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Purchasing a plot of land is an important step toward building your dream home. Canara Bank offers a Plot Loan specifically designed to help customers finance the purchase of residential plots. Whether you’re buying land directly from government development authorities or through a second sale in approved colonies, Canara Bank provides competitive interest rates and flexible repayment options to suit your needs.
In this blog, we will explore the key benefits, eligibility criteria, and essential details about Canara Bank’s Plot Loan, helping you make an informed decision about financing your property purchase.
Key Benefits of Canara Bank Plot Loan
1. Purchase of Residential Sites
It allows you to purchase residential plots from government development authorities, town planning bodies, and statutory authorities, as well as in RERA-approved projects.
2. Lower Interest Rates
Canara Bank offers attractive interest rates starting at 9.25%, making it an affordable option for borrowers looking to purchase a plot.
3. Reducing Balance Interest Rate
The interest is calculated on a reducing balance basis, which means you only pay interest on the outstanding loan amount, leading to significant savings over the loan tenure.
4. No Prepayment Penalty
You can prepay your plot loan at any time without incurring any penalty fees, allowing you to close your loan early and save on interest.
5. Minimal Processing Charges
Canara Bank charges a nominal processing fee of 0.50% on the loan amount, with a minimum of ₹1,500 and a maximum of ₹10,000, making the application process affordable and accessible.
Purpose of the Canara Bank Plot Loan
The loan can be used to purchase residential plots from:
- Government Development Authorities like DDA, HUDA, etc.
- Town Planning Development Authorities or bodies constituted by the government for site distribution.
- Statutory Authorities (either exclusively or in partnership with the private sector) provided the sites/layouts are approved by state government authorities.
- Takeover of Loans: The loan can also be used to take over plot loans from other banks, provided the purpose of the previous loan aligns with Canara Bank’s guidelines.
Loan Quantum and Margin Requirements
- Loan Amount:
The loan quantum is based on either three years of gross annual salary/income or 75% of the plot’s cost or guideline value, whichever is lower. - Margin:
Borrowers need to maintain a minimum margin of 25% on the project cost, including the site cost and any additional development charges, supported by documentary evidence.
Repayment Tenure and Conditions
- Tenure:
The repayment period for Canara Bank’s Plot Loan is a maximum of 10 years or the period specified by the allotment agency for house construction. The loan must be closed by the time the borrower turns 65, whichever comes first. - Security:
A mortgage of the residential plot is required as security for the loan, and a personal guarantee or co-obligation with adequate net worth may also be insisted upon.
Processing and Documentation Charges
- Processing Fee:
A nominal processing charge of 0.50% of the loan amount is applicable, with a minimum of ₹1,500 and a maximum of ₹10,000. - Documentation Charges:
₹100 per lakh of the loan amount, with a minimum of ₹1,000 and a maximum of ₹25,000.
Eligibility Criteria for Canara Bank Plot Loan
Meet the following criteria to be eligible for the Canara Bank Plot Loan:
1. Existing Customers:
Must have satisfactory dealings with Canara Bank.
2. New Customers:
Must be creditworthy and properly introduced to the bank.
3. Age Limit:
The applicant should be under 60 years of age at the time of applying for the loan.
4. NRIs:
Non-resident Indians are also eligible for the Canara Bank Plot Loan.
5. Employees:
Employees of Canara Bank are also eligible to apply for this loan.
Required Documents for Canara Bank Plot Loan
- Loan Application: Duly filled application form with passport-sized photos of the applicant and co-applicants.
- KYC Documents: Proof of identity (PAN card, voter ID, passport, Aadhar, etc.) and proof of residence (driving license, Aadhar, electricity bill, etc.).
- Income Proof:
- For salaried individuals: Latest salary certificates and Form 16 for the past 6 months.
- For self-employed individuals: Latest IT returns, business proof, and profit & loss accounts.
- Property Documents: Layout/site plan issued by development authorities and the allotment letter.
- Legal Scrutiny Report: A report from the bank’s panel advocate.
- Additional Documents: Any other documents as required by the bank.
Conclusion
Canara Bank’s Plot Loan is an excellent financing option for individuals looking to purchase residential plots from government or statutory authorities. With competitive interest rates, a flexible repayment period, and minimal processing charges, the loan offers a convenient and affordable way to finance your land purchase. If you’re ready to invest in your dream property, Canara Bank’s Plot Loan can help make it a reality.
For personalized advice on plot loans and other financial solutions, contact Credit Dharma today for expert guidance.
Frequently Asked Questions
Canara Bank designs Plot Loans to help individuals finance the purchase of residential plots from government or statutory development authorities. It offers competitive interest rates and flexible repayment options.
The interest rate starts at 9.25% and varies based on factors like loan amount and tenure.
Yes, NRIs are eligible to apply for a Canara Bank Plot Loan, subject to fulfilling the required criteria.
The loan amount is the lesser of 75% of the plot’s value or three years’ gross annual income.
No, Canara Bank does not charge any prepayment penalty, allowing you to close your loan early without extra fees.
The repayment tenure can be up to 10 years or the maximum period permitted by the allotment agency for house construction, whichever is earlier.
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