Developer Subvention or a Construction Linked Plan - What is better?

Developer Subvention or a Construction Linked Plan - What is better?

Developer Subvention or a Construction Linked Plan - What is better?

Developer Subvention or a Construction Linked Plan - What is better?

Developer Subvention:


  • Lower EMI burden during the construction period, as the developer pays the interest on your loan.
  • More flexible payment plan, as you only start paying EMIs after possession.
  • Can be a good option if you are short on funds and need time to arrange the down payment.


  • Higher interest rates compared to CLPs, leading to a higher overall loan cost.
  • Developers may default on interest payments, leaving you with the burden.
  • You lose control over the loan and the developer may delay the project.

Construction Linked Plan (CLP):


  • Lower interest rates compared to Subvention schemes, leading to lower overall loan cost.
  • Greater transparency and control over the loan, as you directly pay the bank.
  • Less risk of defaults, as the developer receives payments based on construction progress.


  • Higher EMI burden during the construction period, as you start paying pre-EMIs on the disbursed loan amount.
  • Requires a larger down payment upfront.
  • May not be suitable if you have limited funds.

Here are some additional factors to consider:

  • Your financial situation: If you are short on funds, a subvention scheme can offer some relief. However, if you can afford higher EMIs, a CLP is a better option in the long run.
  • The developer's reputation: Choose a developer with a good track record and financial strength to minimize the risk of defaults.
  • The project timeline: If the project completion date is uncertain, a subvention scheme may be less risky.
  • Your risk tolerance: If you are risk-averse, a CLP is the safer option.

Ultimately, the best way to decide is to consult with a financial advisor who can assess your individual circumstances and recommend the most suitable option.

About the author
Sandeep Sadh

About Sandeep Sadh

Sandeep Sadh has been in the real estate business since 1993 in Mumbai. He has expertise in Buying, Selling, Leasing properties in Mumbai and a deep understanding of legal and tax related matters due to his experience.


Over the years, he has experienced the City's growth. He has been a columnist in the Times of India with numerous articles, which bring about a clear picture of the real estate market in Mumbai. He is a regular on NDTV, CNBC, ET Now Real Estate and Zee News, giving his experienced quotes as and when required.

Sandeep Sadh has used information and technology since the year 1998 and now what people call it Prop Tech to cater to the needs of Home Buyer, Seller, Investor and Corporates, HNI and NRI looking to Buy/Sell or Lease their properties in the Mumbai Property Market.

Sandeep has a holistic experience of real estate be it Leasing an Apartment for your CEO in the most upmarket buildings, to enter into a long lease for your office in Mumbai in prime buildings or an Investment in good projects with a detailed analysis keeping in mind the Demand and Supply and other micro factors of the project/property.

Sandeep Sadh has developed a few websites like,, which augment the real estate consulting business.

Right from Investments in Primary Markets to Selling, leasing and specializing for NRI’s all over the world. He is an expert in NRI Home Buying and Selling and has a good understanding of the Income Tax laws pertaining to Selling a Property and Repatriating funds overseas or reinvesting based on Capital Gains etc.


  • Residential Leasing
  • Commercial Leasing
  • Residential Home Buying
  • Commercial Property Buying
  • Investment Properties with complete Property Management as your Real Estate Family office

While transacting in the above segments, he has complete experience and deep understanding of the paper work, his areas of expertise are :

  1. Drafting of the Leave and License Agreements
  2. MOU for Buying/Selling Properties
  3. Drafting Agreement for Sale
  4. Gift Deeds
  5. Computing of Capital Gains with current ready reckoner values
  6. Drafting of Supporting Power of Attorney.

As an add on Service, Sandeep Sadh has tied up with various Professionals like Lawyers and Chartered Accountants who add value in transacting and specially services for Non Resident Indians.

Application to Income Tax for Lower Tax Deduction Certificate – Through a qualified CA and keeping a grip on the traction so that the remittance back to Non Resident Indians after Selling the property is seamlessly transferred.

You can connect with Sandeep Sadh on

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