{"id":6969,"date":"2023-08-29T01:33:10","date_gmt":"2023-08-29T01:33:10","guid":{"rendered":"\/blog\/?p=6969"},"modified":"2026-01-08T12:47:16","modified_gmt":"2026-01-08T07:17:16","slug":"difference-between-a-home-loan-and-a-plot-loan","status":"publish","type":"post","link":"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/","title":{"rendered":"Difference Between a Home Loan and a Plot Loan"},"content":{"rendered":"\n<p><\/p>\n\n\n\n<p>A home is more than just a roof on the head. It\u2019s a place you live your best memories in and a habitat you look up to every day to unwind after a tiring day at work. And this is what makes owning a home a dream for many. If you have decided to turn this dream into a reality, note that your housing finance needs will differ depending on what part of the country you are planning to buy your dream home in.<\/p>\n\n\n\n<p>With expensive real estate in metros and megacities, high rises and building complexes are the only affordable option. However; in smaller cities and semi-urban areas, standalone houses and multi-storey bungalows are common.<\/p>\n\n\n\n<p>Even though you are buying a property in both instances, there is a difference in how financing works for an apartment\/<a href=\"https:\/\/www.tatacapital.com\/home-loan.html\">home loan<\/a> and a land\/<a href=\"https:\/\/www.tatacapital.com\/home-loan\/self-construction.html\">plot loan<\/a>.<\/p>\n\n\n\n<p>Here is a quick look at the differences between the two:<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>&nbsp;<\/td><td>Home Loan<\/td><td>Plot Loan<\/td><\/tr><tr><td>Purpose<\/td><td>To purchase an under construction or built-up home.<\/td><td>To purchase a plot of land for residential use.<\/td><\/tr><tr><td>Categories<\/td><td>Can be a loan for an apartment, bungalow or any residential unit.<\/td><td>Exclusively for a piece of land.<\/td><\/tr><tr><td>Loan to value ratio<\/td><td>Housing loans range from 70% \u2013 95% of the property value.<\/td><td>Loans capped at 70% of the land value.<\/td><\/tr><tr><td>Fixed income eligibility<\/td><td>Usually between 40% to 55% of the your (borrower\u2019s) income.<\/td><td>Does not go beyond 30% to 40% of the your (borrower\u2019s) income.<\/td><\/tr><tr><td>Interest rate<\/td><td>Home loan interest rates start from 8.25% onward.<\/td><td>Plot loan interest rates start from 8.95% onward.<\/td><\/tr><tr><td>Loan tenure<\/td><td>Can go up to 30 years.<\/td><td>Capped at 15 years, except loans from some NBFCs available for 20 years.<\/td><\/tr><tr><td>Risk assessment of loan<\/td><td>Medium<\/td><td>High<\/td><\/tr><tr><td>Tax benefit<\/td><td>Tax benefits available on both repayment of principal and interest.<\/td><td>Tax benefit available only on loan for construction.<\/td><\/tr><tr><td>Availability of tax benefit<\/td><td>Every financial year until the loan is repaid.<\/td><td>Only after the entire construction is complete.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Plot loans are considered to be riskier than standard home loan; therefore, the loan value tends to be marginally lower and interest a little higher. If you want to assess your budget accurately, you can use an <a href=\"https:\/\/www.tatacapital.com\/home-loan\/emi-calculator.html\">EMI calculator for home loan<\/a> to see which property fits your pocket better.<\/p>\n\n\n\n<p>Whatever your <a href=\"https:\/\/www.tatacapital.com\/wealth.html\">investment<\/a> needs are, <a href=\"https:\/\/www.tatacapital.com\/\">Tata Capital<\/a> has a loan for you. Whether you are looking to buy an apartment, plot of land, extend your home, get construction done or transfer the property, Tata Capital offers easy to secure <a href=\"https:\/\/www.tatacapital.com\/personal-loan.html\">loans<\/a> at attractive interest rates.<\/p>\n\n\n\n<p>The scale-up EMI option allows you to pay more as your income grows. A host of tools and home loan EMI calculator make it easy and transparent for you to plan for the future.<\/p>\n\n\n\n<p>Although there are certain differences between the two, the procedure for application, required documents, criteria for plot loan and <a href=\"https:\/\/www.tatacapital.com\/home-loan\/home-loan-eligibility-calculator.html\">home loan eligibility<\/a> are the same.<\/p>\n\n\n\n<p>Understand your eligibility better with the home loan calculator and make your dream home a reality.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to Choose Between a Plot Loan and Home Loan<\/h2>\n\n\n\n<p>Choosing between a plot loan and a home loan depends primarily on your immediate housing goal. While both help you invest in property, they serve very different purposes and come with distinct financial implications.<\/p>\n\n\n\n<p>Here\u2019s what you should keep in mind before deciding:<\/p>\n\n\n\n<p>1. Purpose of purchase: A plot loan is suitable if you want to buy land for future construction or long-term holding. A home loan works better if you want a ready home or plan to start construction immediately.<\/p>\n\n\n\n<p>2. Loan tenure and affordability: Plot loans usually come with shorter tenures and higher EMIs, while <a href=\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/detailed-guide-on-how-home-loan-repayment-works\/\">home loans offer longer repayment periods<\/a>, making monthly outgo more manageable.