Loan Against Land and Plot

A loan against land lets you mortgage a plot you already own to raise funds, without selling it. However, this is different from a plot loan, which helps you buy land. Moreover, lenders do fund residential, commercial and NA (non-agricultural) plots, and some fund vacant land, but usually at a lower loan-to-value than a built-up house, because an empty plot is harder to value and sell.

Loan Against Land vs Plot Loan

Point	Loan against land	Plot purchase loan
Purpose	Any need: business, education, debt payoff	Only to buy a plot
Who owns the land	You already own it	You are buying it
Security	Your existing land	The plot being bought
End use check	Flexible	Strict

Which Land Can You Mortgage?

• Residential plot in an approved layout: most lenders accept it
• Commercial plot or site: many banks and NBFCs accept it
• NA plot (converted for non-agricultural use): lenders accept it with conversion papers
• Vacant or open land: fewer lenders accept it, and at a lower LTV
• Agricultural land: on the other hand, usually only through agriculture loans or select lenders, under separate rules

Interest Rate on Loan Against Land

In general, rates on a loan against plot are usually a little higher than on a house or flat, because the lender sees more risk in vacant land. In the end, your final rate depends on the plot’s location, title, your income and your CIBIL score. Compare current ranges on our loan against property interest rates page.

Documents Required to Mortgage Your Plot

• First, the registered sale deed and previous title chain
• Also, the mutation entry or khatauni / jamabandi record in your name
• In addition, the approved layout or site plan, and NA conversion order where applicable
• Then, the latest property tax receipt and encumbrance certificate
• Finally, KYC and income proof, as in our documents checklist

Tips to Get a Better Deal

• First, complete the mutation in your name before applying.
• Also, fence the plot and keep boundaries clear for the valuer.
• In addition, add a co-applicant with steady income.
• Finally, compare at least three banks or RBI-registered NBFCs before choosing.

Frequently Asked Questions

Can I get a loan against an empty plot?

Yes, as long as the title is clear and the plot is in an approved or acceptable area. However, expect a lower loan amount than for a built house.

Can I mortgage agricultural land?

Lenders mostly finance agricultural land through agriculture loans such as crop or Kisan Credit Card loans. Therefore, few lenders offer a general loan on it.

Is a loan against land the same as a mortgage loan?

Yes. It is a type of mortgage loan where your plot is the security.

Disclaimer: We are a loan advisory service, not a bank or NBFC. Instead, the lender alone decides loan approval, amount, interest rate and terms.