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7 Things New Home Buyers Should Know About CLSS Under PMAY?

By Finserv MARKETS - Aug 12,2019
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Due to the rising cost of real estate, buying a home has become an expensive affair. Therefore, a large number of people who aren’t able to purchase a home, are forced to live in rented apartments. To tackle this issue, the Government of India launched the Pradhan Mantri Awas Yojana (PMAY) Scheme in the year 2015. The primary objective of the PMAY scheme is to provide affordable houses to approximately 20 million individuals by 2020. Moreover, to make housing even more affordable, the Government of India has rolled out Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY).

Below are 7 important things that every new home buyer should know about PMAY Credit Linked Subsidy Scheme (CLSS)

1. You can avail a home loan under CLSS if you satisfy the following criteria:

  • You don’t have a house registered in your name, your spouse’s name or in the name of any unmarried children in India.
  • If you’re married, either you or your spouse or both together (in joint ownership) are eligible for a single subsidy.
  • Your family hasn’t availed central assistance under any housing scheme from the Government.

2. A beneficiary family under the CLSS includes a husband, wife and unmarried children. However, an adult earning member, irrespective of his/her marital status, can also be considered as a separate beneficiary.

3. The Credit Linked Subsidy Scheme (CLSS) covers people in the following income groups:

  • Economically Weaker Sections (EWS) with an annual income not exceeding Rs. 3 Lakh
  • Low-Income Groups (LIG) with an annual income not exceeding Rs. 6 Lakh
  • Mid-Income Groups (MIG) with an annual income between Rs. 6 Lakh to Rs.18 Lakh

4. The interest rates on home loans under Credit Linked Capital Subsidy Scheme are also subsidized depending upon the income group.

  • For EWS/LIG category, home loan interest rates are subsidized by 6.5% for a tenor of 20 years.
  • For MIG 1 category, the home loan interest rate is subsidized by 4% on a maximum loan amount of Rs.9 lakh for a loan tenure of 20 years.
  • For MIG 2 category, the home loan interest rate is subsidized by 3% on a maximum principal amount of Rs.12 lakh for a tenor of 20 years. It is to be noted that for MIG 1 & 2, the loan should have been approved on or after 1-1-2017.

5. All statutory towns in India can avail the benefits of Credit Linked Subsidy. Therefore, irrespective of where you reside in India, you’ll likely to be eligible to avail the benefits of CLSS.

6. There’s no cap for the maximum loan amount that you can avail. However, if you avail a higher loan amount, you’ll have to bear non-subsidized interest rate on the loan amount beyond specified limits.

7. You can avail a loan under CLSS for new constructions, acquisition or expansion of an existing house.

While availing a housing loan under CLSS, make sure that you compare various financial institutions before making the final decision. This will help you avail a home loan that best suits your needs.

Opting for Bajaj Finserv Home Loan can be beneficial as it comes with various features such as flexible repayment option, easy application process, instant approval and quick disbursal of the loan amount.

Also know about the PMAY Subsidy, PMAY list and PMAY eligibility calculator

How is interest subsidy calculated under clss?

To understand how the subsidy is calculated let’s assume that you fall under The Middle Income Group (MIG) group and you availed a home loan of Rs.32 lakh for a tenor of 20 years. The EMI works out to be Rs.30,881. Out of this total amount, the loan amount eligible for subsidy is Rs.12 lakh. Adding the 3% interest rate subsidy and calculating the EMI via the PMT formula on Excel, you will find that the EMI goes down to a little more than Rs.6,600 per month. You can take the help of the Home Loan EMI Calculator to find out how much EMI you will have to pay regardless of this scheme. This lender allows you to conveniently get a Home Loan sanction of up to Rs.10 crore for a tenor of 25 years on nominal interest. Not only can you avail PMAY facilities as applicable on your loan sanction but you also get additional loan benefits on CLSS under pmay.

How to avail a clss subsidy scheme?

To avail the Pradhan Mantri Awas Yojana Credit Linked Subsidy Scheme you first need to contact the financial institutions covered under the PMAY scheme about your intention to avail a loan. They will then hand you the CLSS loan subsidy application, which you have to duly fill and submit along with the required documents. After clearing the verification process the housing loan amount will be disbursed to your bank account. Once this is done, your lender approaches the nodal agencies to get started with the process of injecting your bank account with the subsidy you are entitled to pmay credit-linked subsidy scheme has been brought to action to make it easier for you to purchase a home on easy and flexible loan terms.

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Read more on everything about Pradhan Mantri Aawas Yojana. You can also check your home loan eligibility with the help of home loan eligibility calculator and home loan emi with the help of home loan emi calculator.

Read more about Government Housing Schemes

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