These days subvention plan is a new type of home loan which attracts home buyers. Under this plan, individuals need not to pay any EMI till fixed period of time, all the interest till fixed time or possession will be paid by the builder. So, fundamentally you buy a property without having to give any interest for the fixed time! Under this scheme banks pay 80% of the BSP to the builder, and builder pays the PRE – EMI (interest) part to the bank on behalf of the clients for the fix period as said by the scheme. In this scheme builder will only pay the interest and not the principal amount.
Advantages to Buyer, Developers and banks by presenting subvention plan:
A break from EMI’s till fixed period or possession where you have sufficient time to plan for the funds.
Best for clients who are living on rented home.
An early payment of 15% - 20% thus reducing budget load on investors.
For the home seekers loans are available at very lower rate compare to the market.
Customers able to source loans from the bank at a lower rate than the market rate.
An assurance about safe investment by the involvement of banks.
Better return if you are investing with subvention scheme given the property value rise over a period of 2 years as compared to the usual bank scheme.
Buy the property – with the minimum investment: Pay 15% - 20% only as down payment.
The clients are also advantaged as the builder makes sure a timely delivery of the development to reduce the interest rate load on him.
Builder Benefits
Builder magnetize investors with developments under subvention scheme
With down payment from the customers and rest amount from the bank gives sufficient funds for the builders to complete projects on time.
Bank Benefits
Banks get large amount of clients in a single development. Builders keep passing huge number of clients to the bank and banks easily approve the loans. Actually this is a win - win condition for everybody – as real estate developer attracts buyers with this scheme, buyers get hassle free loan with no EMI’s and bank gets clients and take interest from builders.
