You must have heard the term “CLP” in real estate at some point or another. It is a term that often confuses property buyers. But don’t worry; today we will understand this term.
The full form of CLP is “Construction Linked Plan.” It is a payment plan where the price of the property is divided into many installments. Each installment is paid when a specific stage of the property is completed.
Investing in real estate is a big step, and it can also be a big financial burden for you. But what if you find a payment plan? It could ease your burden and keep your investment safe. This is possible with CLP (i.e., Construction Linked Payment Plan).
What is CLP?
CLP is a payment plan used by real estate developers for under-construction properties. You pay for the property in installments. Each installment is due upon the completion of a specific stage of construction.
How does CLP work?
CLP usually involves the following steps:
- Booking: When you book a property, you have to pay a booking amount of a specific sum.
- Milestone-based payment: After this, pay the rest in installments linked to construction stages. For example, you may have to pay after: pouring the foundation, erecting the structure, building the plinth and walls, and laying the floor.
- Possession: After the work is done and the property is livable, you must pay the final instalment and take possession.
Advantages of CLP
CLP offers several advantages, including:
- Less financial burden: CLP saves you from a large, one-time payment. It lowers your monthly installment.
- Transparency: CLP lets you track construction progress. You can ensure that your payment is used correctly.
- More security: CLP protects your investment. You pay only when construction is complete.
- Interest savings: Some developers offer an interest-free period during construction. It lets you save on interest payments.
Disadvantages of CLP
CLP also has some disadvantages, including:
- Higher price: Developers may charge a bit more for CLP properties.
- Lack of flexibility: After booking a CLP property, you must pay as construction progresses. This holds even if your finances change.
Is CLP right for you?
CLP may be right for you if you want to buy a new property and are looking for an affordable payment plan. It can be especially beneficial for those who have limited starting capital.
But it is important to note that CLP is not right for everyone. If you are an experienced, risk-tolerant investor, consider other payment plans.
Conclusion
CLP is a great payment plan that makes investing in real estate more affordable and secure. But it is important to understand that CLP has its own advantages and disadvantages. So, before you decide, consider your financial goals and risk tolerance.
FAQs
1. What is CLP?
A CLP, or Construction Linked Payment Plan, is a payment plan. Real estate developers use it for under-construction properties. In this plan, you pay the property’s total cost in installments. Each installment is due upon the completion of a specific construction stage.
2. What are the advantages of CLP?
- Less financial burden: CLP saves you from a large lump sum. It reduces your monthly payment.
- Transparency: CLP lets you track construction progress. It ensures that your payments are used correctly.
- More security: CLP keeps your investment safe. You pay only when construction is complete.
- Interest savings: Some developers offer a no-interest period during construction. This saves you on interest payments.
3. What are the disadvantages of CLP?
Higher price: CLP properties may cost more due to developers.
Lack of flexibility: After booking a CLP property, you must pay as the construction progresses. This is true even if your finances change.
4. Is CLP right for me?
CLP may be right for you if you want to buy a new property and are looking for an affordable payment plan. But it is important to note that CLP is not right for everyone. If you are an experienced, risk-tolerant investor, consider other payment plans.
5. Is it easy to get a home loan under CLP?
Yes, it may be easier to get a home loan for properties sold under CLP. Banks release funds to the developer based on construction progress.
6. Where can I get more information about CLP?
For more about CLP, contact your financial advisor or real estate agent.