How useful is ADF scheme of bank? - Indian Real Estate Forum

eager · 12-06-09

Hi,
Can anyone tell me advantages and disadvantages of using ADF scheme of bank.

All i know is:-

As per RBI rule, only the bank from which the builder has got loan, can offer ADF. As a result of it, the builder gets full loan payment w/o any payment schedule barrier.

Advantages:
1) Builders offer lower rate to such clients. Generally, 25Rs/sq ft less.

Disadvantages
1) No choice of which bank to chose for loan
2) Builder gets entire amount in one go. I don't know how it might come back to you in case of any disaster.

Any more inputs?

Mahesh and Vbrege, I would like to know your views also.

vbrege · 12-06-09

eager,

I am not sure I have heard of ADF before so cant offer much help. Can you please share the details of what ADF means etc?

mahesh pune · 12-06-09

Palas offered similar scheme first sept 08 and got 42 booking on day of launching. They offer to pay EMI till possesion (Around 6 lakhs for 2 years). few other builders like runwal offered only to pay 12 months emi. Advantage with scheme at Palash is that as builder is paying EMI he has to give possesion at time. You can also save interest amount from EMI he is paying. As bank is paying complete loan you have not paid anything (other than down payment 15%) till possesion. But do not go for such scheme (if builder is not paying complete EMI) for discount of 25 psf.even not for 500 psf.

aviraj · 12-06-09

Never go in for ADF. This is advantageous for the builder only. A difference of 25-50 Rs/sqft is very less in comparison to the extra EMI that you will be paying. Remember that you cannot claim tax deduction on the principal and interest component of the EMI till construction is completed, hence additional EMI really has no advantage for you. Also in case the builder goes slow on the construction later on, its best if you have not paid him the full amount before hand. That way atleast you have some control over the payments.

thatsnick001 · 31-01-10

I had been to Palash and came to know abt the ADF as well for the first time.

Infact I found it a good scheme...as the builder pays you until the construction is complete. so
1. He has to give possession on time.
2. If the loan taken is less than the EMI they pay...its like you get more money than your EMI is cut...
3. Take it as a discount that th=e builder is paying...

Althogh in case of Palash, the rate comes to be 3400 and after this disctount ...around 2800 ... which is also high ..

Let me knwo if I have gone wrongin any of the calculations above.

Thanks

thatsnick001 · 31-01-10

I had been to Palash and came to know abt the ADF as well for the first time.

Infact I found it a good scheme...as the builder pays you until the construction is complete. so
1. He has to give possession on time.
2. If the loan taken is less than the EMI they pay...its like you get more money than your EMI is cut...
3. Take it as a discount that th=e builder is paying...

Althogh in case of Palash, the rate comes to be 3400 and after this disctount ...around 2800 ... which is also high ..

Let me knwo if I have gone wrongin any of the calculations above.

Thanks

search4re · 01-02-10

ADF - Aapko Dubanewala Fund

. Jokes apart you can land in serious trouble with this option

purevision · 01-02-10

Quote:

Originally Posted by search4re

ADF - Aapko Dubanewala Fund

. Jokes apart you can land in serious trouble with this option

I have burnt my fingers with ADF.
There is no benefit to end customers at all.
I am seriously troubled using this option when possession is delayed by more than year and half and all my finances are ruined

ravick4u · 17-02-12

Even Lodha has also started this and I also feel that we (buyer) should not go for this.

There is no benefit on buyers side.

12-06-09	#1
eager New Member Join Date: May 2009 Posts: 5 Thanks: 0 Thanked 0 Times in 0 Posts	How useful is ADF scheme of bank? Hi, Can anyone tell me advantages and disadvantages of using ADF scheme of bank. All i know is:- As per RBI rule, only the bank from which the builder has got loan, can offer ADF. As a result of it, the builder gets full loan payment w/o any payment schedule barrier. Advantages: 1) Builders offer lower rate to such clients. Generally, 25Rs/sq ft less. Disadvantages 1) No choice of which bank to chose for loan 2) Builder gets entire amount in one go. I don't know how it might come back to you in case of any disaster. Any more inputs? Mahesh and Vbrege, I would like to know your views also.

31-01-10	#5
thatsnick001 Member Join Date: Jul 2009 Posts: 52 Thanks: 0 Thanked 0 Times in 0 Posts	why no ADF? I had been to Palash and came to know abt the ADF as well for the first time. Infact I found it a good scheme...as the builder pays you until the construction is complete. so 1. He has to give possession on time. 2. If the loan taken is less than the EMI they pay...its like you get more money than your EMI is cut... 3. Take it as a discount that th=e builder is paying... Althogh in case of Palash, the rate comes to be 3400 and after this disctount ...around 2800 ... which is also high .. Let me knwo if I have gone wrongin any of the calculations above. Thanks

31-01-10	#6
thatsnick001 Member Join Date: Jul 2009 Posts: 52 Thanks: 0 Thanked 0 Times in 0 Posts	edit I had been to Palash and came to know abt the ADF as well for the first time. Infact I found it a good scheme...as the builder pays you until the construction is complete. so 1. He has to give possession on time. 2. If the loan taken is less than the EMI they pay...its like you get more money than your EMI is cut... 3. Take it as a discount that th=e builder is paying... Althogh in case of Palash, the rate comes to be 3400 and after this disctount ...around 2800 ... which is also high .. Let me knwo if I have gone wrongin any of the calculations above. Thanks

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12-06-09	#2
vbrege New Member Join Date: May 2009 Posts: 41 Thanks: 0 Thanked 0 Times in 0 Posts	eager, I am not sure I have heard of ADF before so cant offer much help. Can you please share the details of what ADF means etc?

12-06-09	#3
mahesh pune Senior Member Join Date: Apr 2009 Posts: 504 Thanks: 0 Thanked 1 Time in 1 Post	Palas offered similar scheme first sept 08 and got 42 booking on day of launching. They offer to pay EMI till possesion (Around 6 lakhs for 2 years). few other builders like runwal offered only to pay 12 months emi. Advantage with scheme at Palash is that as builder is paying EMI he has to give possesion at time. You can also save interest amount from EMI he is paying. As bank is paying complete loan you have not paid anything (other than down payment 15%) till possesion. But do not go for such scheme (if builder is not paying complete EMI) for discount of 25 psf.even not for 500 psf.

12-06-09	#4
aviraj Member Join Date: Jun 2009 Posts: 76 Thanks: 0 Thanked 0 Times in 0 Posts	Never go in for ADF. This is advantageous for the builder only. A difference of 25-50 Rs/sqft is very less in comparison to the extra EMI that you will be paying. Remember that you cannot claim tax deduction on the principal and interest component of the EMI till construction is completed, hence additional EMI really has no advantage for you. Also in case the builder goes slow on the construction later on, its best if you have not paid him the full amount before hand. That way atleast you have some control over the payments.

01-02-10	#7
search4re Member Join Date: Jan 2010 Posts: 127 Thanks: 0 Thanked 0 Times in 0 Posts	ADF - Aapko Dubanewala Fund . Jokes apart you can land in serious trouble with this option

17-02-12	#9
ravick4u New Member Join Date: Mar 2010 Posts: 1 Thanks: 0 Thanked 0 Times in 0 Posts	Even Lodha has also started this and I also feel that we (buyer) should not go for this. There is no benefit on buyers side.