Down-payment plan: It is the most conventional scheme where you
have to pay 10-15% upfront, called down payment, at the time of booking and
thereafter 80-85% of the total cost within 30-90 days of booking. The remaining
5-10% balance amount, along with any additional charges, is paid at the time of
possession. In case you are taking a home loan, the equated monthly installments,
or EMIs, start immediately as soon as the bank makes the upfront payment. So,
interest is charged on the entire amount from day one. Also, you'll not get any
tax benefit on the principal value till the possession. However, if you can
manage the cash flow, you can get hefty discounts, sometimes as high as 15-20%,
depending on your bargaining skills. The caveat here is any delay in completion
and delivery, which is common in this sector.
Construction-linked plans: As the name suggests, the payments under
this plan are linked to the construction stages. You have to pay around 25-30%
of the purchase price within 90 days from booking and the balance in installments
on completing different construction milestones. It is usually 10% of the total
cost on completion of every floor. Thought you are unlikely to get any
discounts under this plan. Risks related to project delays are much less than a
down payment plan. Also, you get full tax benefit under 80C from the beginning.
Time-linked plan: Under this plan your installments are time-bound.
You have to make payments based on a pre-determined calendar set by the
builder, irrespective of the progress that the project has made towards
completion. So, even if there is a delay, you are contractually bound to make
the payment as per the timetable. Any delay in installment means you will have
to pay penalties-- interest on installments payable. It is therefore not a very
popular plan.
However, since the risks are
higher, some developers offer discount on time-linked plans as well. Also, like
in a construction linked plan, you get full tax benefit from the beginning.
Flexi-payment plans: This plan is a combination of down-payment and
construction-linked plans. Here, you are required to pay 10% on booking,
another 30-40% of the property value within 30 days of booking. The rest 50-40%
payment is done in tranches just like in a construction-linked plan. The last
10% along with one-time charges is paid at the time of possession. Since these installments
are linked to the stages of construction, it is a safe option in case of any
delay.
