Union Bank Plot Loan – Build Your Dream from the Ground Up

Buying a plot of land is the first step toward building the home you’ve always dreamed of. However, not everyone has the funds ready to purchase land outright—especially in urban or metro areas where land prices are constantly rising.

The Union Bank Plot Loan is targeted at assisting persons to purchase residential plots or sites in layouts approved by the government. And whether you want to buy from the government authority like DDA, LDA, or JDA or from renowned private developers like DLF or Omaxe-the loan scheme considers borrowing options according to your repayment ability.

Let us see all that one needs to know before applying: eligibility, quantum, repayment period, LTV ratios, and interest rates.

What is the Union Bank Plot Loan?

The Union Bank Loan for Purchase of Plot is a distinctive loan scheme that serves to fund its clientele to buy residential plots in rural, semi-urban, and metro locations. The loan, therefore, helps to purchase the plot from varied agencies, which include:

• Government bodies like DDA, HUDA, LDA, JDA, etc.
• Statutory authorities of the Central/State governments or urban local bodies.
• Private developers with projects approved by statutory state authorities or RERA.
• Second sale transactions in approved colonies or townships.

This caters to salaried individuals and self-employed: NRI and Union Bank employees who wish to invest in land for future residential construction.

Quick Overview of the Plot Loan Scheme

Who Can Apply?

The scheme is available to:

• Existing customers of Union Bank with satisfactory account history
• New customers, with a proper introduction or verifiable credentials
• NRIs, provided documentation, and repatriation conditions are met
• Employees of Union Bank (can later convert this to a staff home loan if they construct a home on the plot)

Note: Maximum entry age is less than 60 years at the time of application. The borrower must be below 70 years of age at loan maturity.

Eligible Properties for Plot Loan

The residential plots must be from one of the following categories:

1. Plots allotted by government agencies, e.g.:
   • Delhi Development Authority (DDA)
   • Lucknow Development Authority (LDA)
   • Jaipur Development Authority (JDA)
   • Haryana Urban Development Authority (HUDA)
2. Sites from planning authorities or urban development bodies
3. Private developers, such as DLF, Omaxe, or similar, provided:
   • The layout is duly approved by the statutory authority
   • It is part of a RERA-approved project
   • The property is registrable under local laws
4. Second-sale plots in government-approved colonies with sanctioned layout maps

Loan Amount and Area-Wise Limits

Your loan eligibility depends on your income, property value, and location category.

Note: All approvals are subject to repayment capacity assessed under Union Home Loan norms.

Margin and Loan-to-Value (LTV)

Depending on the loan amount, here’s the margin you’ll need to contribute:

For example, if your plot costs ₹60 lakh, Union Bank may finance up to ₹48 lakh. You must contribute the remaining ₹12 lakh as a margin.

Repayment Terms

Union Bank offers two different repayment schedules, depending on whether you plan to take a home construction loan in the future.

Without Home Loan

If you’re only buying the plot and not availing of a construction loan, the tenure is limited to:

• Maximum of 120 months (10 years) OR
• Until the borrower turns 70, whichever is earlier

With Home Loan

If you later take a construction loan from Union Bank:

• The combined repayment period can go up to 30 years or until the borrower reaches 70 years of age.

No Moratorium

Unlike home construction loans, this plot loan does not offer any moratorium. Repayment must start immediately from the month following disbursement.

Interest Rate

The interest rate for the Union Bank Plot Loan is the same as the Union Home Loan Scheme and is linked to your credit score and borrower profile. The effective rate typically ranges based on:

• Credit Score (CIBIL/Experian)
• Income bracket
• Gender (concessions for women borrowers may apply)
• Employment status (salaried/self-employed)

Union Bank does not charge a separate premium for offering plot loans, making it one of the most affordable options in the market.

Security & Processing Charges

Security

• Union Bank requires an equitable mortgage (EM) of the plot being financed
• Personal guarantees from all applicants are mandatory
• Interim security is not required unless specified by the branch for risk mitigation

Processing Fee

• 0.50% of the sanctioned loan amount
• Maximum fee: ₹15,000 + GST
• Free processing for Union Bank staff

Restrictions on Loan Takeover

Union Bank does not allow loan takeover from another bank or financial institution unless the construction on the plot is already completed. This is to ensure that the loan is used strictly for plot purchase with genuine construction intent.

Union Bank Plot Loan vs. General Plot Loans