NEWS & ADVICE : HOME LOANS
Choose right repayment plan for home loans
By Joseph Samson
Print    Email    RSS   

While choosing a home, people keep in consideration many important factors like property's proximity to workplace, offered amenities, surrounding infrastructure, build up area, linked benefits etc. But often, one crucial factor goes amiss i.e. choosing right payment plan.

As we know, every individual buying a home has different financial backgrounds and different financial requirements. So, housing finance companies and banks offer various repayment options that suits buyer's need.

Usually, the repayment options are tailored according to a borrower's credit worthiness. They are designed to simultaneously benefit both the borrower and the lender. Lenders consider factors like monthly income, stability of employment, age of the customer and any other debts that are being serviced by him while deciding on which repayment plan to offer to a customer.

On the other hand, while choosing a repayment option, a borrower should keep in mind that the chosen scheme is affordable, increases his repayment capacity and gives him tax benefits. The main aim behind choosing a suitable repayment option is to make repayment of home loans easier. Before selecting a repayment scheme borrower should take some time to understand its features as it is a long term financial decision.

There are some innovative payment models, namely Down-Payment Plan (DPP), Construction-Linked Plan (CLP), Flexi Payment Plan (FLP) and Term-Linked Payment Plan (TLPP). Let us discuss these to find out, which one suits best to the needs and requirements of the borrowers:

Down Payment Plan (DPP)

A traditional, Down Payment Plan requires buyers to pay 10-15% of the purchase price in the form of advance booking amount (also commonly termed as `earnest money'). Thereafter, up to 80-90% of the balance amount is paid within the 45-60 days of booking. The remaining 5-10% balance amount, if any, needs to be paid at the time of possession, along with other charges. A hefty discount of 10-15% on the purchase price, given by builders, is a major pulling factor for buyers, which attracts them to go for DPP. The upfront payment taken by builders is generally used for construction purposes. The discount may also get higher depending on the bargaining power of the buyers. In other words, bargain as hard as one can to get the best deal out. Thus, the option happens to be the cheapest of all plans if one is planning to buy an already constructed property. In case of home loans, EMIs start once the bank makes the upfront payment.

However, the risk factor involved in DPP increases with under-construction property. In case of any delay in completion and delivery of a property, which sadly is a reality, the buyers find themselves at the mercy of builders. In such a case, they are not even able to move out of the project due to contractual clauses.

To reduce the risk factor involved in it, an option of ‘EMI sharing' (also called Deferred Payment Scheme) has been introduced. This concept is popularized by marketing people as ‘No EMI Till Possession', which works as an excellent sales pitch. The ‘Zero EMI' or ‘No EMI Till Possession' is where buyers are not required to pay monthly installment once the property loan has been sanctioned. Instead, the property builder will pay interest EMIs by issuing post-dated cheques for pre-decided tenure, ranging from 12 to 30 months. This method is lucrative as here buyers not only get a discount on the total purchase price of the house but also get time to save cash for a significant period. This is important to note here that the EMIs involved in EMI sharing method constitutes just the interest component, whereas the principal component still has to be paid by the buyers.


Page  | 123 |  
(Comments Posted : 12) Post Your Comments
1. DO YOU NEED FINANCIAL ASSISTANCE? ( PergoCF@cheerful.com ) Do You Need A Business Loan? ( PergoCF@qualityservice.com )Interested Applicants Should Contact Us Via Email: PergoCF@gmail.com

Do You Need Financial Assistance? PergoCF@cheerful.com
Affordable Loan Offer, PergoCF@gmail.com
Do You Need A Business Loan? PergoCF@qualityservice.com
PergoCF@cheerful.com (Posted: May 8, 2017)
2. Do you need a loan?
Do you need financial help?
Does your firm, company or industry need financial assistance?
Do you need finance to start your business?
Do you need finance to expand your business?
Do you need personal loan? Please, contact us for more information:
bdsfn.com@gmail.com
anatiliatextileltd@gmail.com

