What is possession-linked plan (PLP)?

These plans are named by their split. A 10:90 plan means 10% at booking and 90% at possession; 20:80 and 30:70 are common in Gurugram, Noida and Mumbai's suburbs. Some add a middle instalment, say 40% at the top slab, so the builder isn't funding all of the construction itself.

For buyers the attraction is obvious. Most of your money stays with you until the flat is ready, and a delay hurts far less than it would under a construction-linked or down-payment plan. If you're still renting, you avoid paying rent and pre-EMI side by side for three years. It also says something about the developer: one willing to wait for 70% or 90% of its revenue usually has construction finance arranged or a strong balance sheet. A sudden rush of PLP offers in a slow market, though, can mean the builder is struggling to sell.

The price difference is where the arithmetic comes in. PLP units are often quoted 3% to 8% above the CLP price for the same flat. On a ₹1.2 crore flat, 5% is ₹6 lakh. Set that against the pre-EMI you'd pay under a CLP and the risk you avoid, and the premium often looks fair.

The hard part comes at possession. You'll need 70% or 90% of the price at once, and a loan sanction issued at booking may have lapsed or need reassessing by then. Keep it alive or get a fresh sanction three to four months before the expected OC. Read what the agreement calls 'possession' too. The big instalment should fall due on an offer of possession backed by an occupancy certificate, not on a 'fit-out possession' letter sent before the OC arrives.