Finance is one of the key concerns when comes to property purchases. There are various schemes offered which give little relief to home buyers. The Flexi plan models are the popular and preferred way of payment in the real estate sector. Check out the article to learn more about the Flexi payment plan and what is the best payment plan for buying a property.
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What is a Flexi Payment Plan?
A Flexi payment plan is an option in which customers can buy a service and pay for it over time.
Purchasing a home can be challenging, especially if it’s your first time. Buying real estate demands a sizable financial commitment and most developers provide a range of payment options to make the transaction simple and accessible for customers.
Due to the introduction of GST and RERA, the real estate sector has undergone numerous changes.
This encouraged a lot of purchasers to make investments in real estate and allowed developers to attract buyers by providing new payment choices.
Types of Flexi Payment Plans
When a person decides to purchase a home, the EMI and sizable down payment that would be needed at the moment of booking are the first things that spring to mind.
There are many Flexi payment plans available which can be beneficial for a property buyer.
Construction Linked Plan
In a construction-linked plan, a 10-12% down payment of the overall property value is required at the time of booking the property.
The remaining 10 to 15 % must be settled within 30 days of the booking date.
A construction liked plan also known as a possession-linked payment option.
This payment option is one of safe and low risk as the purchaser runs the lowest chance of losing money with this plan because it is reliant on the construction phase and the developer is paid in stages when each slab is finished rather than all at once.
- The buyer has to pay more interest to the bank institution when he opts for a construction-linked plan.
- The payment starts once the buyer has possession, and the buyer is liable for payment of the interest towards the bank up to that point.
- The buyer pays greater than what the property is worth so this is the downside of this payment mode.
Also check out, All About PLC Preferential Location Charges
Downpayment Plan
When completing a booking process, a purchaser must deposit a payment of 10–15% of the property’s value.
The remaining 80–90% of the price is then required within the developer’s allotted time, which is often 45–60 days.
The value of your property does not include the usual 5% of the property price in stamp duty & registration fees.
In addition, there are maintenance and property tax fees for the developer’s facilities. In this plan, the EMI will start as soon as the booking of the property is made.
Plan of Subvention Payment
Plan of subvention mode relieves the stress of homebuyers who live on rent from both the EMI and rent obligations. Until the purchaser takes possession, the builder often pays the EMI on the buyer’s behalf.
A few tweaks to this system include the builder paying the EMI for a predetermined amount of time.
The date of ownership is not a factor in this kind of subsidy programme. Another form is one in which the developer and the purchaser split the cost of the EMI evenly.
By opting for this Flexi payment plan buyer gets more time to save money but the drawback is the customer’s credit score will be adversely affected if the developer does not pay interest on time.
You can calculate EMI here.
Payment With Flexibility
The Payment with Flexibility plan mixes a down payment programme with a programme tied to construction.
According to this plan, the buyer must pay 50% of the entire property value before work can start.
Frequent project-launching developers usually provide a flexible payment schedule. The remaining amount is settled as the project advances.
With this payment method, the developer will sell the property at a discounted price because the buyer will pay nearly half of the total cost upfront.
In a construction-linked plan, where you would only be charged 35% interest, Flexi payments require you to pay interest on 50% of the total amount.
What are the Benefits of a Flexi Payment Plan While Buying a Property?
When you decide to purchase the property you must understand which Flexi payment plan is good for you and will be beneficial financially.
Here are the benefits of a Flexi payment plan while buying a property.
- If you choose a CLP construction-linked plan, it carries the lowest risk to the customer because the payments are not time-limited and are entirely dependent on how the construction is coming along.
- In the Downpayment plan, you are paying the builder in full up front which results in sizable savings on the overall worth of the home. You cannot receive a discount of up to 8–10% from any other plan.
- If you select a flexible payment plan, Here, you may examine the project’s construction-related plans, such as 50:50, 30:70, and 20:20:20:20:20. As a result, you can choose the plan of your choice.
What are the Disadvantages of Flexi Payment Plans?
While selecting the Flexi payment plan you must consider the drawbacks of each one and then decide according to your preference.
- For downpayment plan mode this very rarely occurs in most circumstances, if the builder takes too long to hand over the unit to the buyer, this plan turns into an expensive plan for them. Diverse risks are presented to investors, and projects may become stuck.
- As this Flexi payment plan offers a discount on property buying but this is also a risky one. Because it is impossible to obtain money refunded if projects are cancelled after booking, as commonly happens with new launches, this method is quite dangerous for the buyer.
Also, check out How To Compute The Market Value Of Your Property
FAQs
| What is the CLP payment plan?
Construction linked plan in real estate is linked with the process of construction of the project. The buyer requested to pay for the property according to the completed construction. |
| How do you pay when buying a house?
You can make a payment using a bank check, NEFT, or any other method that is available. Get the property registered, state the amount paid there, and pay the necessary stamp duty for the document. |
| Is a construction-linked payment plan good?
The builder gives priority to finishing the project on schedule so you can take possession as soon as possible. The pre-EMI interest is only due during the anticipated building period. As the building of your home advances, the amount of your home mortgage EMIs constantly increases. |
| Is it better to pay in full or with a payment plan?
If you are comfortable with paying an upfront total amount for a property purchase then go for it but if you need to save money and can’t afford it upfront then choose the payment option from above. |
