Real estate payment plans – Choose the one suited to you

What is the one single dream which every Indian, without exception, shares with one and all? The easy answer is that every Indian wants to own and live in their dream, state of the art homes. But fulfillment of this most cherished dream comes at a massive financial cost. Buying a home is undoubtedly the biggest financial transaction anybody makes in their entire lifetime. Therefore it should be done with extra care without overburdening oneself and their finances.

The realty sector players have therefore evolved a plethora of innovative payment options which suits and meets the requirements of more or less every intending buyer. But every plan has its own unique set of pros and cons. Therefore one should study these plans in great detail and choose the one best suited to them. The most commonly extended realty payment plans are:

Down Payment Plan: This is the oldest and most widely acceptable payment plan. The name suggests it all. This plan requires the intending buyer to pay a major chunk of the projects total cost as down payment at the initial stage itself. But as a result of major delays in delivery of projects, buyers are shying away from this plan as this plan ups their risks significantly, cause once you pay a major chunk of the price, you are kind of stuck. So in order to lure buyers developers tend to offer gigantic discounts under this model.

Construction linked plan: Under the CLP payment model, the payments which are to be shelled out by the buyer is directly related to the construction stage and phase of the project. The developer sets certain benchmarks when the customer will pay a predetermined amount from his pocket. For instance 10% at the time of booking, 15% on completion of third floor, so on and so forth. But go on expecting massive discounts under this payment model. But it surely can be considered a safe bet than DPP.

Possession linked plan: Under PLP the intending buyer ends up shelling out anything between 20 to 25% of the total price to the developer. This payment model’s best benefit is the fact that it significantly reduces the risk of a project getting delayed. This is so because if the developer doesn’t deliver a project on time then he won’t receive payments from the buyers. In this payment scenario the buyer also garners sufficient time to gather the required funds.

Subvention plan: Under this highly innovative and comparatively recent payment plan, the buyer usually shells out 10% at the time of booking a property and another 10% when the developer hand overs possession. The rest 80% is financed by a commercial bank or an NBFC while the interest on this loan is serviced by the builder. This is a win-win situation for all involved as the developers get some much needed finance and the buyer doesn’t have to pay much from his own pocket.

So if you are planning to buy your dream home, do a background check of the builder and study the payment model most suited to you. Or just get in touch with real estate consultants, like Madhyam, who can seamlessly guide you through the entire process.