Plot Loan Meaning and Application Steps | Kotak Bank
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03 APRIL, 2025

Investing in land is a timeless way of attaining a valuable asset for the future. Whether you plan to build your dream home or seek a stable investment, land remains a smart and reliable choice in every way. However, purchasing a land or plot can be an expensive financial move in the current market. However, with specialised plot loans or land loans, you can get upto 80% of financial help.

While it’s a great option, it is necessary to completely understand what is a plot loan, its eligibility criteria, and, most importantly, how you can apply for one. If all of this is too overwhelming, we have jotted a quick guide for you to help you invest in your dreamland with ease.

Understanding What is Plot Loan and Its Key Features

Land has been used as a reliable investment in India for ages.

  • With high housing competition, owning a plot can be really fruitful in the future.
  • If you decide to construct your house on the chosen plot, you can reap the tax benefits associated with it.

Plot loans or land loans are financial instruments that help you own a piece of land in a municipal area or residential sector. It is usually available for a period in between 5-15 years. Plot loans solely finance buying an unconstructed plot, whereas home loans help you own a pre-constructed house or help in the construction process.

Who Can Apply for a Plot Loan?

When it comes to availing plot loans from various financial institutions or businesses, there are some prerequisites that you should be aware of:

  • Indian Resident: To apply for any kind of plot loan, you must be a certified citizen of India. NRIs can apply for a Kotak home loan if they are looking to construct a house on Indian land.
  • Location of The Plot: As mentioned before, the selected piece of land should be within municipal and residential zones.
  • Income Source: Although the minimum income requirements vary from one bank to another, having a consistent source of income is necessary to qualify for any plot loan.
  • Credit Score: A favourable credit score assesses your honesty and capacity to repay the loan. Aim for a score over 700 to ensure simple loan approval.
  • Age: The lowest permissible age is 18 years, while the highest allowable age can reach upto 70 years.

Learn How to Apply for a Plot Loan in 6 Easy Steps

Now that you have understood the eligibility criteria for the application of the loan, let’s dive deeper into the process involved in the application of your plot loan:

1.Research and Compare

Before you start filling out forms, it is recommended to hustle and research different lenders, their practices, testimonials and interest rates. At Kotak Mahindra Bank, we offer exciting interest rates and other benefits to help you achieve financial stability. 

2.Filling Application

While a lot of banks have online applications, you can also fill out the form at the bank with the help of their employees.

3.Submit Documents

Make sure all your documents are available and ready. Keep extra photocopies in case of any irregularities. Check everything twice and submit all the necessary paperwork. Here are some general documents that you might require for plot loan applications:

  • Identity proofs like Aadhar card, Voter ID card or passport.
  • Income proofs such as pay slips, bank statements and tax returns of the last 2-3 years. For self-employed individuals, profit and loss statements are also applicable to some banks.
  • An electricity bill or an Aadhaar Card is needed to provide proof of address.
  • You might need passport-size photographs.
  • Property documents from sale agreement to approved layout plan.

4.Application Review and Background Check

The lender will go through your documents and past bank statements and verify whether you are fit for the loan or not.

5.Loan Approval and Sanction Letter

If you are fit for the loan, you’ll receive a sanction letter with all the details regarding the EMIs, interest rates and total loan repayment amount. You can also verify the EMI amount by using the Kotak loan EMI calculator.

6.Repayment and Ownership

Now, the process is completed, and you have to focus on repaying the loan amount.

Summing Up

Owning your land in India is not just an investment; it’s a symbol of status and success for most individuals. Plot loans can help you achieve that dream with ease and save you from the heavy financial burden. Whether you are planning to build your home from scratch or looking for a safe investment, a plot loan is a fast and hassle-free process. Understanding the plot loan meaning, its eligibility criteria, and the application process is key. For a reliable and trusted partner, you can head to Kotak Mahindra Bank and apply for a plot loan today!

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Frequently Asked Questions

Is there any plot loan processing fee?

The processing and documentation fee varies for self-employed individuals and salaried employees. For salaried employees, it can range between 0.5-1%, while it can be around 1-2% for self-employed candidates.

Is a plot loan better than a home loan?

They are both different loans for different projects. Where home loans are applied for the construction of your house, a plot loan only covers the buying cost of the empty land. Home loans generally offer lower interest and higher tenures than a plot loan.

How long will it take to process the plot loan?

The bank has to do a thorough background and credit score check for verification. It usually takes around a week to get the loan approval confirmation.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.