Loans to buy land

See how to get a land loan in the UK, and which personal loans can be used to buy land.


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Can I get a personal loan to buy land?

Yes, you may be able to get a personal loan to purchase land, but you will need to convince the lender that it is a worthwhile purchase and that you will be able to repay the loan.

How do personal loans to buy land work?

As with any other loan, you will need to apply with a lender if you want a personal loan to buy land. However, it may be more difficult to convince the lender to approve your land loan than it would if you were applying for a regular mortgage.

While the land has a certain value when you purchase, it may be hard for the lender to dispose of it in the event you default on your loan and it needs to sell the land to recoup the cost of the loan. With a mortgage, the cost of the loan is secured against the value of the property you’re buying and this will generally have better resell value than undeveloped land.

Once you’ve been approved for a loan, you will need to make your loan repayments or risk losing the land. If you don’t want to use the land as collateral, you may be able to get an unsecured personal loan, but you may be limited in how much you can borrow.

How easy is it to get a land loan?

How easy it is to get a land loan depends on what you plan on doing with your land once you’ve purchased it.

For instance, it’s easier to borrow money for land that you plan to build a home or business on than it is to buy raw or undeveloped land that won’t be improved. How much land you want to buy also affects whether you can easily get a loan, as will local city or county regulations and zoning laws.

You can improve your chances of approval for a land loan by going into the process with a solid plan and a specific piece of land in mind. If you plan to build a primary residence on the property, you further increase your chances of lender approval, while buying land for unknown future uses can result in a denial on your loan request.

It can be expensive to submit planning applications and have them approved, so a lender will want to be certain that you will be able to cover the cost of your plans and still make your loan repayments.

4 steps to take before getting a personal loan for land

Unlike a mortgage, getting a land loan nearly entirely depends on the piece of property you intend to purchase.

To convince a lender that you won’t default and a have plan, take a few important steps before contacting potential lenders.

1. Know what land you’d like to buy

Before you contact a lender, have a lot in mind. A lender wants to know what you’ll be doing with the land, and going to a lender without knowing the land itself can result in a rejection.

2. Know the zoning regulations, easements and improvements

City and county zoning laws play a big part in what you can and can’t do with your land. For instance, you might not be able to legally start a farm if the area is zoned residential.

Similarly, easements (the right for you to use someone else’s land) and planned improvements for sewage, electricity and other utilities could prevent you from doing what you’d like once you buy the property. If you’re looking to build a house but a local cattle farmer has rights to use a portion of your land to graze, you’ll have to settle the issue legally before you can build.

3. Contact the seller to make an offer

Once you’ve done your research and are ready to buy, contact the seller either yourself or through a lawyer. Prepare to ask for an exclusive buying period while you pursue financing, otherwise the owner could sell the land before you’re approved for a loan.

4. Develop a plan for the property

Prepare a substantial plan for your property, including your estimates of costs and timeline for building on the land. Be specific for your needs, for example, when planning a farm, include costs for purchasing livestock, seed and farm equipment. Your job is to convince the lender you won’t default, so showing your ideas, associated costs and estimated timing attached is a solid way to help secure your financing.

Where can I get a personal loan to buy land?

  • Banks. You may be able to get approved for a secured loan with most major banks, provided you meet their lending criteria and can provide a detailed plan for what you want to do with the land.
  • Online or alternative lenders. Non-bank lenders may be more flexible in lending money than their traditional counterparts.
  • Owner financing. If you don’t believe you’ll be approved for a loan, you may be able to negotiate a payment plan directly with the current owner of the land.

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