The challenge of buying a home can be thrilling and nerve-wracking at the same time. To ease your tension and safeguard your investment, developers have come up with innovative payment plans to make your property buying process simpler.
But before opting for any payment plan, it is very important for you to understand pros and cons of each and every plan carefully. Read on to find out which is the best suitable payment plan available for you in Indian realty market.
Down Payment Plan
As the name suggests, down payment plan requires buyers to pay 10-15 per cent of the property price at the time of booking, remaining 85- 90 per cent within 45-60 days of booking. Remaining 5-10 per cent at the time of possession along with registration fees, stamp duty and any other charges of using society amenities such as gymnasium, parking and swimming pool.
Pros: Down payment plan gives you a decent discount (8-10%) on total property cost from builder. In any other plan you will not get a discount as high as 8-10 per cent.
Cons: It is also riskier and costlier as you have to bear EMI on full property price from the start till the completion of construction even if the construction is delayed.
Right time to opt for Down Payment Plan
When the property is nearing completion
When there is very low chance of delay in possession
When you deal with renowned and most trustworthy builders
Construction Linked Plan
Also known as a possession-linked plan, this plan is linked to the construction of the project. The buyer needs to pay about 10-12 per cent of the actual property cost as the booking amount. The remaining payment is payable with the project progress on the basis of construction.
Pros: Under this plan, the installments are pre-determined and give buyer time to arrange finances as the construction progresses. Also, under section 80C buyer will get a full tax benefit from the beginning.
Cons: Under this plan, you will not get any discount.
Right time to opt for Construction Liked Plan
When the project is newly launched or in its initial stages
When we have some cash in hand and are partially funding the buy through loan
Flexi Payment Plan
Flexi Payment Plan incorporates the features of both- Down Payment Plan & Construction Linked Plan. Under this plan, buyer needs to pay 10 per cent of the price at the time of booking, another 30-40 per cent within 30 days from the date of booking and the remaining amount in installments which are time linked such as every 3 months.
Pros: Flexi payment plan is a safe option in case of any delay.
Cons: Under this plan the risk is higher than construction linked plan, but less than down payment plan.
Right time to opt for Flexi Payment Plan
When you can make only partial down payment
Time Linked Plan
Though not very popular, some developers offer Time Linked Plan. Under this plan you can make payments based on the given time duration.
Pros: Some developer offer discount on the basic property cost. Also, like in a construction linked plan, you get the full tax benefit from the beginning.
Cons: The buyer will be bound to pay installments within the given time frame.
Right time to opt for Time Linked Plan
Opt for under-construction property- when the construction in its mid stage
Systematic Investment Plan (SIP)
Real estate Systematic Investment Plan is a new addition to the list of payment plans. This option is available for mid-segment housing projects. Under this plan, the developer turns the property payments into a SIP. This requires the buyer to make a lump sum payment at the starting of every year while the rest is converted into monthly payments similar to SIPs.
This payment plan is more suitable for the projects in the price range of Rs. 60-80 lakhs, as it is easier to structure moderate monthly payments in this price range.
So, considering the pros and cons of each and every payment plan, you can easily opt for the best suited payment plan as per your requirements.