So, you’re on the hunt for the best bank for plot loan deals to buy a piece of land? Nice! That’s a bold step—and honestly, a smart one too. In today’s market, owning land can be a solid investment, especially if you’re thinking long-term.
See, unlike ready-made homes, buying a plot gives you the freedom to build on your terms—what you want, when you want. Total flexibility and full control. That’s the beauty of it.
But here’s the twist: getting a plot loan isn’t quite the same as getting a home loan. The process, the paperwork, even the conditions—they all have their own quirks. And not every bank offers the same benefits.
So, if you’re sitting there wondering which is truly the best bank for plot loan options, walk with us—we’re about to break it all down for you.
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Plot Loan Interest Rates in 2025
The Plot Loan interest rates can vary vastly across lenders, as it is highly dependent on your income profile, repayment capacity, and whether the loan includes construction plans. However, if you have a good understanding of your financial situation and repayment capabilities, a basic comparison can help you choose which bank is the best for you.
The best lender, however, is highly subjective to the individual borrower’s needs and financial situation.
Here’s a snapshot of plot loan rates from leading banks and NBFCs (as of 2025) that can aid you in your quest to find the best plot loan provider:
Top Banks for Plot Loans
Here is a list of the top banks in India and the starting point of interest rates for plot loans:
|
Bank Name |
Interest Rate (p.a.) |
Notes |
| State Bank of India (SBI) | 9.40% onwards | Linked to repo rate |
| HDFC Bank | 8.45% onwards | Based on the credit profile |
| ICICI Bank | 7.85% onwards* | Floating rate |
| Axis Bank | 8.75% onwards | Fixed and floating are available |
| Kotak Mahindra Bank | 8.20% onwards | Composite loan options are available |
| Bank of Baroda | 7.45% onwards* | Offers flexible tenure |
| Punjab National Bank (PNB) | 10.00% onwards | Higher for lower credit scores |
|
Union Bank of India | 7.45% onwards | Floating is linked to EBLR |
| Canara Bank | 7.50% onwards | Among the lowest starting rates, floating rates. |
| IDFC FIRST Bank | 10.25% onwards* | Repo-linked, high for some profiles |
| IndusInd Bank | 8.25% onwards | Subject to eligibility |
| Federal Bank | 8.80% onwards | Regional availability may vary |
| IDBI Bank | 6-8% onwards | Credit-linked pricing |
| RBL Bank | 9.00% onwards | Shorter tenure, flexible repayment |
| Indian Bank | 7.40% onwards | Usually under the home loan umbrella |
Note: The data presented is produced for understanding and comparing purposes alone and is mostly accurate. However, it is subject to change based on banks’ discretion. It is advised to use this information for understanding and to contact the respective lenders before proceeding with any loan options.
Although traditional banks are the most reliable option and the ones most people are comfortable with, they have their own downsides, such as delayed disbursal or tedious paperwork. In such cases, NBFCs can serve as an alternative, sometimes even better than traditional banks.
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Plot Loan Vs Home Loan Difference
Plot loans come with specific eligibility rules and higher scrutiny. While home loans include ready properties and even under-construction ones, plot loans strictly finance residential land within municipal limits.
Here’s a quick comparison to clarify:
| Feature | Plot Loan | Home Loan |
| Purpose | Purchase of residential land | Purchase/construction of a house |
| Property eligibility | Within a corporation/municipal area | Ready/under-construction properties |
| Loan-to-Value ratio (LTV) | Up to 80% | Up to 90% |
| Tenure | 10–15 years (typical) | Up to 30 years |
| Tax benefits | Not available unless construction begins | Available under Sec 24 & 80C |
The takeaway: While home loans do offer greater loan tenures and tax perks, plot loans give you greater flexibility to design or build on your own terms, making them ideal for long-term planning and custom construction.
Top Features & Benefits of a Plot Loan
There are obvious reasons why someone would choose a plot loan. When you apply for a loan for plot purchase, here’s what you can typically expect:
- Loan for residential land only (not commercial/agricultural)
- Funding for land from developers or authority-approved sellers
- LTV ratio up to 80%
- Quick approval for salaried and self-employed borrowers
- Some lenders offer combo loans (plot + construction)
- Tax benefits apply only if construction begins within a specified period
- EMI calculators are available online for planning repayments
Documents Needed for a Plot Loan
Different banks might have their own little tweaks, but generally, here’s what you’ll need:
- Proof of identity and address (like your Aadhaar, PAN, or passport)
- Income proof—think salary slips or your latest ITRs
- Property papers showing you actually own the plot or have an agreement
- Your last 6 months of bank statements
Having these ready upfront can really speed things up—and helps you compare offers from different banks without going back and forth.
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Plot Loan Tax Benefits
Here’s the deal: just buying land doesn’t get you any tax perks. But if you start building a home on that plot within a certain time, you could unlock benefits—like deductions under Section 24(b) for interest and Section 80C for principal repayment.
Pretty similar to a standard home loan.
So if you’re planning to build soon, that could change the game. Some banks even offer combo loans that cover both the plot and construction. Definitely something to think about when choosing the best bank for a plot loan.
Things to Consider Before Choosing a Plot Loan
There is something for you to look out for.
Don’t just go by the plot loan interest rate. Here are a few key considerations that you must have:
- Prepayment flexibility: Are there charges if you pay early?
- Hidden fees: Look for processing, legal, and technical charges.
- Tenure match: Can you choose a tenure that balances EMI and interest?
- Eligibility terms: Does your income profile suit their criteria?
Also, check your credit score beforehand—it heavily influences the deal you get. You can check your credit score for free on Buddy Score before applying.
Good News for NRIs or Joint Owners?Some banks, like SBI and HDFC, offer plot loans to NRIs, provided the land is bought within municipal zones. Also, joint applications (like spouses or co-owners) can enhance loan eligibility, especially if one of the applicants has a stable income. |
Can a Personal Loan Help with a Plot Purchase
Here’s a practical angle.
Banks typically finance up to 70–80% of the plot’s value. That means you still need to cover the margin money, registration charges, or brokerage—sometimes adding up to a few lakhs. In such cases, a personal loan can fill this gap.
While it’s not a substitute for a plot loan, it complements it.
Through platforms like Buddy Loan, you can apply for a personal loan instantly and connect with lenders based on your financial profile—without paperwork overload. Buddy Loan is not a lender but an aggregator platform that offers verified lenders in one place—so that you can compare and find out the best ones that match your needs.
Final Words – Don’t Just Compare Rates. Compare Value.
On the quest to search for which bank is best for a plot loan, you came across a lot of options. However, it is essential to recognise that the loan provider alone does not determine which bank is best for a plot loan. It depends on your finances and which bank offers the best loan, suited to your financial status and capacity.
Buying a plot is a step toward building your dream home. So yes, finding the best plot loan matters—but it’s more than just the rate. Flexibility, charges, and your ability to repay all play a part.
To make an informed decision:
- Use a plot loan EMI calculator
- Compare lenders’ terms
- Know your eligibility
- Explore hidden costs and additional charges
And if you need help in navigating lenders, visit Buddy Loan and explore loan options from verified partners. Whether it’s for margin funding or faster loan access, you can also download the Buddy Loan App for quick updates.
Remember—borrowing is easier when you’re well-informed.
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