The Prime Minister, Narendra Modi in the New Year address to the nation announced the Pradhan Mantri Awas Yojana for people who fall in the middle-income class. Recently, the government has finalized the guidelines for the scheme, and the subsidy available as part of this programme is termed as “Credit-Linked Subsidy Scheme for Middle Income Groups” (CLSS – MIG).
Initially, the plan will be available for one year. According to the PMAY, middle-income bearers are eligible for an interest subsidy of 3% to 4% on their home loan EMIs.
That’s good news. Now, how do you avail this subsidy? Are you eligible? If yes, how to apply for the scheme while getting an easy home loan ?
How to Reduce Home Loan EMI with the PMAY
Here’s all that you need to know to about this beneficial scheme.
Eligibility Criteria- Low-Income Home Loans
Still thinking about that “How to reduce home loan EMI”, You just need to follow following Eligibility Criteria:
All home loans sanctioned or in the approval process after January 1, 2017, are eligible for availing the interest subsidy in this plan.
People who fall in the annual income bracket between 6 lakhs to 18 lakhs are eligible to avail the subsidy offered by this scheme.
Individuals with a yearly income of 12 lakhs and who have availed housing loans of up to 9 lakhs are eligible for a reduction in their home loan EMIs by 4%. Annual income holders of up to 18 lakhs with housing loans of 12 lakhs can avail 3% subsidy on their interest rates.
All families with a husband, wife and unmarried children are eligible for this grant. It includes construction of a new house or acquisition of a newly built home or even repurchase of an existing home. Even young unmarried men and women can apply for the CLSS-MIG subsidy.
Interest and EMI of the Home Loans under the PMAY
Don’t worry about “How to reduce home loan EMI“, All the information about Interest Rates and EMI of home loan under the PMAY is given below:
The maximum tenure of the housing loans under this scheme is 20 years.
The National Housing Bank will pay the entire subsidy in one go to your lender. This further reduces your EMI burden.
Mr.Sri Kalayanaraman, the MD, and CEO of the National Housing Bank in his address informed that the interest subsidy of 4% would reduce the EMI by Rs.2062/- per month for a housing loan of 9 lakhs. Similarly, at 3% subsidy, the EMI of 12 lakhs loan will reduce by Rs.2019/- per month.
First Preference for Women
As per this scheme, women are given preference over men. Single working women, widows, differently abled women, transgenders, people belonging to scheduled castes and tribes are given first preference as part of this scheme.
Borrowers can express a desire to avail this subsidy at their lenders. The lenders then get an undertaking from the customer assuring that this is the only home in their name. No extra processing fee is charged to avail this subsidy.
The borrower can then either opt for reduced EMIs or repay the loan quickly with the current EMI.
To increase the implementation of this subsidy, several small finance banks, microfinance institutions, and NBFCs (Non-banking finance companies) have been chosen as Primary Lending Institutions.
This scheme is an excellent way to bring down the home loan burden for the end user. Check out if you’re eligible and avail the benefits of this project.