You may have your heart set on buying land to build a house on, develop a project, or just to keep in the family. Coming up with the funds to purchase the land can be problematic. That’s where personal loans to buy land come in.
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Once you have found the perfect piece of land in an ideal
location, it’s time to figure out how to pay for it. If you don't want to
deplete your savings, sell off your stocks, or get a home equity loan, then
consider a personal loan for land purchase. Personal loans to buy land can be
found online, at your bank, or credit union, and don’t require any collateral
or equity. Our team of financial experts reviewed and ranked more than 30
online lenders to help you get funded.
Best Personal Loans to Buy Land in 2023 - Full Overview
LightStream — Best for Competitive Rates
LightStream is an online lender that specializes in making the loan process seamless and straightforward for its borrowers. It works mostly with borrowers with good credit, great credit, or excellent credit. It’s a division of Truist which was a merger of Sun Trust Bank and BB&T so its borrowers benefit from years of experience and banking products and services. Personal loans are unsecured and can be used to purchase just about anything legal, including land.
LightStream offers personal loans to buy land with rates ranging from 4.99% to 16.99%. Rates are typically on the higher end of the range if you want a larger loan amount. Loan limits go up to $100,000 so you could use the funds as a downpayment on a piece of land or to purchase the entire piece of land. Loan terms range from 2 to 20 years and a minimum credit score of 680 is required to qualify for a loan.
The Bottom Line
If you’re looking for personal loans to buy land, LightStream is a good option for borrowers with good or excellent credit scores. The company offers competitive interest rates and rewards its borrowers with discounts and perks. The application process is also easy and funding is fast.
Formerly known as Quicken Loans, Rocket Loans is an online loan marketplace that offers mortgages, personal loans, home improvement loans, and more. It has instant loan offers, pages of loan resources and tools, and offers fast funding on its personal loans.
Rocket Loans offers land loans as personal loans with loan limits that range from $2,000 to $45,000. Terms are either three or five years and rates and fees vary. A minimum credit score isn’t disclosed but the company does check your credit, income, and overall financial profile. The company also offers mortgages and loans for a multitude of things on the same platform.
The Bottom Line
Rocket Loans is a good choice for a personal loan to buy land if you want a reputable company that has an easy to use website and offers different loan options. They also have an extensive learning center so you can read about loan types, how they work, borrower stories, and really know what to expect before you get your land loan.
Upgrade offers personal loans that can be used for a variety of purposes including to purchase land. Approvals are typically done in just a few minutes and they offer various discounts to their borrowers. They also have banking services and lines of credit available so you can browse different products on the same site. They have free credit score monitoring and other credit health tools, as well as a help center to answer loan related questions.
Upgrade offers personal loans that can be used to buy land and don’t require any collateral or equity. They offer these loans to borrowers with varying credit tiers and focus on fast funding and a quick approval process. A minimum credit score of 560 is required and loan terms are either three or five years. Rates range from 5.94% to 35.97% and loan amounts range from $1,000 to $50,000.
The Bottom Line
Upgrade is a solid choice if you’re looking for a personal loan to fund your land purchase. The company’s credit score minimum is on the lower side, the application process can be done online, and they offer borrower discounts for autopay and using one of their checking accounts.
Best Egg offers its land loans in the form of personal loans going up to $50,000. They’re known for their quick rate checks and fast loan approvals. The company is set up as a lending platform aimed at making money and lending more accessible for the masses and not just the elite.
Interest rates for personal loans to buy land range from 5.99% to 35.99% at Best Egg. Typically, higher loan amounts receive higher rates. Loan amounts range from $2,000 to $50,000 and terms are for either three or five years. The lender considers the borrower’s overall financial situation and not just their credit score.
The Bottom Line
Best Egg is a valid option if you’re looking for personal loans to buy land and are in a hurry. They offer quick rate checks so you know what interest rate to expect on your loan. They also offer a smooth online application process and fast funding times.
AmOne is a lending platform designed to help consumers compare and contrast loan options. It’s set up as a one-stop-shop and offers personal loans, as well as loan calculators, and information on financial terms and loans. It has live loan experts and its personal loans can be used for a variety of uses including debt consolidation and land purchases.
AmOne offers its land loans as personal loans. These personal loans are categorized and consist of things like home improvement, debt consolidation, emergency, business, and auto. Personal loan requirements vary by lender, as do interest rates, and loan terms. The loan limit is $50,000.
