Why is the 10:90 Plan Popular?
You must have heard the term ’10:90′ plan multiple times if you are buying a new property.
In a simple explanation, on the 10:90 plan, you have to pay only 10% amount of the total cost of the property at the time of the booking and pay 90% of the amount at the time of possessions. This is the ideal plan for real investment in India.
The builders often offer CLP (Construction Linked Method) payment method. In the CLP payment method, the homebuyers are liable to make payments based on the progress of construction. For example, 15% of the amount must be paid at the time of booking, 20% when lift and the rest should be paid at the time of the possession.
What Are the Benefits of the 10:90 Plan?
• A minimum amount is required for purchasing a property.
• The property can be resold before possession.
• Save interest on the home loan.
• Online booking options are available.
• Minimal documentation is required.
What Are the Drawbacks of the 10:90 Plan?
• This plan is for new launch projects.
• Cross-check the background of the builder.
Comparison of 10:90 Plan with CLP Plan
| 10:90 Payment Plan | CLP Payment Plan | |
| Property cost | INR 80 lakhs | INR 80 lakhs |
| Number of years before possession | 3 years | 3 years |
| Payment to be made during booking | INR 8 lakhs (10%) | INR 12 lakhs (15%) |
| Additional payment before possession | 0 | INR 27.2 lakhs (40%) |
| Loan amount before possession | 0 | INR 56 lakhs (70% loan amount) |
| Interest paid until possession | 0 | INR 12.6 lakhs (7.5% interest rate for 3 years) |
| Total investment before possession | INR 8 lakhs | INR 39.2 lakhs |
| The effective cost of property on the day of possession | INR 80 lakhs (INR 8 lakhs booking + INR 72 lakhs due) | INR 93 lakhs (INR 39.2 lakhs paid + INR 41.2 lakhs due + INR 12.6 lakhs interest) |
| Property price in 3 years | INR 95 lakhs | INR 95 lakhs |
| Profit earned | INR 15 lakhs | INR 2 lakhs |
Hence this calculation proves that the 10:90 scheme is more profitable than the CLP payment plan.
If you have any questions or comments, you can reach out to us at info@roodland.com. Any concerns or suggestions you have will be taken into consideration.
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