In India most property or Flats are sold with construction linked plans. Customers are aware that builders do delays while giving possession of the property and they want to pay only when the flat is ready or the progress is happening.
And most homes are brought via Home loans.
There is a question in a common person mind that on such loans he will be charges interest.
The answer to this is that Banks do give Home loans to construction linked projects and infect are more happy to finance such projects.
The customer only pays rate of interest whenever the amount is disbursed to the builder.So rather than paying amount on the entire loan, the customer pays rate of interest for the only the amount that a bank has paid to the builder via construction linked plans.
This is a win – win for the customers as the amount of interest is reduced and he is motivating the builder to do the property in time.
Here is an example of how you will be charged
1.Total Home loan – 2500000 @ 10.5% for 20 years
Day 1 Loan disbursed
500000 Emi would be –