‘Never fall for no EMI till possession trap’: Reddit user warns Indians of home loan scam; netizens react

Owning a house is a dream for every Indian, especially the middle class. However, skyrocketing inflation in the real estate sector and a never-ending housing loan have forced many to pause this dream.

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.

Here’s how netizens reacted:

Several social media users resonated with the Redditor’s advice and also shared their personal experience 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.”