{"id":3809,"date":"2021-08-26T07:19:17","date_gmt":"2021-08-26T07:19:17","guid":{"rendered":"https:\/\/www.omaxe.com\/blog\/?p=3809"},"modified":"2024-02-02T12:10:58","modified_gmt":"2024-02-02T06:40:58","slug":"home-loan-vs-land-loan-same-or-different","status":"publish","type":"post","link":"https:\/\/www.omaxe.com\/blog\/home-loan-vs-land-loan-same-or-different\/","title":{"rendered":"Home Loan vs Land Loan: Same or Different?"},"content":{"rendered":"\n<p>Do you want to lease or buy a new property? If yes, the market has several options for finance. However, exploring such options give rise to practical questions. Like this one: What is the&nbsp;<strong>difference between a home loan and a land loan<\/strong>?<\/p>\n\n\n\n<p>Believe us, even today, many consumers feel both these loans are similar. Such loans indeed have a marginal difference. Yet, such a difference can prove significantly vital for investors.<\/p>\n\n\n\n<p>In this guide, we focus on the similarities and differences between home loans and land loans. Eventually, you will be able to make the right decision to buy your next property.<\/p>\n\n\n\n<h2 id=\"h-what-are-home-loans\">What Are Home Loans?<\/h2>\n\n\n\n<p>In simple words, a home loan is an amount of money you borrow from banks or financial institutions. This&nbsp;<strong>home loan definition<\/strong>&nbsp;applies to house loans too.<\/p>\n\n\n\n<p>The purpose of this loan is to purchase a house or residence. Borrowers can select a suitable interest rate scheme. Generally, these interest rates are:<\/p>\n\n\n\n<ul>\n<li>Fixed<\/li>\n\n\n\n<li>Floating<\/li>\n\n\n\n<li>Partly-fixed<\/li>\n\n\n\n<li>Partly-floating<\/li>\n<\/ul>\n\n\n\n<p>In addition, you can even get an exemption in the income tax after availing of a home loan. It\u2019s vital to consult your accountant for better clarity regarding tax exemptions.<\/p>\n\n\n\n<h2 id=\"h-what-are-land-loans\">What Are Land Loans?<\/h2>\n\n\n\n<p>Now, land loans are different from home loans in one aspect. This type of loan allows a borrower to make money to purchase a plot of land.<\/p>\n\n\n\n<p>This money is available from banks or other financial institutes. Land loans are of three basic types:<\/p>\n\n\n\n<ul>\n<li>Raw<\/li>\n\n\n\n<li>Improved<\/li>\n\n\n\n<li>Unimproved<\/li>\n<\/ul>\n\n\n\n<p>Land loans can be a flexible investment. Importantly, you can use the plot of land for residential purposes. Still, when you&nbsp;<strong>apply for a land loan<\/strong>, the procedure is a tad difficult than mortgages.&nbsp;&nbsp;<\/p>\n\n\n\n<h3 id=\"h-home-loan-vs-land-loan-the-similarities\">Home Loan vs Land Loan: The Similarities<\/h3>\n\n\n\n<p>You might be wondering why there\u2019s a fuss about the&nbsp;<strong>home loan vs. land loan<\/strong>&nbsp;query. Even though the definitions seem straightforward, there are certain similarities.<\/p>\n\n\n\n<p>The following points are nearly the same for both home and land loans:<\/p>\n\n\n\n<ul>\n<li>Application process<\/li>\n\n\n\n<li>Terms and conditions<\/li>\n\n\n\n<li>EMI options<\/li>\n<\/ul>\n\n\n\n<p>The nature and type of applications for both loans are similar. However, the tenure of land loans is comparatively less than that of home loans.<\/p>\n\n\n\n<p><strong>Also, Read  : <a href=\"https:\/\/www.omaxe.com\/blog\/5-common-myths-on-home-loans\/\" target=\"_blank\" rel=\"noreferrer noopener\">5 Common Myths On Home Loans<\/a><\/strong><\/p>\n\n\n\n<h3 id=\"h-difference-between-home-loan-land-loan\">Difference Between Home Loan &amp; Land Loan<\/h3>\n\n\n\n<p>Home loans and land loans differ in certain prospects. Let us understand these prospects in brief.<\/p>\n\n\n\n<h3 id=\"h-eligibility-of-citizens\">Eligibility Of Citizens<\/h3>\n\n\n\n<p>In India, residential citizens and NRIs (Non-residential Indians) can both apply for home loans. The application process has a marginal difference.<\/p>\n\n\n\n<p>However, for land loans, NRIs aren\u2019t eligible. In other words, only residential Indian citizens can apply for a land loan.