Beware of 'No EMI till Possession' Schemes: Reddit User Warns Homebuyers
A Reddit user has warned Indian homebuyers about the pitfalls of 'No EMI till possession' schemes, cautioning that these can trap buyers into paying EMIs for homes they may never receive.
Home LoanReal EstateEmiBuilderSubvention SchemeReal Estate NewsAug 18, 2025
But on the flip side, several builders and their bogus “No EMI till possession” scheme have trapped as many as 4.3 lakh Indians into paying EMIs for a home that they may never get, warned a Reddit user.
“It starts with a dream, your own home. The builder offers a ‘No EMI till possession’ scheme. You pay 10% upfront, the bank releases 80% of the loan, and the builder promises to cover pre-EMIs for 2–3 years,” the user said in a now-viral post.
However, he cautioned that although it “sounds safe,” that’s exactly how lakhs of Indians got trapped.
“Across India, 4.3 lakh homebuyers are now stuck paying EMIs for stalled projects. Builders stopped paying, vanished, or kept dragging construction for years. Meanwhile, buyers are paying both rent and EMIs for homes they’ll likely never receive,” the user claimed in the lengthy Reddit post.
The Redditor explained that the ugly truth is that the home loan is in your name, not the builder’s. “If they default, the bank still comes after you. Even if the house isn’t delivered, you must pay. Miss an EMI? Your credit score takes the hit.”
“Builders have misused these schemes shamelessly: diverting funds to other projects, faking milestones, even issuing bogus completion certificates,” he said, citing examples of tens of thousands of such stalled units in cities like Noida, Thane, Greater Noida, and Gurugram.
“For many families, it’s a financial nightmare and years of savings gone, future income locked, and nothing to show for it. Some booked homes when their kids were in school; today, the kids are in college, and the home is still a construction site,” the user added.
Reiterating his warning, the Redditor said, “Never fall for ‘No EMI till possession’ traps. Avoid subvention schemes unless you’ve verified every detail; RERA registration, escrow accounts, builder’s financials.”
“In real estate, trust without verification is how dreams turn into debt,” he added.
Several social media users resonated with the Redditor's advice and also shared their personal experiences with builders.
“Never ever book homes in under-construction projects. Take this from someone whose family has had nearly 50 crore worth of property stuck in underconstruction and abandoned projects. RERA, Courts, police/criminal cases, we have done it all, but to no avail. It's just a huge waste of time, sanity, efforts, and money,” a user suggested.
“Trust no one. Assume everyone is a fraud, because builders are complete goons and frauds by definition,” added another.
A user said, “Booking a flat before construction is like paying double the amount. Never invest unless the flat is almost ready to move in.”
Another said, “Unfortunately, in buying land, building or construction, Trust plays a great role, and there isn't any way one can verify this, especially in the space where the players aren't known or aren't familiar.”
Frequently Asked Questions
What is a 'No EMI till possession' scheme?
A 'No EMI till possession' scheme is a marketing strategy used by builders where homebuyers are required to pay only a small upfront amount, and the builder promises to cover the EMIs until the property is ready for possession.
Why are these schemes risky?
These schemes are risky because builders may default on their promise to cover the EMIs, vanish, or delay construction, leaving buyers to pay EMIs for homes they may never receive.
What should homebuyers do to avoid these traps?
Homebuyers should avoid subvention schemes unless they have verified every detail, including RERA registration, escrow accounts, and the builder’s financials. It’s crucial to verify the builder’s credibility and track record.
What happens if the builder defaults on the 'No EMI till possession' scheme?
If the builder defaults, the home loan remains in the buyer's name, and they are still responsible for paying the EMIs. Missing an EMI can negatively impact the buyer’s credit score.
Are there any legal protections for homebuyers in such schemes?
While RERA (Real Estate Regulatory Authority) provides some legal protections, it is not foolproof. Homebuyers should still conduct thorough due diligence and consider legal advice before entering into any such scheme.
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