Quick answer: A flat is easier to finance: LIC HFL lends up to 90% (80% above ₹30 lakh) over up to 30 years from 7.15%, while a plot loan covers up to 75% over 15 years from 7.35%. On ₹40 lakh, a flat needs about ₹11.2 lakh upfront and ₹25,099 EMI; a plot needs about ₹13.2 lakh and ₹27,555 EMI. A plot’s advantage: no condition to build and no GST.
By Vijay Arjun V (B.Pharm, PGDM), authorised LIC HFL DSA since 2002. LIC HFL terms and rates checked on lichousing.com on 9 October 2026.
Plot loan or home loan: how do they compare?
| Flat (home loan) | Plot (plot loan) | |
|---|---|---|
| Funding | Up to 90% (loans to ₹30 lakh), 80% (₹30–75 lakh), 75% above | Up to 75% of the plot value |
| Maximum term | 30 years (salaried), 25 years (self-employed) | 15 years |
| Rate from (CIBIL 825+) | 7.15% salaried, 7.30% self-employed | 7.35% salaried, 7.50% self-employed |
| GST | 5% on under-construction flats (1% affordable); none on ready or resale | None on land |
| Must you build? | Not applicable | No, for a plot-only loan |
| Tax benefits on the loan | Available on a house (old tax regime) | Not on an empty plot; available once you build with a home loan |
How much do you pay upfront and each month?
Both examples use a ₹40 lakh property in a municipal area, government charges of about 7.5% (plus a 0.1% mutation fee in GHMC) and mortgage registration of about 0.6% of the loan.
| ₹40 lakh | Flat | Plot |
|---|---|---|
| Loan | ₹32 lakh (80%) | ₹30 lakh (75%) |
| Down payment | ₹8 lakh | ₹10 lakh |
| Stamp duty, transfer duty, registration | ₹3 lakh | ₹3 lakh |
| Upfront, approx. | ₹11.2 lakh | ₹13.2 lakh |
| EMI | ₹25,099 (20 years at 7.15%) or ₹21,613 (30 years) | ₹27,555 (15 years at 7.35%) |
Under-construction flats also attract 5% GST on the price (about ₹2 lakh on ₹40 lakh). See the full plot purchase cost breakdown for Telangana charges.
When is a plot the better choice?
- You want land that appreciates and can wait to build
- You want to design your own house later; a construction loan can fund it when you are ready
- You can manage a higher down payment and a shorter, 15-year EMI
- You buy in an APF-approved HMDA venture: processing-fee discount, no legal and technical fee, and no condition to build. See the plot loan page.
When is a flat the better choice?
- You want to move in or earn rent soon
- You need the lowest down payment and the longest term to keep the EMI low
- You want the home-loan tax benefits now
- You prefer a project where the builder handles approvals; check the LIC HFL approved projects list.
Can I buy a plot now and build later with one loan?
Yes, with LIC HFL’s composite loan: it covers the plot and the construction, with a term of up to 30 years, but construction must be completed within 3 years of buying the plot. If you are not ready to build, take a plot-only loan now and a construction loan later. Read which plots banks will fund before you pay an advance.
Frequently asked questions
Is a plot loan interest rate higher than a home loan?
Slightly. On 9 October 2026, LIC HFL’s best plot loan rate was 7.35% against 7.15% for a home loan (salaried, CIBIL 825+).
Why does a plot need a bigger down payment?
LIC HFL funds up to 75% of a plot’s value, against up to 80–90% for a home, so you put in at least 25%.
Can NRIs take a plot loan?
Yes. LIC HFL’s plot loan is open to resident and non-resident Indians. See NRI home loans in Hyderabad.
How much can I borrow on my salary?
It depends on your income, existing EMIs and age. Try the eligibility calculator or ask us for a free check.
Next step: tell us your budget and whether you prefer a plot or a flat; we will show you both loan options side by side.
Sources: lichousing.com home loan and plot loan pages (funding limits, terms and rates, checked 9 October 2026); Telangana Registration & Stamps Department orders (2021). EMI and upfront figures are our calculations.
Hyderabad Home Loans is run by Elite Financial Services, an authorised Direct Selling Agent (DSA) of LIC Housing Finance Ltd. We are not LIC HFL. Loans are sanctioned solely at LIC HFL’s discretion; rates and fees may change.