Pradhan Mantri Awas Yojana — A Golden Key for Middle Income Group
Pradhan Mantri Awas Yojana (PMAY) is a housing scheme that aims at providing affordable housing for all by 2022. Through PMAY, the government aims at providing 22 million homes by the year 2022. To make this happen, the government is building affordable housing and also offers credit linked subsidies on home loans. This means that you can enjoy easier repayment of your home loan.
When PMAY was first launched in 2015, it only identified the Economically Weaker Section (EWS) and the Lower Income Group (LIG) as the beneficiaries of the CLSS scheme. However, in the year 2017, the Pradhan Mantri Awas Yojana was extended to include the Middle Income Group (MIG) households, earning an annual income between Rs.6 lakh to Rs.18 lakh.
PMAY for MIG Households
If you wish to avail a home loan under PMAY CLSS scheme for MIG households, you will have to qualify according to the income criteria. For this purpose, this category is further divided into two, namely MIG I and MIG II:
- Middle Income Group I: Annual household income between Rs.6 to Rs.12 lakh.
- Middle Income Group II: Annual household income is between Rs.12 to 18 lakh.
Subsidy Criteria for MIG under PMAY
Based on your income, you will get a subsidy as follows:
- MIG I beneficiaries get an interest subsidy of 4% on a loan amount of up to Rs.9 lakh for a tenor of 20 years. The interest subsidy limit is Rs.2.35 lakh.
- MIG II beneficiaries get an interest rate subsidy of 3% on a loan amount of up to Rs.12 lakh for a tenor of 20 years. The interest subsidy limit is Rs.2.30 lakh.
Important Points to Keep in Mind
- To calculate the annual household income, PMAY includes the incomes earned by the husband, wife and/or unmarried children.
- You can benefit from PMAY only if none of your family members own a house in any part of the country.
How does PMAY help MIG?
Availing a home loan may sound easy but repaying it is of concern. This is because home loan EMIs are usually substantial, causing a strain on your income. Additionally, since home loan tenors are long, you can be repaying the loan for around 20 years. A longer tenor means that you end up paying more as overall interest on your loan. With PMAY however, you can realise the dream of owning a house faster with the interest subsidy, which is directly credited to your home loan amount. This subsidy is applied to your home loan principal outstanding and reduces your subsequent EMIs or tenor. Thus, PMAY’s CLSS
reduces your overall cost of borrowing a home loan.
How to Apply for a Home Loan under the PMAY CLSS Scheme for MIG?
To apply for a home loan under PMAY scheme, you have to approach a lender listed under the scheme provided you meet the eligibility criteria for the scheme. You can apply for a loan by submitting the application along with the regular documents required. Additionally, you also have to draft a self-declaration, in the prescribed format, stating that you don’t own any house and submit it to your lender to avail the subsidy. Your lender will forward your application to the National Housing Bank. Once approved, your interest subsidy will be credited to your loan account upfront. Do remember that in case you switch your home loan under PMAY to another lender, you will not be eligible for this scheme again.
To purchase or construct your home more conveniently, you can choose to apply for a Home Loan under PMAY with top financial institutions like Bajaj Finserv. This way you will enjoy nominal housing loan interest rate as well as other features like simple eligibility criteria, minimal documentation, and more. Also, you get a significant loan amount of up to Rs.3.5 crore. Bajaj Finserv also offers a Flexi Hybrid facility that helps you manage your repayment efficiently. With this facility, you can choose to pay interest-only EMIs for up to 4 years. So, go ahead and check if you meet the Pradhan Mantri Awas Yojana eligibility criteria and avail a Bajaj Finserv Home Loan to save up to Rs.2.67 lakh on interest.
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