Everything you need to know about the PMAY scheme before availing housing loans in 2021?

According to a recent report, the housing sector is predicted to grow by 10-13% in FY22, strengthening its foothold in the Indian economy. An amalgamation of offers, reduced interest rate, stamp duty, etc., have helped bolster this growth.

Nonetheless, purchasing a house requires investing substantial funds altogether, which can be challenging for the economically weaker section of the society. To fulfil this demand of owning a property, the Indian government launched the PMAY scheme to offer housing for every Indian by 2022.

This scheme offers an attractive subsidy based on an individual’s income. Beneficiaries are required to repay the reduced interest and EMI, unlike the traditional credit forms.

It is important to understand the scheme’s features and functions to make the most out of the PMAY subsidy in 2021.

What is PMAY CLSS?

PMAY scheme compiles plans and projects to support the need of economically weaker households to purchase a house. An important feature of this scheme is the Credit Linked Subsidy that reduces the interest rate against which individual can avail loans to invest in purchasing a house.

Under the PMAY scheme, the Central Government pays a subsidy of up to Rs.2.67 lakh on the loan amount, thereby reducing the repayment obligation of borrowers. For instance, an individual with an annual income of Rs.6 lakh will receive a fixed subsidy of 6.5% for 20 years.

This is a good way to make lucrative savings for additional house repairs and renovation.

How is the PMAY CLSS divided?

The division under the PMAY scheme are as follows –

  1. Lower Income Group – Annual income between Rs.3 lakh and Rs.6 lakh receive an interest benefit of 6.5% as financial assistance. Here the subsidy loan amount is Rs.6 lakh.
  2. Middle Income Group I – Individuals under this category have an annual income ranging from Rs.6 lakh to Rs.12 lakh. They receive a 4% subsidy benefit against a loan amount of Rs.9 lakh.
  3. Middle Income Group-II – In this category, individuals with an income range of Rs.12 lakh to Rs.18 lakh are included.  Individuals in this category receive a 3% subsidy on a loan of Rs.12 lakh.

Basing on this division, the government allows individuals to secure a home loan under PMAY. This factor is again essential since the interest and EMI outgo is based on the subsidy gained.

Nonetheless, to avail of the subsidy, applicants have to surpass the stringent Pradhan Mantri Awas Yojana eligibility criteria set by the government.

What are the eligibility criteria for the PMAY scheme?

Potential applicants need to fulfil these PMAY eligibility criteria –

  • Individuals belonging to a scheduled caste or scheduled tribe have to submit their respective caste certificates.
  • The age limit to apply for this subsidy is 18 years to 70 years.
  • An applicant must not be an owner of a pucca house.
  • He/she shouldn’t be a beneficiary of an additional home loan subsidy offered by the state or central government.

After clearing these conditions, individuals can keep track of their PMAY status by logging into the official site.

Following this, a beneficiary is needed to submit the mentioned documents. He/she is assisted by the coordinating agencies recognised by the Indian government to avail a loan under the PMAY CLSS scheme.

For instance, if someone fails to qualify under the PMAY list, he/she can look for a lucrative alternative like a housing loan.

This credit form offers substantial funds against an affordable interest rate and EMI. Moreover, individuals have to submit minimum documentation and fulfil simple eligibility. Many HFCs also offer customised benefits like pre-approved offers that make the loan application process hassle-free and swift. Such offers are usually levied on financial products like LAP, home loan, etc. Check the pre-approved offer by providing your name and contact number.

The PMAY initiative by the Central Government is a beneficial scheme to support the dreams of individuals planning to purchase a house in 2021. This CLSS scheme helps in reducing the repayment burden and facilitates healthy savings.

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