Project & Payment
What is a Construction Linked Plan (CLP)?
The only payment plan where your money and their concrete move at the same speed. Which is exactly why some builders would rather sell you something else.
The short answer
A construction linked plan means you pay as they build. Each instalment is triggered by a milestone — foundation, each slab, brickwork, plaster, possession.
It is the safest plan for a buyer, for one reason: the builder only gets your money when they have done the work. Stop building, stop getting paid. That is the whole of it, and it is worth more than any discount.
How it works
You pay a booking amount. Then, each time the builder completes a defined stage of construction, they raise a demand and you pay the corresponding instalment.
If you have a home loan, the bank disburses in stages too, against the same milestones. You pay interest only on what has actually been disbursed — not on the full loan.
A typical CLP schedule
| Stage | % of price |
|---|---|
| On booking | 10% |
| On agreement | 10% |
| On completion of foundation | 10% |
| On completion of each floor slab | 5% × 6 = 30% |
| On completion of brickwork | 10% |
| On completion of plastering | 10% |
| On completion of flooring & fittings | 10% |
| On possession / offer of possession | 10% |
Schedules vary by project. What matters is the shape: money follows concrete. Insist that the final 5–10% is payable ON POSSESSION, not before it — that last slice is your only leverage at the very end, when it matters most.
Why it's the safest plan
A builder who has your money has no reason to hurry. A builder who wants your money has every reason.
Under a CLP, if construction stalls, your payments stall with it. You are not funding a building that isn't being built. Your exposure grows only as the building does.
Under a down-payment plan, they have 90% of your money on day one. Your leverage is gone, and you spend the next four years asking politely.
There's a second, quieter benefit. Because your bank disburses in stages, you pay interest only on what has been disbursed. Early in the project that is a small fraction of the loan — so your pre-EMI outgo is much lower than under a down-payment plan.
What you actually pay in interest
CLP vs Down Payment — interest before possession
₹80 lakh loan, 8.5%, 3 years to possession.
- Down payment plan — full ₹80L disbursed at once
- Interest over 3 years
- ≈ ₹20,40,000
- Construction linked — staged disbursal
- Interest over 3 years (avg. ~50% disbursed)
- ≈ ₹10,20,000
- CLP saves you roughly
- ₹10,20,000
The down-payment plan offered a 5–8% discount. On ₹80 lakh that is ₹4–6.4 lakh. The staged disbursal under a CLP saved more than that — and kept your leverage.
What to watch for
1. Front-loaded schedules
Some "CLPs" demand 40–50% before the foundation is even complete. That is a down-payment plan wearing a CLP's clothes. Read the schedule, not the label.
2. Milestones you can't verify
"On commencement of superstructure" is vague. "On completion of the 5th floor slab" is checkable. Insist on milestones a person can go and look at.
3. Nothing left for possession
If the schedule has you paying 100% before possession, you have no leverage at the moment you most need it — when you're inspecting the flat and finding the snags. Keep 5–10% for the possession milestone.
4. Demands raised before the work is done
It happens. Go and look, or send someone. Pay for the stage that is finished, not the stage that is claimed.
Compared to the alternatives
| Construction Linked (CLP) | Down Payment Plan | Subvention Scheme | |
|---|---|---|---|
| How you pay | In instalments, as each construction stage completes | 80–95% upfront, soon after booking | 10–20% upfront. The bank disburses the rest to the builder. |
| Discount | None | 5–10% — the biggest on offer | None, usually |
| Who pays interest before possession | You — but only on what's been disbursed so far | You — on the whole loan, from day one | The builder pays your pre-EMI until possession |
| Your leverage if they're late | Strong. They only get paid when they build. | None. They already have your money. | Weak. The loan is in your name regardless. |
| Risk to you | Lowest | Highest | Hidden — see below |
| Whose credit score is on the line | Yours | Yours | Yours — even though the builder is paying |
There is no free lunch in the subvention row. Read the subvention page before you sign one.
Frequently asked questions
What is a construction linked plan?
A payment plan where each instalment is triggered by a construction milestone — foundation, each slab, brickwork, plaster, possession. You pay as they build, rather than upfront.
Is a construction linked plan better than a down payment plan?
For most buyers, yes. Two reasons. Your leverage survives: a builder who wants your next instalment has a reason to keep building. And because your bank disburses in stages, you pay interest only on what's been disbursed — which typically saves more than the 5-8% discount a down-payment plan offers.
How much do I pay upfront in a CLP?
Usually 10% on booking and 10% on agreement, then instalments tied to milestones. Note that RERA caps the advance a builder may take before a written agreement at 10% of the cost.
What should I check in a CLP schedule?
Three things. That it isn't front-loaded (40-50% before the foundation is a down-payment plan in disguise). That the milestones are physically verifiable — 'completion of the 5th floor slab', not 'commencement of superstructure'. And that 5-10% is payable ON possession, so you keep leverage for the snag inspection.
Do I pay interest on the full loan under a CLP?
No. The bank disburses in stages against the same milestones, and you pay interest only on the amount actually disbursed. Early in the project that's a small fraction of the loan, so your pre-EMI outgo is far lower than under a down-payment plan.