A Complete Guide to the 20:80 Payment Plan: A Smarter Way to Buy Your Dream Home
Buying a home—especially in a high-demand market like Mumbai—can feel financially overwhelming. However, innovative payment structures like the 20:80 payment plan have made property ownership more achievable for homebuyers and investors alike.
At Urvik Consulting, we help clients make informed real estate decisions. This guide breaks down how the 20:80 payment plan works, its advantages, potential risks, and whether it’s the right strategy for you
What is the 20:80 Payment Plan?
The 20:80 payment plan is a buyer-friendly scheme typically offered on under-construction properties. Under this structure:
20% of the property cost is paid at the time of booking.
No EMIs or additional payments are required during the construction phase.
The remaining 80% is financed via a bank loan, payable at the time of possession.
This deferred payment structure allows buyers to secure their dream home today, without the immediate financial burden of loan repayments.
How the 20:80 Plan Works
Here’s a simple breakdown of the payment schedule:
| Payment Stage | Amount Payable | Timeline |
|---|---|---|
| Booking Payment | 20% of total property cost | At booking |
| During Construction | No payment or EMI required | Until possession |
| Final Payment | 80% (bank loan disbursed) | On possession |
Unlike traditional home loans where EMIs begin immediately, this plan ensures you’re not financially stretched during the construction period. It’s particularly useful for first-time buyers who may be balancing rent and savings.
Benefits of the 20:80 Payment Plan
1. Financial Relief During Construction
Buyers are not burdened with EMIs or additional payments until the home is ready, giving them breathing room to plan finances or continue living in a rental without double expense.
2. Reduced Financial Risk
Since the bulk of the payment is due only on possession, buyers face less financial risk in case of construction delays—especially when investing in RERA-registered projects that ensure legal compliance and accountability.
3. Better Investment Opportunity
Property values typically rise during the construction period. The 20:80 plan enables buyers to lock in today’s price while paying the majority later, maximizing potential return on investment.
4. Improved Cash Flow
Buyers can use the time during construction to build savings or manage other financial commitments. This also reduces dependency on short-term borrowing.
Who Can Apply for the 20:80 Plan?
Most major banks and NBFCs offer home loan approvals under this scheme, subject to eligibility. Here’s what you typically need:
Eligibility Criteria
| Factor | Requirement |
|---|---|
| Minimum Income | Based on property value & location |
| Credit Score | 700+ preferred |
| Employment Type | Salaried or self-employed |
| Loan Eligibility | Based on income and liabilities |
Required Documents
Identity proof (Aadhar, PAN, etc.)
Address proof
Latest salary slips or audited financials (for self-employed)
Income tax returns (last 2–3 years)
Bank statements (last 6 months)
Property-related agreements
Risks to Consider (and How to Avoid Them)
Like any financial commitment, the 20:80 plan carries some risks. Here’s what to watch out for:
| Risk | Potential Issue | How to Mitigate |
|---|---|---|
| Project Delays | Delayed possession affects loan timing | Choose RERA-registered, reputed builders |
| Hidden Charges | Surprise costs at possession | Review builder agreements in detail |
| Loan Rejection | Last-minute bank loan issues | Get pre-approval based on credit score |
Tip: Work only with established developers and real estate consultants like Urvik Consulting who can help verify project credentials and legal clearances.
Final Thoughts: Is the 20:80 Plan Right for You?
The 20:80 payment plan is ideal for:
- First-time homebuyers seeking affordability
- Investors looking for long-term capital appreciation
- Buyers who want to avoid overlapping rent and EMIs
- However, financial discipline is key. Ensure that by the time of possession, your loan is approved and you’re ready to handle the final payment.
Work with Urvik Consulting
At Urvik Consulting, we help you navigate complex real estate transactions with confidence. Whether you’re purchasing your first home or making a strategic investment, our advisors will guide you through:
Choosing the right property
Securing home loan approvals
Planning your finances with minimal risk
Contact us today to explore properties with structured payment plans like 20:80, and take the first step toward stress-free homeownership.