Bank finance articles and tips

While choosing a home, we consider varied factors including proximity to our workplace, amenities, surrounding infrastructure, etc. One important factor which often goes amiss is choosing the right payment plan, which is in line with your ability of undertaking risk and ability to pay. Such degree of caution gets increased especially when you intended to take home loan for your dream house. Let?s find out some of the payment plans-

Down payment plan- This plan requires buyers to pay nearly 10 per cent-15 per cent of the purchase price in the form of advance booking amount. Then nearly 80 per cent-90 per cent of the balance amount is paid within the period of 45-60 days of booking. The remaining 5 per cent-10 per cent balance amount will be required to pay at the time of possession, along with other charges. Developers take hefty upfront payment charges, which are used by them for construction purposes. The discount rate will be depending upon the bargaining power of the buyers. It means, you will be required to bargain as hard as possible to crack the best deal. In this way, this option is the cheapest of the plans if you are intended to purchase an already constructed house.

Full EMI sharing- In this plan, builder will pay the entire interest on EMI amount on your behalf for a particular duration of time.
Partial EMI sharing- In this plan, some portion of interest EMI will be paid by developer, whereas, rest of the amount will be paid by the buyer. For instance, builder may pay 50 per cent of interest portion of EMI and the remaining balance will be paid by borrower.

Construction-linked and Flexi Payment Plan- The Construction-Linked Plan (CLP) requires buyers to pay starting booking amount of nearly 10 per cent of purchase and remaining amount in installments, which is paid after completion of different stages, like 10 per cent on construction of every floor, etc.
On the other hand, flexi payment plan is the combination of down payment plan and construction linked plan, wherein buyers will be need to pay 30 per cent-40 per cent in the form of upfront payment charges at the beginning and remaining 30 per cent-40 per cent is milestone linked and it is paid at various stages after completion of different levels of construction procedure. The remaining balance will be paid at the time of property possession.

Time-linked plan- Buyers will be required to pay a certain pre-decided proportion in accordance to a calendar that the builder will decide, irrespective to the stage of construction. home loan emi calculator for home loan interest in India.