Parallel Funding – An innovative Financial SchemeAugust 14, 2018
Indian Residential Market has seen a substantial slowdown in the recent times. The demonetization, hike in land prices have impacted the residential market. One other important concern is, even after banks offering home loans; buyers still struggle to arrange for the down payments. This has even impacted the sales of Banks and Financial Institutions. To solve this financial crunch both developers and Banks/Financial institutions have come together to attract property buyers by offering attractive financing schemes. Below are some of the popular financial schemes banks offers;
One of the good old scheme banks offer. Subvention scheme works in the pattern of 20:80 ratio. In this scheme, the buyer has to pay only 20% of the total cost and balance 80% can avail as a loan .However, this scheme differs from conventional loan, under this scheme the EMI for the initial period of 2 or 3 years or till possession will be paid by the developer and the buyer starts paying EMIs only thereafter.
Parallel/Pro rata funding
One of the very recent schemes which Banks has introduced is ‘Parallel Funding’ or ‘Pro-rata Funding’. Parallel Funding is recently becoming very popular among developers and Banks.
As per the conventional loan, the buyer has to first invest his contribution of 20% before the bank can disburse the loan. For e.g. If a property costing one core, the buyer should invest twenty lacs initially from his pocket and then the banking procedure starts. Most of the times, the buyers find this as a struggling phase. This is where the concept of parallel funding helps. The main objective of Parallel Funding is to reduce the initial burden on the buyer and make the property buying more attractive and easy. In parallel funding, the bank will disburse the loan amount according to the proportion of the buyer contribution. Several combinations can be worked out in Parallel funding, like 15:75:10 or 5:75: 15 etc. Combinations are worked out based on the buyers’ requirements, lenders flexibility, construction stage etc.
Ladder Kerala is one of the Top builders in Calicut and Ottapalam offering premium residential properties. Ladder finance team helps you with right direction according to your financial stability and connects with you to right banking partner. For details on our projects visit us http://ladderkerala.com/projects/