How the Government’s (PMAY) Scheme can be Beneficial for You in Owning a Home

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The government housing scheme, Pradhan Mantri Awas Yojana or PMAY Scheme, is best suited for such people who want to purchase or construct a house but might not have the essential financial capacity.

The Indian government launched the PMAY scheme in 2015, and it aims to provide affordable housing to people belonging to the Economically Weaker Section (EWS), Light Income Group (LIG) and Medium Income Group (MIG). The Middle Income Group is further subdivided into two parts – MIG-I and MIG-II. Hence, if you fall in any of the three groups or sections, you can apply for a home loan with an ultra-low interest rate under the PMAY Scheme.

Read on to find everything you need to know before applying for a home loan under the PMAY scheme.

What is Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme?

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Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme or PMAY – CLSS scheme is one of the most critical components of the PMAY scheme. Through this, you can get an interest subsidy on your home loan. Hence, your effective home loan interest rate becomes much lesser than otherwise.

The PMAY-CLSS scheme is available for home loan borrowers belonging to any of the following categories:

  • EWS – Borrowers with an annual income under INR 3 lakh come in this category. The maximum loan amount eligible for the interest subsidy is INR 6 lakh, and the government gives an interest subsidy of up to 6.50% to borrowers. The maximum subsidy will be limited to INR 2,67,280. However, the carpet area of the house should be less than 30 sq metres. The repayment term is twenty (20) years.
  • LIG – Borrowers with an annual income above INR 3 lakh and below INR 6 lakh belong to this category. The maximum loan amount eligible for the interest subsidy is INR 6 lakh, and the government gives an interest subsidy of up to 6.50% to borrowers. The maximum subsidy will be limited to INR 2,67,280. However, the carpet area of the house should be less than 60 sq metres. The repayment term is twenty (20) years.
  • MIG-I: If your annual income is between INR 6 lakh and 12 lakh, you belong to the MIG-I category. The maximum loan amount eligible for the interest subsidy will be INR 9 lakh, and the government will give an interest subsidy of up to 4%. The maximum subsidy will be limited to INR 2,35,000. However, the carpet area of the house should be less than 90 sq metres. The repayment term is twenty (20) years.
  • MIG-II – f your annual income is between INR 12 lakh and 18 lakh, you belong to the MIG-II category. The maximum loan amount eligible for the interest subsidy will be INR 12 lakh, and the government will give an interest subsidy of up to 3%. The maximum subsidy will be limited to INR 2,30,000. However, the carpet area of the house should be less than 110 sq metres. The repayment term is twenty (20) years.

Conclusion

Availing of the benefits under the PMAY Scheme is reasonably simple and straight forward. You need to approach a PMAY-empaneled lender like PNB Housing Finance and apply for a home loan under the PMAY scheme. The lender will evaluate your financial profile and inform you about the home loan interest rate. Once you submit the application form, the lender will disburse the loan amount, and you will get the interest subsidy in your bank account.

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