India is the fourth largest economy in the world. However, our per capita income is lower despite our nation's ranking among the world economies. India's per capita income is, however, estimated to have gone up 11.7% to Rs. 5,729 per month for fiscal 2012-13, according to an article published in India Times in February 2013. So, India has the potential to grow when it comes to per capita income, but the pace is restricted. Buying power for Indians is also lower. Hence, loans have become very important to finance large expenses. Luckily, India is a big country and people like to possess land. Therefore, a loan against land is a great idea. It is also said to have the cheapest interest rates and people can use the loaned money for any purpose.There are a few things that you need to remember while deciding on taking a loan against land in India. Read on to know what they are.

Loan against Land: Points to Remember

The maximum amount for a loan against land varies from finance company to finance company. However, it may range anywhere between Rs.2 lakhs and Rs.100 lakhs. The exact amount of the loan is dependent on the evaluation of your property as well as your repayment capacity, including income. There are, however, some more things you should know:

• The rate of interest for loan against land is usually over 6.5%, although the company providing the loan may have its own criteria too.

 

• The maximum amount can be as much as 50% of the land value, if you have a commercial setup, and slightly more for non-commercial or residential land.

 

• One can repay up the loan amount over 15 years.

 

• When it comes to the maximum age of eligibility, the age is restricted to 60 years.

 

• Note that most financing companies would not accept land that is on lease.

 

• One could choose between fixed or floating rate of interest for repaying the loan.

 

• You can also choose pay the whole loan amount after 180 days of approval for a loan against land. This will help you release your land from the collateral status.

It would be a good idea to compare the quotations from various providers and see what suits you best. Loan against land is generally a great idea to finance your child's education or marriage, start a business, or invest on new property. As long the bank receives its money over the tenure of repayment, you will be worry-free.