<\/p>\n\n\n\n<p>3. Loan amount eligibility: You generally receive a lower loan amount for land compared to a built property due to higher risk perception.<\/p>\n\n\n\n<p>4. Tax benefits: Home loans offer immediate tax deductions, while plot loans provide tax benefits only after construction is completed.<\/p>\n\n\n\n<p>5. Location restrictions: Plot loans are typically approved only for residential plots within municipal or development authority limits.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Plot Loan vs Home Loan: Eligibility Comparison<\/h2>\n\n\n\n<p>While both plot loans and home loans assess your income, age, and credit profile, lenders apply stricter norms to plot loans. This is mainly because undeveloped land carries higher risk compared to a completed residential property.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Feature<\/td><td>Plot Loan<\/td><td>Home Loan<\/td><\/tr><tr><td>Loan-to-Value (LTV)<\/td><td>60%-75% of land value<\/td><td>80%-90% of property value<\/td><\/tr><tr><td>Maximum tenure<\/td><td>Up to 15 years (some lenders up to 20)<\/td><td>Up to 30 years<\/td><\/tr><tr><td>Interest rate<\/td><td>Usually 0.5%-1% higher<\/td><td>Lower, market-linked rates<\/td><\/tr><tr><td>Tax benefits<\/td><td>Only after construction<\/td><td>Available immediately<\/td><\/tr><tr><td>Property eligibility<\/td><td>Residential plots within municipal limits<\/td><td>Ready or under-construction homes<\/td><\/tr><tr><td>NRI eligibility<\/td><td>Often restricted<\/td><td>Widely available<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Plot Loan vs Home Loan: Documentary Requirements<\/h2>\n\n\n\n<p>The basic personal and financial <a href=\"https:\/\/www.tatacapital.com\/home-loan\/document-required.html\">documents required for both loans<\/a> are similar. However, property-related documentation differs significantly because lenders assess risk differently for land and built properties.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Documents required for plot loan<\/h3>\n\n\n\n<p>To approve a plot loan, lenders verify that the land is legally eligible for residential construction. You are typically required to submit:<\/p>\n\n\n\n<p>&#8211; Sale deed or title deed showing clear ownership<\/p>\n\n\n\n<p>&#8211; Non-encumbrance certificate confirming no legal dues or disputes<\/p>\n\n\n\n<p>&#8211; Approved layout or zoning plan from the local authority<\/p>\n\n\n\n<p>&#8211; Proof that the plot falls within municipal or development authority limits<\/p>\n\n\n\n<p>&#8211; Non-agricultural (NA) conversion certificate, where applicable<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Documents required for home loan<\/h3>\n\n\n\n<p>For a home loan, lenders assess the status and legality of the residential structure. Commonly required documents include:<\/p>\n\n\n\n<p>&#8211; Sale deed (for resale property) or builder-buyer agreement (for new projects)<\/p>\n\n\n\n<p>&#8211; Approved building plan sanctioned by the local authority<\/p>\n\n\n\n<p>&#8211; Occupancy Certificate (OC) or Completion Certificate (CC) for newly constructed homes<\/p>\n\n\n\n<p>&#8211; Possession letter from the builder, if applicable<\/p>\n\n\n\n<p>&#8211; Property tax receipts or utility bills as proof of possession<\/p>\n\n\n\n<p><\/p>\n\n\n\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-vivid-cyan-blue-background-color has-background wp-element-button\" href=\"https:\/\/www.tatacapital.com\/home-loan.html\">Apply for Housing Loan<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>A home is more than just a roof on the head. It&#8217;s a place you live your best memories in and a habitat you look up to every day to unwind after a tiring day at work.  <\/p>\n<p><a href=\"https:\/\/www.tatacapital.com\/blog\/home-loan\/difference-between-a-home-loan-and-a-plot-loan\/\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":6970,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[25],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Plot Loan vs Home Loan: Key Differences &amp; How to Choose | Tata Capital<\/title>\n<meta name=\"description\" content=\"Plot Loan vs Home Loan: Compare purpose, interest rates, eligibility &amp; tenure to choose the right finance for your property goals. Learn more at Tata Capital.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Plot Loan vs Home Loan: Key Differences &amp; How to Choose | Tata Capital\" \/>\n<meta property=\"og:description\" content=\"Plot Loan vs Home Loan: Compare purpose, interest rates, eligibility &amp; tenure to choose the right finance for your property goals. Learn more at Tata Capital.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/\" \/>\n<meta property=\"og:site_name\" content=\"TATA Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-29T01:33:10+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-01-08T07:17:16+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/02\/difference-between-a-home-loan-and-a-plot-loan.