The Bottom Line
AmOne is a good option if you’re looking for a personal loan to purchase land and want to easily compare loans on one platform, saving time, and potentially money. The application forms are simple, you get matched to lending partners, and can compare and choose the loan that best suits your needs.
NetCredit offers flexible funding options and educational resources on its site. Personal loans are offered up to $10,000 and lines of credit go up to $4,500. You can quickly check your eligibility online with only a soft-pull on your credit. One you find out if you’re eligible, you fill out a short application, and customize the amount you want to borrow and your repayment schedule.
NetCredit’s loan requirements and criteria vary by state. Their minimum credit score isn’t disclosed for a personal loan, but they do check your credit, income, employment history, and debt-to-income. Their personal loan terms range from one to five years and their loan amounts range from $1,000 to $10,000.
The Bottom Line
If you want a small loan, NetCredit is a good lender to check out. They offer personal loans and lines of credit and work with borrowers with varying credit tiers. They offer fast funding times and easy application processes but have low loan limits so you will need to have additional financing or cash saved to purchase land.
Figure offers a 100% online application that just takes a few minutes to complete. It’s designed to be a simpler and faster way to find a loan. There are different loan products including home equity loans, personal loans, crypto mortgages, and traditional mortgages. You can find your rate at the click of a button and there personal loans go up to $50,000.
Figure offers a variety of loans on its site and these include personal loans which can go towards your land purchase. The terms are for three or five years and loan amounts range from $5,000 to $50,000. Interest rates range from 5.75% to 31.44% and are based on the borrower’s credit profile as well as the loan amount.
The Bottom Line
Figure is a good contender when it comes to personal loans to buy land. They offer multiple different types of loans that could possibly be combined to purchase land. They have a speedy application process and discounts for things like auto pay.
When buying land with a personal loan, you will want to keep a few things in mind. It’s important to compare apples to apples, so you need to know the rates, terms, fees, and qualifications for all of the personal loans to buy land. Our experts used these important parameters and more to rank the lenders.
Consider the following factors
Loan Features: Keep in mind the loan terms, loan amounts, and loan use limitations. Make sure that you’re allowed to use the personal loan to purchase land. Land prices vary but know what the loan limits are to see if you can borrow enough to buy the plot of land you want.
Interest rates and fees - Considers different types of fees including application fees, origination fees, and prepayment penalties. You should also know the minimum and maximum interest rates and what rate you will qualify for.
Application process - Be aware of the invasiveness of the loan application process. What are the information requirements? Does the lender do a hard or soft-credit pull? How long does it take to apply, get approved, and get funded? Are there any distinctively competitive offerings?
Qualification process - Each lender has their own qualification process. Know the minimum credit score, income requirements, co-signer/joint application optionality, or membership requirements. You don’t want to waste time applying if you don’t meet all of the criteria.
Customer support - Consider accessibility to a live CSR rep, the degree of multi-channel support, and the availability of supplemental information and tools. Make sure that you can get your questions answered when it is convenient for you.
Online user reviews - Check out reviews on independent review sites like Trustpilot and see what real customers are saying about their experience with the lender. Did they encounter any problems? What are overall positive and negative comments saying?
Perks and Bonuses - Consider specified service offerings like payment flexibility, advertising transparency, and advanced technology. Does the lender offer anything else that is of interest?
Best Personal Loans to Buy Land - Feature Comparison
Min. credit score
4.99% - 16.99%
Up to $100,000
$2,000 - $45,000
3 or 5 years
5.94% - 35.97%
$1,000 - $50,000
3 or 5 years
5.99% to 35.99%
$2.000 - $50,000
3 or 5 years
Up to $50,000
Varies by lender
Varies by state
$1,000 - $10,000
1 - 5 years
5.75% - 31.44%
$5,000 - $50,000
3 - 5 years
Can You Use a Personal Loan to Buy Land?
The answer to can you use a personal loan to buy land, is typically yes. The majority of personal loans can be used for practically any purpose which means they can be used to purchase land. Loan amounts vary and can range anywhere from $1,000 to $100,000, but most are capped around $50,000. Rates also vary but are generally between 5% and 35% depending on your credit score. Loan terms vary by lender but are typically between two and five years.
