When you book an apartment in a new launch project, you are not buying a completed product. You are entering a payment schedule — a structured series of disbursements tied to construction milestones, time periods, or both. Understanding what you are agreeing to is essential before you sign.
There are three primary payment structures used in Indian residential real estate. Each carries different implications for your cash flow, your home loan structure, and your risk exposure.
Construction-Linked Plans (CLP)
The most buyer-protective payment structure. In a CLP, your payments are tied to construction milestones — you pay a tranche when a specific stage of construction is completed and certified.
Typical CLP structure:
- 10% at booking
- 10% on commencement of foundation
- 15% on completion of structure (podium level)
- 15% on completion of the tower to mid-floors
- 15% on completion to full height
- 10% on completion of MEP work (electrical, plumbing, fire systems)
- 10% on receipt of occupancy certificate
- 15% on possession
Why it protects buyers: You pay proportionally to what has been built. If construction stalls, your payments stop automatically. You are not funding future work with money disbursed before the work begins.
The practical challenge: Construction-linked plans can be administratively complex for buyers taking home loans, because banks disburse in tranches against construction certificates — requiring more coordination.
Time-Linked Plans (TLP)
Time-linked plans tie payments to calendar dates rather than construction milestones.
Typical TLP structure:
- 15% at booking
- 10% in 3 months
- 10% in 6 months
- 10% in 9 months
- And so on through possession
Why developers prefer them: Predictable cash flows regardless of construction progress. The developer receives money on a schedule they control.
Why buyers should be cautious: You continue making payments even if construction falls behind. Your payment schedule is not connected to what has been built. If the project encounters delays, you are fully funded and fully exposed.
Down Payment Plans (Subvention Schemes)
Down payment plans require the full (or majority) payment upfront, often marketed with developer-funded EMI coverage for the pre-possession period ("Pay 20, Nothing Till Possession" type schemes).
How they work: You pay 80–90% upfront (often funded by a home loan that the developer's bank partner disburses at once). The developer agrees to service the EMI until possession. You take possession and then begin your EMI payments.
The appeal: You pay nothing during construction. Your EMI begins only when you move in.
The risks: The developer holds your full payment. If the project is delayed significantly, the developer's EMI subvention arrangement may not hold. You are exposed to the full project risk with all your capital committed. Subvention schemes were restricted by RBI in certain forms — verify the specific structure with your bank.
What RERA Changed About Payment Plans
Post-RERA, all payment plan structures must be disclosed in the registered project documentation. The payment schedule you agree to must match the registered schedule. Developers cannot unilaterally change payment milestone definitions after registration.
This does not prevent delays. It does mean the developer is bound to the construction milestone definitions they registered — and cannot redefine "foundation completion" to mean something different when it suits them.
Practical Advice Before Signing
1. Read the payment schedule before the floor plan. The payment schedule determines your actual financial commitment. A floor plan you love is irrelevant if the payment structure puts you in financial stress.
2. Understand the home loan disbursement pattern. Home loans for under-construction properties are disbursed in tranches by the bank. Banks disburse based on construction progress (verified by their technical officer), not based on developer's requests. The disbursement may lag behind the payment schedule — creating a gap you fund from personal resources.
3. Pre-EMI vs. full EMI. During construction, you typically pay only the interest on each bank disbursement (pre-EMI). Full EMI — principal + interest — begins after possession. Pre-EMI payments are not reducing your loan principal. Factor this into your cash flow planning.
4. Ask for the milestone definitions in writing. What does "completion of structure to 20th floor" mean specifically? Who certifies it? Ask for these definitions before signing.
5. Verify the possession date commitment. The payment schedule ends at possession. If possession is delayed, your final payment tranche — tied to occupation certificate and handover — is also delayed. Understand what happens to your timeline and what compensation applies.
Want to understand the specific payment plan for this project? Speak to our team.. We'll walk you through every milestone and what it means for your home loan structure.