A Guide To Property Payment Plans For Homebuyers: Which One Should You Go For?

Are you considering moving to a new house but confused about how you will pay the total amount at once? In recent years, developers have started offering several payment plans to help you make payments in part; you can serve your financial goals and budget. In this blog, we'll cover four payment plans and also discuss which method you should choose for your next real estate purchase. Let's dive right in.

Down Payment Plan

This payment plan requires the buyer to pay 10-15% of the property value at the time of the booking and another 80-90% within a specific period (usually 45-90 days). The balance amount includes charges levied by different authorities, including stamp duty and registration fees. This payment plan can also sometimes help you get a great discount on the total property price as the payment is being made to the builder directly.

Construction-linked Plan

This payment plan requires the buyer to pay the booking amount initially, which constitutes 10-15% of the total purchase amount. The remaining is paid in phases, depending upon when different construction milestones are achieved. This payment plan involves the least amount of risk as the buyer is paying as per the completion of the project and, hence, is more likely to get the project completed by the developer as per the schedule.

Flexi-payment Plan

This payment plan is a combination of the down payment and construction-linked plan that involves the buyer paying almost 50% of the total amount when the construction is scheduled to start. The remaining amount is paid as and when the construction takes place. For instance, a developer offers a 10:90 builder flexi-payment plan. The buyer is expected to pay 10% at the commencement of the project, and the balance amount is cleared when they receive the occupancy certificate.

Time-linked Payment Plan

This involves payment for the property in installments, depending upon the builder or developer's timeline. This method of transaction is not linked with the progress of the construction. Therefore, it does not involve additional benefits apart from the 8-10% discount on the property.

What Is the Best Payment Plan for You?

Every buyer is unique, and the best payment plan for you depends on your personal situation and the funds available to you. Along with that, every payment plan will have different costs and requirements. If you are dependent on a home loan, the lender will disburse the amount only on the basis of the progress in construction. Thus, you may have no option but to opt for a construction-linked plan when you have monetary limitations.

The flexi-payment plan is advantageous for buyers who may not have enough disposable income to pay the entire amount upfront. This payment plan allows them to pay as the project nears completion after an initial down payment.

On the other hand, if your financial situation allows and you have enough confidence in the developer's credibility, you may want to make the full payment upfront. In the Indian real estate scenario, where project delays are common, buyers usually prefer to opt for construction-linked plans, where they can track the pace of construction. Before deciding on a payment option, carefully evaluate the benefits and drawbacks of each option available to make the best choice for your needs.