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Is Home Loan Balance Transfer Eligible for PMAY Subsidy?

By Finserv MARKETS - Apr 27,2019
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Is Home Loan Balance Transfer Eligible for PMAY Subsidy?

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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.

PMAY Scheme Details

The PMAY subsidy scheme helps to reduce the interest rate charged on the home loan. This can reduce the home loan repayment burden in the long run. The Pradhan Mantri Awas Yojana is further categorized into PMAY- Urban (PMAY-U) for the urban poor, and PMAY- Gramin (PMAY-G) for the financially deprived families residing in the rural areas of the country.

The Beneficiaries of PMAY (U) belong to the Economically Weaker Section (EWS), Low-income Groups (LIGs) (MIGs), and, Middle Income Groups,

The income eligibility, rate of interest subsidy, maximum loan eligibility and some of the other important benefits that can be availed by EWS and LIG and MIG beneficiaries are mentioned below:

Particulars EWS LIG MIG 1 MIG 2
Annual income of the family Up to Rs 3 lakhs Rs. 3 lakhs – Rs 6 lakhs Rs 6 lakhs- Rs 12 lakhs Rs 12 lakhs- Rs. 18 lakhs.
Maximum dwelling unit carpet area Carpet area up to 30 sq metres Carpet area up to 60 sq metres Carpet area up to 160 sq metres Carpet area up to 200 sq metres
Interest rate subsidy 6.50% 6.50% 4% 3%
Maximum loan eligible for subsidy Rs 6 lakhs Rs 6 lakhs RS 9 lakhs Rs. 12 lakhs
Maximum loan tenure 20 years 20 years 20 years 20 years

You can avail a home loan under the PMAY subsidy scheme with the help of leading financial institutions. However, before you apply for a home loan, make sure that you check your home loan eligibility. This will reduce the rejection chances of your home loan application.

You can opt for home loan available at Finserv MARKETS as it comes with various features such as simple eligibility criteria, flexible repayment option, easy application process, instant approval and quick disbursal of the loan amount.

Eligibility of PMAY

Not everyone is eligible for PMAY. Only the sections mentioned below will be eligible for this scheme according to the home loan eligibility criteria:

  • 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. Check home loan eligibility using our home loan eligibility calculator.

Also check latest PMAY List at Finserv MARKETS

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. Download the Home Loan App 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!

Read more on Pradhan Mantri Aawas Yojana (PMAY) and Pradhan Mantri Jan Aarogya Yojana (PMJAY) only at Finserv MARKETS.

Read more about Government Housing Schemes

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