A land loan is different from housing or home loan granted by banks or financial institutes for those borrowers or buyers who aren’t ready to begin construction at this time or just wants to buy a plot.Most banks specify a limit for the loan-to-value ratio that they would finance for a land purchase. It could vary from 70 to 80 percent of the registered value. The maximum loan amount that banks or financial institutes lend for the purchase of a plot of land differ from one bank to another.
The repayment of the loan is through equated monthly installments (EMIs), just like in case of other home loans. However, the tenure of these loans is usually shorter – up to 10 years. The interest paid on the money borrowed for the purchase of land is not eligible for income tax deductions. However, once the borrower converts the land loan into a housing loan to finance the construction of a residential property, he can avail the tax benefits.
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Monday, March 29, 2010
Monday, February 15, 2010
Loan Against Porperty- An easy bank loan
Loan against property (Lap) has come as a boon for borrowers who need large sum of money to fund their emergency financial needs.In Lap, customers can avail up to 50 per cent loan of the existing property value. The interest rate in Lap is around 200-300 basis point higher than bank home loan. This is a floating rate loan.
If the property is currently not under any mortgage, the process to avail a Lap is simpler as compared to a mortgaged one. You can take Lap as a lump sum amount, wherein you will have to repay Lap in equated monthly instalments. You also have the option of taking Loan against property as an overdraft account, which lets you draw more than your available bank balance.
In the past one year, banks have actively beefed up their loan against property portfolio. Lap was essentially a domain of foreign and private banks.Bankers said that mostly salaried customers take Lap when they need money for marriage or foreign education of kids, when buying a new property or renovating their house. Self-employed seek this loan to fund their business needs and to pay off debt.Red flags about Lap is easy but make sure that you repay loan on time. If you don’t, you run the risk of losing the property you pledge.
If the property is currently not under any mortgage, the process to avail a Lap is simpler as compared to a mortgaged one. You can take Lap as a lump sum amount, wherein you will have to repay Lap in equated monthly instalments. You also have the option of taking Loan against property as an overdraft account, which lets you draw more than your available bank balance.
In the past one year, banks have actively beefed up their loan against property portfolio. Lap was essentially a domain of foreign and private banks.Bankers said that mostly salaried customers take Lap when they need money for marriage or foreign education of kids, when buying a new property or renovating their house. Self-employed seek this loan to fund their business needs and to pay off debt.Red flags about Lap is easy but make sure that you repay loan on time. If you don’t, you run the risk of losing the property you pledge.
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