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"770\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Tata Capital\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Tata Capital\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/\",\"name\":\"Plot Loan vs Home Loan: Key Differences & How to Choose | Tata Capital\",\"isPartOf\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\"},\"datePublished\":\"2023-08-29T01:33:10+00:00\",\"dateModified\":\"2026-01-08T07:17:16+00:00\",\"author\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/aa0e5e1ada965b44443a1a78f968ed5c\"},\"description\":\"Plot Loan vs Home Loan: Compare purpose, interest rates, eligibility & tenure to choose the right finance for your property goals. Learn more at Tata Capital.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.tatacapital.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Difference Between a Home Loan and a Plot Loan\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/\",\"name\":\"TATA Capital Blog\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.tatacapital.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/aa0e5e1ada965b44443a1a78f968ed5c\",\"name\":\"Tata Capital\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/0e9e78de7f84add076f397dd13acc708?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/0e9e78de7f84add076f397dd13acc708?s=96&d=mm&r=g\",\"caption\":\"Tata Capital\"},\"sameAs\":[\"https:\/\/www.tatacapital.com\/blog\"],\"url\":\"https:\/\/www.tatacapital.com\/blog\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Plot Loan vs Home Loan: Key Differences & How to Choose | Tata Capital","description":"Plot Loan vs Home Loan: Compare purpose, interest rates, eligibility & tenure to choose the right finance for your property goals. Learn more at Tata Capital.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"og_locale":"en_US","og_type":"article","og_title":"Plot Loan vs Home Loan: Key Differences & How to Choose | Tata Capital","og_description":"Plot Loan vs Home Loan: Compare purpose, interest rates, eligibility & tenure to choose the right finance for your property goals. Learn more at Tata Capital.","og_url":"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/","og_site_name":"TATA Capital Blog","article_published_time":"2023-08-29T01:33:10+00:00","article_modified_time":"2026-01-08T07:17:16+00:00","og_image":[{"width":770,"height":400,"url":"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/02\/difference-between-a-home-loan-and-a-plot-loan.jpg","type":"image\/jpeg"}],"author":"Tata Capital","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Tata Capital","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/","url":"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/","name":"Plot Loan vs Home Loan: Key Differences & How to Choose | Tata Capital","isPartOf":{"@id":"https:\/\/www.tatacapital.com\/blog\/#website"},"datePublished":"2023-08-29T01:33:10+00:00","dateModified":"2026-01-08T07:17:16+00:00","author":{"@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/aa0e5e1ada965b44443a1a78f968ed5c"},"description":"Plot Loan vs Home Loan: Compare purpose, interest rates, eligibility & tenure to choose the right finance for your property goals. Learn more at Tata Capital.","breadcrumb":{"@id":"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.tatacapital.com\/blog\/loan-for-home\/difference-between-a-home-loan-and-a-plot-loan\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.tatacapital.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Difference Between a Home Loan and a Plot Loan"}]},{"@type":"WebSite","@id":"https:\/\/www.tatacapital.com\/blog\/#website","url":"https:\/\/www.tatacapital.com\/blog\/","name":"TATA Capital Blog","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.tatacapital.com\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/aa0e5e1ada965b44443a1a78f968ed5c","name":"Tata Capital","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/0e9e78de7f84add076f397dd13acc708?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/0e9e78de7f84add076f397dd13acc708?s=96&d=mm&r=g","caption":"Tata Capital"},"sameAs":["https:\/\/www.tatacapital.com\/blog"],"url":"https:\/\/www.tatacapital.com\/blog\/author\/admin\/"}]}},"featured_image_url":"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/02\/difference-between-a-home-loan-and-a-plot-loan.jpg","_links":{"self":[{"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/posts\/6969"}],"collection":[{"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/comments?post=6969"}],"version-history":[{"count":7,"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/posts\/6969\/revisions"}],"predecessor-version":[{"id":52475,"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/posts\/6969\/revisions\/52475"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/media\/6970"}],"wp:attachment":[{"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/media?parent=6969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/categories?post=6969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tatacapital.com\/blog\/wp-json\/wp\/v2\/tags?post=6969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}