How To Buy Land With A Personal Loan
Now you know the answer to, Can I get a personal loan to buy land, is yes. You need to know the step-by-step process of how to do it.
Prepare: Know your credit score, and have your documents handy and organized. You will need proof of identification, proof of employment, and you may also need pay stubs, tax returns, and bank statements.
Budget: How much can you afford to spend? Think about the total cost of the land, the loan fees, and what you can afford to pay monthly. Don’t forget the ongoing land costs such as utilities, insurance, and any building costs.
Compare: Know what each lender offers so you can compare their fees, loan application process, funding time, interest rates, and terms.
Apply: How do you apply? Can you apply online, in a branch, or over-the-phone? Know how intensive the application process is, what documents are needed, and approximately how long it will take.
Funded: Once your loan application is accepted, how long does it take to get funding? And how will you receive the funds? Lenders usually directly deposit the money into your account through a wire and others will give you a check.
Purchase land: Put the funds towards purchasing the land you want. Know how much not just the land is going to cost, but any additional fees such as appraisals, inspections, and surveys.
Pros And Cons Of Using A Personal Loan to Buy Land
The advantages and disadvantages of using a personal loan to purchase land are:
Pros of Using A Personal Loan to Buy Land
Easy application process: usually seamless and online
Fast funding: As fast as the same day you’re approved
No collateral or equity needed to qualify
Cons of Using A Personal Loan to Buy Land
Low loan limits: May only go up to $50,000 or max $100,000
Higher interest rates overall
Lower credit scores may only qualify for small loan amounts
Personal Loans vs. Land Loans vs. Construction Loans
Personal loans, land loans, and construction loans can all be used to purchase land. They do have some similarities but have a lot of differences too.
Personal loans are unsecured loans that can be used for almost any purpose. You typically apply online in a few minutes, get a quick approval based on your credit score and financial profile, and you will receive fast funding. Unlike land and construction loans, personal loans don’t require any collateral. They are more multi-purpose and can be used for things besides land, such as paying for an emergency repair, medical bills, or even a family vacation.
Land loans, as the name suggests, are specialty types of loans used specifically to purchase land. They’re also called lot loans. Unlike personal loans, you do need the land as collateral for a land loan, and the land must qualify, just as the borrower needs to qualify. The application process is more in-depth than with a personal loan and you will need a purchase contract in place for the land. Land loans typically have lower rates than personal loans, but require more paperwork, and take longer to fund.
Popular types of land loans include:
Raw land loans: A loan for completely undeveloped land that doesn’t include any roads, electricity, or a sewer system. You will need to have a plan for what you’re going to do with the land and specifically draw out how it’s going to be developed.
Unimproved land loans: These loans are for land that is slightly more developed than raw land. These types of loans can be used to finance land that may have some utilities or amenities but not all of them.
Improved land loans: These are typically the easiest to qualify for and are used to purchase land that already has road access, electricity, and water. This land is considered to be developed and poses less risk for the lender so rates and down payments are lower than for other types of land loans.
Construction loans are another option for purchasing land. They’re easier to qualify for than unimproved or raw land loans. They’re used to purchase the land and to finance the construction of whatever is going to be built on the land. These loans are typically short-term with one or two year terms and then are refinanced into longer-term loans once construction is finished. This type of loan can help you afford the construction costs of the loan, but it’s not a long term solution.
Other Alternatives To Buying Land With A Personal Loan
Here are a few alternatives to consider instead of using personal loans to buy land:
USDA loans are offered to rural property owners by the United States Department of Agriculture. These may be used to purchase land, a farm, land with a house or barns, or to build on, among other property types. They’re designed to improve the quality of life in rural areas and offer zero down payment options to qualified individuals. Keep in mind, there are strict borrower income qualifications and you must be in what is considered a ‘rural’ area, so no, you can’t purchase a suburban farm style house with one of these loans. However, if you do qualify, you can get a competitive rate and even finance the construction of your new home with a long-term loan.
Public or private non-profit organizations can also use USDA loans. Section 523 loans can be used to develop land for low-income families that are participating in the mutual self-help program. Section 524 loans can be used to develop low and moderate-income families.
Home Equity Loans
A home equity loan, also referred to as a second mortgage, is a home loan that you can apply for at your bank, credit union, or some online lenders. The loan allows you to borrow against the equity in your house and you get the funds all at once in a lump sum. You do need to meet the lender’s qualifications and have enough equity in your home to qualify. Funding may take 30-45 days so if you need quick money, this may not be the best option. However, rates are more competitive than those of personal loans.
