Buying a plot has its own advantages and disadvantages. Well, when you buy a plot you can avail of tax benefits and you can also get plot loans at a lower interest rate. Therefore, investors always purchase a plot from cities since having a house of your own is something we dream to have. But not all the time banks will provide you with a plot loan. Let me share with you why banks avoid finance open plots.
Get home loans at the lowest interest rate through NoBrokerWhy banks avoid loans on open plots?
Banks provide plot loans on the condition that a house should be built on land within 2-3 years. If you fail to provide a completion certificate you will be converted to a normal loan and the interest rate will also increase. If you fail to pay proof of construction after three years, the bank will charge you an additional amount.
Since some borrowers fail to construct a house on the land they own, banks usually do not provide plot loans. Some banks consider that if a buyer wants to purchase a house, he/she will directly do so without investing time in buying land. And the chances of not constructing a house on a plot is often higher. Banks face a loss when a plot turns to a normal loan. Therefore, they run a proper background check before they offer plot loans.
I hope you understand why banks avoid finance open plots.
Read more:
What is the difference between
plot loanand home loan?
Which Bank Is Best For
plot loan?
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Why banks avoid finance open plots?
Somnath
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3 Year
2023-01-02T12:43:16+00:00 2023-01-02T12:43:16+00:00Comment
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