Yes, quite a bit! Traditionally, in India, investors buy land mostly for investment purposes or for constructing a house. If you intend to buy a plot of land you will not be able to go in for a home loan but you will need a land loan.

WHAT ARE HOME LOANS?

Home loans are given for the property that is already constructed or is under construction or which may go in for construction soon.

If you want to buy a plot that is vacant a land loan is what you will need.

The terms and rates for land loans are intrinsically different from home loans:

LOCATION OF THE PROPERTY AND TYPE: You could get a home loan on all properties without consideration of their location or the type involved, but you will get a land loan only on a residential plot. Also for a land loan, the property should be placed “within municipal limits.”

LOW TENURE: For a land loan the loan period is usually lower than that compared to the ones on home loans. For a land loan the maximum tenure is usually 15 years while for a home loan it could go up to 30 years. There could be some companies that offer upto 20 year land loan periods in India.