Buying land to build a house? Take a composite loan

I work in Mumbai and have decided to buy a plot in Hyderabad. How do I go about obtaining this loan? Will the process be different because I am based in a different city?
To buy a piece of land to construct a house you can get a composite loan, based on your income and the title of the property. You can get a composite loan for purchase of plot and construction based on the cost estimate prepared by an architect and agreement for purchase of the plot. The plot should be non-agricultural and should have a clear title.

For composite loan you will have to give a concrete plan for commencing the construction on the plot. Please note that if you want to take a loan only to buy a plot (without any plan to construct), the loan terms are more restrictive and available only for non-agricultural plots bought from statutory authorities or developers approved by the specific lender.

Normally, lenders will not finance more than 60% to 65% of the total cost of the plot and the remaining 35% to 40% has to come from your own sources. They are also more expensive and available for shorter period of 5-7 years. It is advisable to take a loan from a bank, which has branches in both the cities so that the servicing of the loan becomes easier.

The writer is CEO, ApnaPaisa, a price & features comparison engine for loans, insurance and investments.
He can be reached at hrdna@apnapaisa.com.