Tranche-based repayment plan:
Here, the construction stage of the project directly influences the interest payment. Since this type of home loan is offered only by some banks, it makes sense to ask your lending bank if they offer it. In this scheme, the borrower pays interest on the home loan amount according to the stage of construction the house is in and till it is completed. This scheme helps the borrower save on the interest amount.
The minimum amount to be paid is the interest on the total loan amount. The home loan borrowers can discuss with the bank and fix an amount according to their repayment capacity till the house is ready for occupation.
Step-up repayment plan:
This usually works for those employed and is directly linked to the borrowers’ growth in income over the home loan tenure. The step-up option helps borrowers avail a higher loan amount than usual. Here again, it depends on the lending bank and discussing this plan with the bank seems wise.