What is construction-linked plan (CLP)?
Also called: CLP, construction linked payment plan, CLP plan, stage-wise payment plan
On a construction-linked plan you pay the builder in instalments tied to construction milestones such as the plinth, each floor slab, finishing and possession. It is the most common plan for under-construction flats and the one banks prefer to fund.
Most loan-funded buyers of under-construction flats end up on a CLP, whether or not they choose it, because banks disburse home loans in stages against the builder's demand letters. A common NCR schedule is 10% at booking, another 10% on agreement, a chunk on completion of the plinth, then equal instalments across the floor slabs, with the last 5% to 10% at possession along with IFMS, parking and similar charges. MahaRERA's model agreement for Maharashtra is more prescriptive: it allows up to 30% on execution of the agreement, 45% by completion of the plinth, 70% once the slabs are done, and only the last 5% on possession.
The appeal is that your money moves only as the building rises, so if the project stalls you have paid for roughly what exists. While the loan is being released in stages you pay pre-EMI, which is interest only on the amount disbursed so far.
The weak point is how a milestone gets certified. The demand usually comes with an architect's certificate saying, for instance, that the 12th floor slab has been cast. Buyers rarely check, but they can. Promoters must upload quarterly progress updates on the state RERA website, and a site visit with a phone camera costs nothing. Some builders race through slabs to trigger payments and then slow down on finishing, which is why the last 30% of a building so often takes longer than the first 70%.
If the project runs late, the plan also decides how much of your money is stuck. On a ₹90 lakh flat where 80% has been paid, a two-year delay means ₹72 lakh locked in a building you can't live in, plus pre-EMI and rent. Section 18 of the RERA Act entitles you to interest for every month of delay, or a refund with interest if you withdraw.
On a ₹1 crore flat in Noida bought on a CLP, the buyer pays ₹10 lakh at booking from savings. The bank then releases money slab by slab, and the monthly pre-EMI climbs from about ₹5,000 after the first disbursement to over ₹50,000 by the time most of the loan is out.
Paying a demand without checking that the milestone has actually been reached. Compare it with the site and the quarterly progress report on the RERA portal first.
Questions people ask about construction-linked plan (CLP)
Is CLP better than a down-payment plan?
For most buyers, yes, because payments follow actual construction and less money is at risk if the project stalls. A down-payment plan only makes sense with a sizeable discount on a nearly complete project.
Do I pay EMI during a construction-linked plan?
Usually you pay pre-EMI, which is interest on the amount disbursed. Full EMI starts once the loan is fully disbursed or when you choose to start it early.