Hai bisogno di un prestito?
Hai bisogno di aiuto finanziario?
La tua impresa, azienda o industria ha bisogno di assistenza finanziaria?
Hai bisogno di finanziamenti per avviare la tua attività?
Hai bisogno di finanziamenti per espandere la tua attività?
Hai bisogno di prestito personale? Vi preghiamo di contattarci per ulteriori informazioni:
Bdsfn.com@gmail.com
Anatiliatextileltd@gmail.com

Potrebujete úver?
Potrebujete financnú pomoc?
Potrebuje vaša firma, firma alebo priemysel financnú pomoc?
Potrebujete financné prostriedky na zacatie podnikania?
Potrebujete financie na rozšírenie svojho podnikania?
Potrebujete osobnú pôžicku? Prosím, kontaktujte nás pre bližšie informácie:
bdsfn.com@gmail.com
anatiliatextileltd@gmail.com

Avez-vous besoin d'un prêt?
Avez-vous besoin d'aide financière?
Votre entreprise, entreprise ou industrie a-t-elle besoin d'aide financière?
Avez-vous besoin de financement pour démarrer votre entreprise?
Avez-vous besoin de financement pour développer votre entreprise?
Avez-vous besoin d'un prêt personnel? Veuillez nous contacter pour plus d'informations:
bdsfn.com@gmail.com
anatiliatextileltd@gmail.com

Necesitas un préstamo?
¿Necesita ayuda financiera?
¿Su empresa, empresa o industria necesita ayuda financiera?
¿Necesita finanzas para comenzar su negocio?
¿Necesita financiación para expandir su negocio?
¿Necesita préstamo personal? Por favor, póngase en contacto con nosotros para más información:
bdsfn.com@gmail.com
anatiliatextileltd@gmail.com
Bdsfn.com@gmail.com (Posted: May 7, 2017)
3. Do you need a loan?
Do you need financial help?
Does your firm, company or industry need financial assistance?
Do you need finance to start your business?
Do you need finance to expand your business?
Do you need personal loan? Please, contact us for more information:
bdsfn.com@gmail.com
anatiliatextileltd@gmail.com

Hai bisogno di un prestito?
Hai bisogno di aiuto finanziario?
La tua impresa, azienda o industria ha bisogno di assistenza finanziaria?
Hai bisogno di finanziamenti per avviare la tua attività?
Hai bisogno di finanziamenti per espandere la tua attività?
Hai bisogno di prestito personale? Vi preghiamo di contattarci per ulteriori informazioni:
Bdsfn.com@gmail.com
Anatiliatextileltd@gmail.com

Potrebujete úver?
Potrebujete financnú pomoc?
Potrebuje vaša firma, firma alebo priemysel financnú pomoc?
Potrebujete financné prostriedky na zacatie podnikania?
Potrebujete financie na rozšírenie svojho podnikania?
Potrebujete osobnú pôžicku? Prosím, kontaktujte nás pre bližšie informácie:
bdsfn.com@gmail.com
anatiliatextileltd@gmail.com

Avez-vous besoin d'un prêt?
Avez-vous besoin d'aide financière?
Votre entreprise, entreprise ou industrie a-t-elle besoin d'aide financière?
Avez-vous besoin de financement pour démarrer votre entreprise?
Avez-vous besoin de financement pour développer votre entreprise?
Avez-vous besoin d'un prêt personnel? Veuillez nous contacter pour plus d'informations:
bdsfn.com@gmail.com
anatiliatextileltd@gmail.com

Necesitas un préstamo?
¿Necesita ayuda financiera?
¿Su empresa, empresa o industria necesita ayuda financiera?
¿Necesita finanzas para comenzar su negocio?
¿Necesita financiación para expandir su negocio?
¿Necesita préstamo personal? Por favor, póngase en contacto con nosotros para más información:
bdsfn.com@gmail.com
anatiliatextileltd@gmail.com
Bdsfn.com@gmail.com (Posted: May 7, 2017)
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Tax Planning for Working Women in India
The Home Loan Rate Pendulum
7 most common Home Loan problems faced by...
Bank loans that could glitter for you
Mortgage insurance’s relevance in India


love problem +91-8107216603 solution specialist...
PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

NEWS THIS WEEK
Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive