Hi All,

I have taken 30,71,000 home loan from SBI for a tenure of 20 years. Interest rate is 8 % 1st year, 9% for 2nd and 3rd year and then floating. SBI has included 18 months of Moratorium period since property will be ready by then, and they will charge only interest part and not principal during this period. Now builder is demanding me to avail ADF facility with SBI. I feel that ADF is not good for me because even on face I am paying extra with Moratorium option, if I invest balance part of EMI for a period of 20 years with average 10 % yearly return that would fill the extra amount I am paying. And second advantage is that I can keep check on builder for work completion to my satisfaction.

Can you please help me decide on which option to choose ADF or Moratorium period?Thanks in advance for your time and help.

4 Answers

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1 ashal jauhari April 1, 2011 at 12:15 am

Dear Prithvi, From your query it seems SBI has granted your the home loan with CLD (Construction Linked Disbursal). In my view it’s a favorable situation to you as the CLD ‘ll ensure that your builder ‘ll get the funds only after completing certain milestones linked to the constructions stages.




2 Prithviraj D Desai April 7, 2011 at 5:05 pm

Thanks Ashal.


3 Kaushik G August 12, 2013 at 11:16 am

Hi Ashal,
A related question –
I’m going for a home loan with SBI for an under-construction apt. The builder told me that they have got a tie-up with SBI for ADF (Advance Disbursement of Funds) in which abt 80-90% of the total loan amount would be disbursed initially itself to the builder (as opposed to staggered disbursement).

The builder is trying to sell this to me saying this would be beneficial both for them & me. According to this scheme, the builder would be paying abt 50% of the pre-EMI amount while I would pay the other 50%. My questions –

1. I was planning on beginning my EMI payment straightaway (as opposed to pre-EMI). Can this ADF scheme be clubbed with normal EMI payment as opposed to pre-EMI?

2. Assuming I go in for the ADF scheme, how can I calculate in exact numbers how this would be beneficial for me? The builder tried explaining this to me by linking it with the actual rate per sq ft (I have no idea why). I want to make sure I understand it before going for it.

I tried googling abt ADF, but there dont appear to be too many articles on this, as this seems to be a new scheme that is picking pace now. Came across a comment on your post, so I thought you might know. Any advice/suggestions on this would be much appreciated.



4 Ashal Jauhari August 12, 2013 at 2:25 pm

Dear Kaushik, in simple words, builder is getting around 90% fund from you straight away. In case the building is not completed in time, you ‘ll feel a lot of pain.

Please do not opt for ADF. Opt for a regular CLP based loan. In case building id delayed here, your interest outgo ‘ll be less from your EMI as the amount of loan disbursed ‘ll be linked to the actual construction.




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