How You Can Know the Right Home Loan Payment Plan for You
Buying the house of your dreams may seem like a lengthy and tiresome task, and paying for it is even more painstaking, but once you get the right payment method locked half of your payment worries are solved.
Let's have a look the 3 major payment plans that are offered in the real estate industry:
This is the oldest and most used payment plan, where you have to pay 10-15% of the total cost of your house (luxury 3 bhk flats or duplexes et cetera). The rest of the 80-85% is paid in the first 30-45 days and then the remaining 5% is paid post possession. Â
When you pay a lump sum amount to the builder/developer you get an 8-10% discount on the total cost.
In case of any unforeseen trouble, like the project getting stuck in a dispute or the builder running away with your money, you will have put all your money at stake probably your life's savings.
2. Construction Linked Plan (CLP)
It's an almost risk-free payment plan prevalent in luxury residential projects where you have to pay 10-15% of the total cost of your house then 10-15% in the first 30 to 45 days. The remaining amount is paid in slabs/instalments as per the stages of construction of your house.
The possibility of delay in delivery of the house is very less as the builder will keep the construction going in order to receiving timely payments.
You end up paying more interest as this is a long term payment plan, so you don't start paying the principal amount till you get the possession.
In this payment plan, you pay 10-15% of the total cost of your house at the time of booking, then 35-40% within the first 45 days, and the rest of the 50% payment as CLP (Construction Linked Plan) according to the stages of construction. So a flexi payment plan is a combination of down payment and CLP.
As you are paying 50% amount in the first 45 days, you get a 5-6% discount from the builder. Also compared to the down payment plan, you pay lesser initially and then the rest as per the pace of construction.
If at all there is a delay in completion of project, you will have already started paying interest on the 50% amount, compared to CLP where you will be paying interest only on 30-40% of the total amount.
The selection of the right payment plan for you will depend upon your preference, paying capacity and financial priorities, generally banks/lenders prefer to opt for CLP or Flexi Payment plans as there is security that project will be completed in time. Hope you have more clarity and idea on the type of payment plans offered in the real estate field and this will help you choose the right one for you.
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