All you need to know about property payment plans

All you need to know about property payment plans Buying Guide

Purchasing a property is probably one of the biggest investment decisions that you ever make, it is a once in a lifetime decision for most of us. Before we invest in a property, it is extremely important for us to know and work out on our finances.

Developers these days are offering a number of payment plans to attract more buyers. Investing in a property for the first time can be excruciating but it is wise to be careful and protect yourself against risk rather than being careless and making a hasty decision.

Why should one know about offers?

Well, it will help you save some money and also help you buy your dream home that you’ve been thinking of continuously. Having a close look at all offers is crucial as it will help the buyer to invest in a property based upon his budget and also help with some money-saving schemes.

Are you aware of Property Booking offers?

We have jotted down various booking offers that you need to look out for while finalizing a property, these will help you with ease of payment and other benefits.

1.) Construction linked payment plan

As per the construction linked payment plan, the loan amount is released by the bank to the developers when they complete certain construction milestone. The bank will release some percentage of the loan amount whenever a certain amount of work is completed. This approach of payment cuts down the risk for the bank as well as the home buyers who are interested in investing their funds. Since the payment is not timed and completely linked to the construction progress, this plan carries the least risk for the buyer as well as for the developer since he would want consistency in the cash flow.

2) Down payment plan

The down payment plan is a traditional way of making payment which requires the buyer to pay 10-15% of the property value at the time of booking, the balance amount is paid within a given timespan.

This type of payment is generally convenient for the buyer as a major portion can be paid through home loan based on the deal with the developer. Rest of the amount is paid at the time of possession. However, if the apartment is almost ready, then one can easily purchase because of lesser financial burden via a down payment plan. The amount of down payment and the remaining payment is usually agreed upon at the time of making the purchase.

3) Flexible payment plan

This payment plan is a combination of Down Payment and Construction Linked Payment Plan. Under this scheme the buyer enjoys full tax benefits. Initially it takes approximately 3-6 months from the booking time to pay this amount and the remaining amount is to be paid once the construction takes place. Here the buyer needs to shell out a lower amount, whereas discount offered are likely to be lower than in a down payment plan.

4) Subvention scheme

Under Subvention scheme the buyer can invest money by paying down only a limited sum upfront. Once the initial payment is made no payment needs to be processed till the time of possession. Development risks gets translated entirely to the developer in this scheme. The reason why subvention scheme was popularized was to reduce the buyers EMI burden till possession. Also, the developers attract investors by introducing projects under subvention scheme and there is also a pressure on the developer to put into effect the project quickly.

We hope with this blog, you can get some clarity on payment plans available and maybe a pathway to your dream home.

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