As part of the “Housing for All by 2022” initiative and to give a boost to the real estate sector in India, the government introduced a credit-linked Subsidy scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) using which you can enjoy a reduced interest rate on home loan’s repayment from December 2017 to March 2019.
- You or your family should not own a pucca house in any part of the country
- If you are married, then you and your spouse are eligible for only one subsidy (irrespective of whether either of you applies or both of you apply in a joint ownership)
- Your family shouldn’t have obtained any central assistance from any housing scheme from the government of India or otherwise under the PMAY.
- The house purchased should not be bigger than 643 sq. ft. if your household income is below Rs 6 lakh a year (EGS and LIG group).
- It shouldn’t be bigger than 965 sq. ft. if your household income ranges between Rs. 6 lakh to Rs. 12 lakh (MIG 1 group).
- It shouldn’t be bigger than 1,287 sq. ft. if your household income ranges between Rs. 12 lakh to Rs. 18 lakh (MIG 2 group).
The following gives the details of the home loans interest subsidy on that you qualify for:
- EWS and LIG: Interest subsidy of 6.50%
- MIG 1: Interest subsidy of 4%
- MIG 2: Interest subsidy of 3%
Where can you apply for the subsidy?
Almost all public-sector banks and home finance companies are offering the subsidy scheme. However, you can find it available with the microfinance institutions as well. Some of the lenders that are confirmed to be offering the benefit includes Tata Capital, LIC Housing Finance, ICICI HFC, YES Bank, Muthoot Finance, and PNB Housing Finance.
The CLSS scheme aims at increasing the institutional credit flow to the housing requirements of the people. At the same time, it intends to bolster the real estate industry by increasing the demand.
The government has partnered with several primary lending institutions (given above) to provide a relaxation in the Equated Monthly Instalments (EMI) with the help of an interest rate subsidy.
The good thing about CLSS home interest subsidy is that you can apply for it for properties that are under construction and not just the ones that are pre-constructed. It’s also regulated by top organizations viz. National Housing Board (NHB), and the Housing and Urban Development Corporation (HUDCO) so that the people who are applying for home loans are able to avail this facility.
How can I make the most of it?
If you want to enjoy the home Loan Subsidy, then the first thing you need to do is check the eligibility criteria. This is because you can avail it only if you qualify. If you haven’t picked a home yet, then you can choose one that fulfills the requirements so that you can get the most of it.
The maximum amount of subsidy that you can claim as per your category under the CLSS is fixed. However, you can still get more money in your home loan through other ways. One of these is a CIBIL score check.
With a high CIBIL score, it’s possible that you can get a lower interest rate from your lender, which when combined with the loan subsidy can greatly reduce your repayment burden. Besides, it’s not difficult to increase CIBIL score if you have even some knowledge about how it works.
If you have never applied for your CIBIL score, then here’s good news for you-you can get a free CIBIL score check for your first application. This is because the RBI has asked all the credit bureaus to provide a free credit score once every year.
The home loan subsidy scheme is no less than a boon for the prospective home buyers, especially considering the high-interest rates that have become more of a norm today. So, go get the details and see if you qualify. You are sure to save a lot of money if you apply and get it confirmed.
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