How to Avail Home Loan Under PM Awas Yojana

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The Pradhan Mantri Awas Yojana (PMAY) has been introduced by the government of India to target providing houses for all by March 2022. The credit linked subsidy scheme is a significant vertical of PMAY. The credit linked subsidy scheme entails financial assistance including interest subsidy for home loans to all eligible individuals through multiple financial organizations in India. With the help of this program, the government has aimed to promote the increase of credit flow in financial institutes through housing requirements. People willing to avail a home loan from lending organizations can enjoy concession on their interest rates as well under this scheme. 

Eligibility for availing home loan under PM Awas Yojana

 

The interest subsidy for home loans under PMAY is available for three income groups, namely, the economically weaker section (EWS), lower-income groups (LIG) and for the medium income groups (MIG). Individuals falling under EWS must have an annual family income of 3 lakh rupees. They will get a home loan amount with a subsidy of up to 6 lakh rupees, and the rate of interest will be 6%.

Under the LIG group, the annual income must be at least rupees 3 lakhs to 6 lakhs. They, too, are eligible to get a subsidy of up to 6 lakh rupees with an interest rate of 6%.

For the MIG, the annual family income must be 6 lakhs to 12 lakhs. Their home loan amount on which the PMAY subsidy will be calculated will be up to 9 lakhs rupees with an interest rate of 4%.  

 

There are, however, a few other eligibility criteria. They are:

  • Under the EWS and the LIG groups, a female member of the family must also have a share of ownership of the property. 
  • No member of the family must own a pucca house anywhere in the country. 
  • The family applying for a home loan must not have taken any other kind of housing loan before. 

 

Benefits of availing the home loan under PM Awas Yojana

There are several benefits of having the Pradhan Mantri Awas Yojana. They are:

  • The borrowers can receive their subsidized amount from the government right in their loan account. This will bring down the outstanding principal amount and thus, lowering their EMIs. 
  • As the EMIs become more manageable, it will be easier for them to pay the housing loan. 
  • As an alternative, if the borrower decides to pay the actual EMI then the loan tenor will get reduced. The borrower may select the right option accordingly.
  • Applicants claiming the interest subsidy will also have the option of availing tax benefits. According to the IT Act 1961, they can claim the tax exemptions of nearly 2 lakh rupees and also up to 15 lakhs rupees on their principal repayment all in one fiscal. 

With all these said benefits, it will be very wise for people to avail of the home loans under the PMAY. Even if they are unaware of it, others should take the initiative to enlighten them about this scheme. It will not only benefit the lower-income families but will affect the country’s overall well being.

PMAY is helping the economically weaker sections of the country have a roof above their heads. The initiative has been a successful step to ensure the proper socio-economic development of the country.