Home is essential for all families. If you or any of your family members don’t own a pucca house, then you might be eligible for Credit Linked Subsidy Scheme. (CLSS) under Pradhan Mantri Awas Yojana (PMAY) affordable housing scheme. This affordable housing scheme covers all the people falling under Economically Weaker Sections (EWS), Low Income Group (LIG)and Middle-Income Groups (MIG I and II).
You may be wondering what is PMAY subsidy? While PMAY is a broader scheme that aims to provide Housing for all, CLSS provides subsidies in the interest rate payable on home loans to make home-buying more affordable.
How does CLSS work?
As an instance, let’s say you have taken a home loan of Rs. 9 lakh for 20 years at a 9% interest rate. Under PMAY affordable housing scheme, if you are eligible for the middle-income-group I category, you’ll get an interest subsidy of 4%, which will make your effective interest rate of 5%. The total subsidy on your home loan would be Rs. 2,35,068.
Now, you can get a loan of higher amount depending on your eligibility, but the maximum amount for interest subsidy under CLSS that you will be eligible for would remain Rs. 9 lakhs under the MIG I category. Similarly, if you choose to opt for a longer tenure but the subsidy you can avail for will remain a maximum of 20 years. So, even if you take a loan of Rs. 10 lakhs for a tenure of 30 years, you will be eligible for Rs. 9 lakhs for 20 years. Additionally, you will be charged Rs. 1 lakh at regular home loan rates on the remaining loan amount for a period beyond 20 years (i.e. for the balance 10 years).
How to avail PMAY subsidy?
If you want to claim subsidy under PMAY – affordable housing scheme; your home loan must have been approved on or after January 1, 2017, as this affordable housing scheme is valid till March 31, 2022, for EWS/LIG segments and March 31, 2020, for MIG segments only. The subsidy is given on the behalf of your loan provider; you don’t have to do it in person. To claim the subsidy, all you need to do is submit a declaration, that must confirm your eligibility by fulfilling all the criteria. Once you have successfully submitted the application, your bank or the lending institution which you’ve applied for a loan will complete all the requisite formalities and file for a subsidy on your behalf. Now, you just have to be patient, the subsidy amount will be automatically credited to your home loan account as soon as the nodal agency such as the National Housing Bank approves your application.
To conclude, PMAY has made homeownership easier and cheaper for first-time buyers.
You may be wondering what is PMAY subsidy? While PMAY is a broader scheme that aims to provide Housing for all, CLSS provides subsidies in the interest rate payable on home loans to make home-buying more affordable.
How does CLSS work?
As an instance, let’s say you have taken a home loan of Rs. 9 lakh for 20 years at a 9% interest rate. Under PMAY affordable housing scheme, if you are eligible for the middle-income-group I category, you’ll get an interest subsidy of 4%, which will make your effective interest rate of 5%. The total subsidy on your home loan would be Rs. 2,35,068.
Now, you can get a loan of higher amount depending on your eligibility, but the maximum amount for interest subsidy under CLSS that you will be eligible for would remain Rs. 9 lakhs under the MIG I category. Similarly, if you choose to opt for a longer tenure but the subsidy you can avail for will remain a maximum of 20 years. So, even if you take a loan of Rs. 10 lakhs for a tenure of 30 years, you will be eligible for Rs. 9 lakhs for 20 years. Additionally, you will be charged Rs. 1 lakh at regular home loan rates on the remaining loan amount for a period beyond 20 years (i.e. for the balance 10 years).
How to avail PMAY subsidy?
If you want to claim subsidy under PMAY – affordable housing scheme; your home loan must have been approved on or after January 1, 2017, as this affordable housing scheme is valid till March 31, 2022, for EWS/LIG segments and March 31, 2020, for MIG segments only. The subsidy is given on the behalf of your loan provider; you don’t have to do it in person. To claim the subsidy, all you need to do is submit a declaration, that must confirm your eligibility by fulfilling all the criteria. Once you have successfully submitted the application, your bank or the lending institution which you’ve applied for a loan will complete all the requisite formalities and file for a subsidy on your behalf. Now, you just have to be patient, the subsidy amount will be automatically credited to your home loan account as soon as the nodal agency such as the National Housing Bank approves your application.
To conclude, PMAY has made homeownership easier and cheaper for first-time buyers.
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