An initiative taken by the Ministry of Housing and Urban Affair, the Pradhan Mantri Awas Yojana (PMAY) was initiated with an aim to provide affordable housing to all the people across the country. It aims to create affordable housing options for Indians by 2022.
Is Home Loan Balance Transfer Eligibile for PMAY Subsidy?
- Salient Features of PMAY
- Eligibility for PMAY
- What is Home Loan Balance Transfer?
Salient features of PMAY
It is important to understand some features of the PMAY subsidy. This scheme allows an interest subsidy of 6.5% for a period of 20 years or during the tenure of the loan; whichever is lower. A subsidized interest rate is offered for a loan amount less than INR 6 lakh. It is only offered to eligible individuals. If the loan amount is higher than INR 6 lakh, there will be a non-subsidized interest rate on the additional amount. For women, there is an interest rate of 5.5% on the loan amount up to INR 6 lakh and a non-subsidized interest rate for the additional amount.
Eligibility of PMAY
Not everyone is eligible for PMAY. Only the sections mentioned below will be eligible for this scheme.
- Low Income Group (LIG) families with an annual income between INR 3 lakh and INR 6 lakh
- Households belonging to the Economically Weaker Section (EWS) with an annual income up to INR 3 lakh
- Scheduled tribes and scheduled caste
- Other backward classes
- Women belonging to LIG, EWS, or any other minority groups
- Families from the Middle Income Group (MIG) category with an annual income up to INR 12 lakh can avail of 4% interest subsidy on a loan amount of INR 9 lakh
- MIG families with an annual income up to INR 18 lakh can avail of 3% interest subsidy on an INR 12 lakh loan
The applicant will be required to prove their eligibility for the loan and will have to furnish proof belonging to one of the categories mentioned above.
Other factors at play
You must be aware that under the new norms developed by the government, individuals having an annual income ranging between Rs. 6 Lakhs to Rs. 12 Lakhs would qualify for subsidy interest. This will be based on scheme of MIG-1 while under scheme MIG-2 individuals with an annual income of Rs. 12 Lakh to Rs. 18 Lakh will be eligible. The interest subsidy for MIG-1 and MIG-2 will remain fixed at 4% and 3% respectively. An increase in the loan amount will not affect this condition. The tenure for repayment of such loans will remain within twenty years of borrowing.
Home loan balance transfer
A home loan balance transfer is a tool, which is helpful if you want a low rate of interest on your loan amount. With this option, you can transfer the entire outstanding loan amount balance from one financial lender to another and enjoy a low-interest rate. You should ideally approach your current lender for a low-interest rate before you move to another lender. The existing lender might offer you a better interest rate option. Now a question that arises here is that is home loan balance transfer eligible for PMAY subsidy. Since PMAY already offers a low-interest rate, many borrowers opt for a home loan balance transfer to enjoy a rate, which is lower than the current rate.
In the given situation, any loan availed after June 17, 2015, will be eligible for a home loan balance transfer but one should not be too hopeful about it. The funds, which are delegated for PMAY, have been exhausted and the lenders are giving priority to new cases over home loan balance transfer cases.
Thus, if you are not eligible for PMAY, you might want to consider a home loan balance transfer option to reduce the burden of a high Equated Monthly Installment (EMI) and enjoy a low-interest rate. Consider the available options and make a well-informed decision.
If you are looking to lower the cost of your home loan, then you are definitely at the right place. You can now easily avail a Bajaj Finserv Home Loan Balance Transfer facility on Finserv MARKETS and take advantage of a plethora of benefits like fast application processing, quick dispersal and many more! So why wait? Apply for a Home Loan Balance Transfer with us, today!
Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment, and exclusive EMI store, all under one roof- anytime, anywhere!