The subvention payment plan is a home loan plan that s intended to attract home buyers. It entails an intending homeowner not to pay any EMI till a fixed period of time. In this plan, all the interest till the fixed time and/or possessions would be paid by the builder.
In the plan, you fundamentally buy the property without having
to give any interest for the fixed period of time.
Under the subvention payment plan, banks pay about 80% of the BSP to the builder, and the builder pays the PRE-EMI (Interest) part to the bank on behalf of the clients for the fixed time.
There are some benefits for the buyer, and also for those
living in a rented home. Early payment of 15% to 20% helps reduce the budget
load on investors. Another advantage is that home seeker would be able to get
loans at a very low rate.
Since the banks are involved, it is sure that the
investments are safe.