A HELOC is a home equity line of credit. It’s basically a revolving line of credit offered by a bank, credit union, or online lender, and it works similarly to a credit card. You get access to a specified amount of money and can make withdrawals during the draw period. You do need to personally qualify for the loan and have enough equity in your home to qualify as well. You don’t get access to a lump sum, but instead use the money as you need it, which can be beneficial for ongoing construction projects.
Seller financing is when the seller acts as the lien holder and instead of making payments to a mortgage company or lender, you pay the seller. The seller can set his/her own terms including down payment amount, credit criteria, loan length, and interest rate. Seller financing can be a good option if you wouldn’t otherwise qualify for a loan. It can also be a good short-term option so you can buy land in a competitive market, and then refinance it with a bank or mortgage lender, once you qualify. However, it’s best to have a real estate attorney draw up the paperwork so all parties know what the conditions are and so the contract is legally binding on both ends.
SBA 504 Loans
SBA (Small Business Administration) 504 loans are long-term loans that have fixed rates and offer financing up to $5 million for major fixed assets. They’re intended to promote job creation and business growth. These loans are available through SBA’s community based partners and are regulated and certified by the SBA. They can be used to purchase existing buildings, land, or to construct a building. These loans can be great if you want to build a project and hire local workers, or if you need a loan larger than a personal loan limit. However, they do have restrictive uses, such as no investing in rental real estate, and no debt consolidation. The application process is also much longer than other types of loans.
Tips for the Land-Buying Process
Here are some tips to make the land-buying process easier:
Do your research: Know the land boundaries, pay for a survey, find out if utilities are already there, or how they will be hooked up. Also, be aware of zoning restrictions and if there is a well or septic tank on the property.
Consider usage: What do you plan to use the land for? If you’re going to build a house, know how much that will cost, plus the cost of the land, and then check out how much existing neighboring houses are worth to make sure it’s a sound investment. Also, know what the property can and can’t be used for. If you want to have a horse farm, and it isn’t in an agriculturally zoned area, you may need to reconsider your plans.
Internet and cell service: If you’re in a remote area, consider how you will be able to access the internet and have cell reception. This is especially important today with more people working from home and owning multiple devices that require internet connection. Even in a non-remote area, find out what providers are available and if underground or above-ground lines are already run.
Consider the property taxes: Know the current tax rate, how much the current taxes are, if any back taxes are owed, and how the tax rate will change once you build on the land. Vacant land tax will usually be much lower than tax for a house or a housing development.
Now that you know that you can use personal loans to buy land, you want to get the best possible deal. Knowledge is power and can save you money. Know your credit score and have all your documents in order and available for the application process. In addition, compare lender rates, terms, fees, and conditions. Know how much you can afford to spend and stick to your budget. Personal loans can make your land purchasing goals come true.
Frequently Asked Questions(FAQ)
How do personal loan and land loan interest rates compare?
Personal loan interest rates are typically higher than land
loan interest rates. They’re higher because there is more risk involved because
a personal loan doesn’t typically involve any collateral so if you default on
the loan, the lender doesn’t have as much recourse. Rates do vary by loan
amount, loan type, and borrower credit score. Land loan rates for farmers and
agricultural purposes are usually significantly lower than land loan rates for
investors or buyers who just plan to build a house or hold the land. Personal
loan rates typically range from 5% to 35%. Land loan rates (not for
agriculture) typically range from 5% to 9% and agricultural land loan rates
typically start around 2.25%.
Is it possible to get a personal loan to buy land with bad credit?
If you’re wondering, can you take out a personal loan to buy
land with bad credit? The answer in most cases is yes but not with all lenders.
Check out lenders that don’t have minimum credit score requirements or lenders
that offer loans for multiple tiers of credit. You may not get access to a high
loan limit with a low credit score, but you could at least get a small loan to
help offset some of the land purchase expenses.
Where can I get a personal loan to buy land?
You can get a personal loan to buy land at a few different
places. First, check out the financial institution where you do your banking.
You already have a relationship with them so will generally be offered the most
competitive rate. You can also check out our list of lenders, as well as banks
and credit unions that are convenient to you.