is generally for commercial purposes whereas home loan is for personal use. These loans are offered by banks and other financial institutions.
One of the major advantages of these loans is that they help you to buy a property without having to sell your existing one or even have any collateral. Land Loan allows you to purchase a LDA approved plot in Lucknow, build your own house on it.
However, there are certain limitations in terms of interest rates which must be taken care of before availing this type of loan. Also, the amount offered by such banks is usually lower than what can be obtained from home loans as they do not consider any collateral while calculating the interest rate.
Land Loan Vs Home Loan: What Is the Difference?
The difference between a home loan and a land loan is that the latter refers to a mortgage loan for real estate. Land loans can be used for purchasing property, or for building new homes. Home loans are usually given to people who want to buy a home but do not have enough cash to do so. Land loans are offered by banks and other financial institutions, while home loans are usually granted by financial institutions such as banks, credit unions and other financial institutions.
A loan for plots in Lucknow is a type of mortgage that allows individuals or businesses to borrow money in order to buy real estate. Land loans can be used for purchasing property, or for building new homes. Home loans are usually given to people who want to buy a home but do not have enough cash to do so. Land loans are offered by banks and other financial institutions, while home loans are usually granted by financial institutions such as banks, credit unions and other financial institutions.
Before you apply for one of the two loans, consider the following points of difference:
Location
There is a big difference in the interest rates of home loans and land loans. The rate of interest on a home loan is typically higher than that for a land loan. This is because the price of property has increased, so the loan size has to be larger to cover the cost of building, as well as the interest.
Tax Benefits
If you own a property through a company or trust, it can reduce your taxable income and therefore reduce your tax bill. However, this will not apply if you take out a loan from a bank or other financial institution.
Loan-to-Value (LTV)/Loan-to-Cost (LCR) Ratio
A higher LTV ratio means that less equity is required to obtain a loan for your purchase of property. In contrast, a lower LTV ratio means that more equity will be needed to obtain a loan for your purchase of property. If you are planning on selling your property again in the future, having sufficient equity would help reduce risk and ensure that there is no loss on resale value when selling at market value later on down the track.