Complete guide on PMAY Pradhan Mantri Awas Yojana - Loan Trivia


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Tuesday 31 August 2021

Complete guide on PMAY Pradhan Mantri Awas Yojana

The Pradhan Mantri Awas Yojana is a housing scheme in India, launched in 2015 with the goal of providing Rs.2 crore affordable housing units by March 31, 2022. As the deadline for achieving the goal of "Housing for Everyone" approaches, demand for affordable housing has risen to 1.12 in 2020. Low-cost rental accommodation for migratory workers was also introduced in the Union Budget 2021, albeit its implementation is yet to be observed. 

There are various features of this scheme, some of which are stated below:

  • The repayment tenure for this loan is between 3 to 7 years.
  • The scheme provides an average loan of Rs. 5 lakh.
  • Under the scheme, collateral-free loans are available for up to Rs. 1 lakh.
  • The scheme considers all the fields of businesses as viable options.
  • The scheme provides subsidies on interest rates up to Rs. 15,000.

The PMAY is designed to help the beneficiaries, which are classified into the following 4 categories:

  • Economically Weaker Sections (EWS)
  • Lower Income Group (LIG)
  • Middle Income Group 1 (MIG 1)
  • Middle Income Group 2 (MIG 2)

PMAY Eligibility criteria to be met

  • PMAY beneficiaries have to meet the following eligibility criteria if they want to avail the benefits of the scheme:
  • The potential recipient or any member of his or her family may not own a pucca house anywhere in India.
  • The family in question should not have previously received benefits from any other government-sponsored program.
  • Married couples can apply for joint ownership or a single subsidy, which is applicable for one subsidy only.
  • These advantages are not available for residences that have already been constructed.

Credit linked Subsidy scheme (CLSS) 

The CLSS scheme is one of the Pradhan Mantri Awas Yojana's components, and it provides recipients with a 6.5 per cent home loan interest discount. This scheme is only available to citizens who meet the PMAY eligibility criteria and fall into one of the benefit groups. Beneficiaries in the MIG-I and MIG-II groups are eligible for a 3% and 4% interest rate discount on a maximum home loan value of Rs.9 lakh and Rs.12 lakh, respectively. However, the loan repayment term for both stays the same, i.e., a maximum of 20 years. Members of the EWS and LIG groups are eligible for a 6.5 per cent house loan interest rate subsidy on loans up to Rs.6 lakh for 20 years or the entire tenor of the loan, whichever is shorter. Therefore, the most important things to consider about the PMAY subsidy scheme are the annual income of the borrower, eligibility of PMAY to be met by him, comparison with various housing schemes in India, and the benefits that the subsidy will provide him. 

How long will it take to get a PMAY Subsidy?

After the Government has completed its verification, it may take 3-4 months to get the subsidy amount. Home purchasers investing their hard-earned cash and salaries on buying a house and repaying their home loans might benefit from the PMAY subsidy. Buyers can make partial loan repayments once the subsidy amount is credited to their loan account, decreasing the outstanding loan amount even more.

An individual can easily apply for a PMRY loan by correctly filling out the application form and submitting it to the financial institution that administers the loan. These financial institutions include not just banks but also lending companies that the government has licensed. So a borrower should make an informed choice and choose from the Indian companies offering PMAY loans in India. 

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