Getting a loan for land purchase is an entirely different process than acquring traditional commercial property loan. When it comes to financing a land purchase, land loan lenders will often have stricter requirements. For one, a land loan is unsecured as there is no asset that can be used as collateral if you fail to repay the loan.
Because land loans are seen as a riskier option for lenders, you may need to work on your credentials before you apply. Furthermore, land loan interest rates are higher than other kinds of property loans due to the liabilities incurred by the lender.
When it comes to securing a land loan, you will typically need to have a higher credit score (700+). Moreover, a loan for land purchase will typically require some form of down payment.
When it comes to land loans, there are also a number of hurdles you may need to overcome. For example, it will be easier to secure the loan if the lot you intend to purchase is a ready-to-build lot. Depending on the land use restrictions and local zoning regulations, lenders may be unable to provide funding.