<\/p>\n\n\n\n<h3 id=\"h-eligibility-of-property\">Eligibility Of Property<\/h3>\n\n\n\n<p>Almost all constructed and under-construction residences are eligible to pass the home loan criteria. Importantly, the home loans for <a href=\"https:\/\/www.omaxe.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">residential spaces<\/a> are flexible than land loans.<\/p>\n\n\n\n<p>On the contrary, land loans are rigid. They cover specific types of land. The criteria for qualification of land for loans are:<\/p>\n\n\n\n<ul>\n<li>Residential plot<\/li>\n\n\n\n<li>Non-commercial plot<\/li>\n\n\n\n<li>Non-agricultural land<\/li>\n\n\n\n<li>Located within corporation limits<\/li>\n\n\n\n<li>Falling outside village and industrial area<\/li>\n<\/ul>\n\n\n\n<p>Moreover, home loans apply to houses anywhere in the country.<\/p>\n\n\n\n<h3 id=\"h-maximum-loan-amount\">Maximum Loan Amount<\/h3>\n\n\n\n<p>If you want to buy a new house, a home loan can supply 90% of the total property price value. So, you can buy a new residence with less in-hand money. Home loans can prove highly beneficial in such cases as they allow a greater cushion for initial investment.<\/p>\n\n\n\n<p>If you want to buy a new land plot, there\u2019s more need for initial investment. Land loans can theoretically cover 75% of the total property cost.<\/p>\n\n\n\n<h3 id=\"h-land-loan-vs-home-loan-interest-rate\">Land Loan vs Home Loan Interest Rate<\/h3>\n\n\n\n<p>Banks and financial institutes offer both loans on nearly similar interest rates. Still, you can expect land loans to cost an average of 0.75% more than home loans.<\/p>\n\n\n\n<p>Also, the maximum tenure for land loans is 15 years. Home loan consumers can enjoy lenient repayment periods of up to 30 years.<\/p>\n\n\n\n<h3 id=\"h-home-loan-vs-land-loan-comparison\">Home Loan vs. Land Loan Comparison<\/h3>\n\n\n\n<p>We have segregated the comparison points as per sections to ease your research:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Parameter<\/strong><\/td><td><strong>Home Loan<\/strong><\/td><td><strong>Land Loan<\/strong><\/td><\/tr><tr><td>Property limits<\/td><td>No limits<\/td><td>Under corporation limits, away from villages and industrial area<\/td><\/tr><tr><td>Purpose<\/td><td>Under-construction or constructed home<\/td><td>Plot to build a new home from scratch<\/td><\/tr><tr><td>Tax benefit<\/td><td>Yes<\/td><td>No<\/td><\/tr><tr><td>LTV<\/td><td>75 \u2013 90%<\/td><td>70 \u2013 75 %<\/td><\/tr><tr><td>Eligibility<\/td><td>Residents, NRIs<\/td><td>Residents<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h4 id=\"h-endnotes\">Endnotes<\/h4>\n\n\n\n<p>Now that you know the\u00a0<strong>difference between a home loan and a land loan<\/strong>, it\u2019s vital to contact the right people. Banks and real estate agents can help you get loans at the best rates. However, you need <a href=\"https:\/\/www.omaxe.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">top real estate developers in India<\/a>\u00a0to simplify the overall property transaction. So, be sure you invest and explore the property market wisely.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Do you want to lease or buy a new property? If yes, the market has several options for finance.&hellip;<\/p>\n","protected":false},"author":1,"featured_media":3810,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[611],"tags":[310,618,612,616,617,614,613],"wbAuthor":{"name":"Omaxe","link":"https:\/\/www.omaxe.com\/blog\/author\/omaxe\/"},"wbDate":"Aug 26, 2021","wbCategories":{"space":"<a href=\"https:\/\/www.omaxe.com\/blog\/category\/real-estate\/apartments\/real-estate-apartments\/home-loan\/\" rel=\"category tag\">Home Loan<\/a>","coma":"<a href=\"https:\/\/www.omaxe.com\/blog\/category\/real-estate\/apartments\/real-estate-apartments\/home-loan\/\" rel=\"category tag\">Home Loan<\/a>"},"wbComment":75,"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.0 (Yoast SEO v20.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Home Loan vs. Land Loan: Same or Different? | Guide by Omaxe<\/title>\n<meta name=\"description\" content=\"In this guide, we focus on the similarities and differences between home loans and land loans. 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