayment tenures that the borrowers can select according to their repayment capacity. From a few months to a few years, borrowers may find the EMI suitable to their monthly budget and select a loan tenure accordingly.
- No Collateral Requirement: Since personal loans are collateral-free, they are available to borrowers without security, guarantor, or collateral.
- Easy Online Application: Borrowers looking for a personal loan for land purchase may apply for it online from their smartphone or laptop. Many lenders have loan apps that allow an easy online application with just a few taps without visiting the lender’s office even once.
- Minimal Documentation: Although lenders have minimal documentation requirements, borrowers need to provide a few essential documents to prove their identity, address, and income. However, they can scan and upload their documents online without submitting their hard copies.
- Fast Approval: Online application, minimal documentation, and no collateral involvement make loan processing faster than otherwise. As a result, lenders can approve loan applications within minutes.
Who Can Apply for a Personal Loan for Land Purchase?
Individuals, both salaried and self-employed, can apply for a personal loan for land purchase. Most NBFCs have simple personal loan requirements that include the following:
- Age: The borrowers should be in their prime earning years, ensuring regular EMI repayments on time.
- Income: Most lenders require borrowers to be earning a minimum amount every month to ensure timely EMIs.
- Employment: Lenders prefer borrowers with a stable job and regular income in an established company. Some lenders also offer personal loans to self-employed professionals with steady earnings.
- Credit Score: Borrowers’ credit scores indicate their past credit behaviour, based on which lenders determine their creditworthiness. Most lenders require a minimum credit score of 700 to approve their loan application.
Things to Consider While Applying for a Personal Loan for Land Purchase
Before applying for a personal loan for land purchase, these are a few crucial things to consider:
Land Type: Most quick personal loans are available for land purchase for residential, industrial and agricultural land purchase. Lender’s usually do not ask the purpose of a personal loan.
Land Location: The land’s geographical location affects its cost and thereby, the loan availability.
Interest Rates: Different lenders have varying interest rates on personal loans. It also depends on the borrower’s eligibility, documents, credit score, loan amount, DTI ratio, and other factors. It is crucial to check interest rates offered by different lenders and select the best offer.
Loan Term: Personal loans have shorter tenure than home loans. Since most NBFCs have flexible repayment terms, borrowers may use a personal loan EMI calculator and select a loan term with the EMI amount suitable to their monthly budget.
The information mentioned above will help borrowers looking for quick personal loans for land purchase. Determine the land type you want to purchase with a personal loan and apply to a lender with the best loan offer suitable for your requirements.