Most banks offer land loans as long as they are purchased exclusively for residential purposes.

Investing in a plot of land and constructing a house can often work out to be a less expensive option for a homeowner. You can claim tax benefits for the construction of your house.

In order to avail a land loan, you will need a variety of legal documents. It is prudent to hire the services of a lawyer to ensure that the property is free from dispute. The lender will also ask for things such as original ownership documents of the land, tax receipts and other records. Make sure you have all of this in order before you approach a bank for a land loan.

Some banks also have self-imposed restrictions like they may want the land to be within the municipal limits or put down a clause that compels a borrower to begin construction of the house within six months of the property purchase.