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About Credit Linked Subsidy Scheme (CLSS)

In 2015, the Government of India launched a scheme known as the Pradhan Mantri Awas Yojana. The aim of the individuals who are at the helm of this housing scheme is to help the financially underprivileged sections of the Indian populace get affordable housing in urban areas. As a part of the scheme, the relevant officials intend on providing prospective borrowers the financial means that will be necessary for the purpose of purchasing a home through a home loan that will be made available to them on subsidised interest rates.

 

One of the components of the same is the Credit Linked Subsidy Scheme (CLSS), under which the economically weaker sections and middle-income groups of India can avail home loans at heavily subsidised EMI amounts. Let us now take a deep dive into the concept of the CLSS itself.

What is PMAY CLSS?

The Pradhan Mantri Awas Yojana Credit Linked Subsidy Scheme (Or the PMAY CLSS scheme) is a scheme that was introduced by the Central Government. Under this particular housing loan subsidy program, one can avail an Interest subsidy on the first home loan that an Indian citizen will take for the purpose of construction, purchase, renovation or extension of the house. It essentially is credited upfront and can be as high as up to 6.5%, which is deducted from the loan amount for a tenor of 20 years at the most.

CLSS for Economically Weaker Section (EWS) and Low Income Groups (LIG)

Category

Lower Income Group

Economically Weaker Section

Annual household income

Between Rs. 3 Lakhs – Rs. 6 Lakhs

Rs. 3 Lakhs

Carpet area of the dwelling unit

60 Sq. Mtr.

30 Sq. Mtr.

Rate of interest subsidy

6.50%

6.50%

Maximum loan amount

Rs. 6 Lakhs

Rs. 6 Lakhs

Maximum loan tenure

20 years

20 years

 

CLSS for Middle Income Group (MIG-1) & (MIG-2)

Category

Middle Income Group- 1

Middle Income Group-2

Annual household income

Between Rs. 6 Lakhs – Rs. 12 Lakhs

Between Rs. 12 Lakhs – Rs. 18 Lakhs

Carpet area of the dwelling unit

160 Sq. Mtr.

200 Sq. Mtr.

Rate of interest subsidy

4%

3%

Maximum loan amount

Rs. 9 Lakhs

Rs. 12 Lakhs

Maximum loan tenure

20 years

20 years

 

Who is Eligible for CLSS?

In order to avail the benefits of the government-run Credit Linked Subsidy Scheme, one must make sure that they satisfy the eligibility criteria that has been laid out by the concerned officials. They are as follows:

  • One can avail a home loan subsidy only if they are borrowing a housing loan in their name for the first time ever.

  • If the applicant has availed the benefits of any of the Government-run housing scheme in the past, they are not eligible for a PMAY home loan subsidy

  • The Housing Loan can be availed by any Indian citizen, including women.

  • In the case of married couples, either the spouse or both the people will only get a single subsidy, even if the home is owned jointly.

  • The subsidy which can be availed differs from individual to individual as it is based on their income level.

How CLSS Interest Subsidy is Calculated?

The Interest Subsidy which is provided under the CLSS scheme is credited upfront to the loan amount, which is then deducted from the amount for the purpose of calculating the EMI.

Let us take a look at this particular example in order to understand it better: Imagine that you have availed a home loan amount of ₹12 Lakh that attracts 9% per annum rate of Interest. This makes the home loan EMI to ₹ 10,796. If you are eligible for a ₹2.30 Lakh at the most, the loan amount after accounting for the same will be ₹12 Lakh-₹2.30 Lakh, which is ₹ 9,70,000. The figure that you have arrived on will be considered to be your outstanding principal loan amount and the same will have to be repaid with 9% interest rate during the course of the loan repayment tenor.

Application process and processing fee for CLSS

  • The eligible beneficiaries underCredit Linked Subsidy Scheme LIG/EWS/MIG can directly apply for a housing loan with the lending institutions.

  • Post the verification of the application, the lending institutions will sanction the home loan and afterward claim the subsidy from Central Nodal Agencies (CNAs).

  • This subsidy amount will be credited to the beneficiaries account by the lending institution. This will lower the total loan amount.

  • The beneficiaries can continue paying the EMIs towards the balance loan amount.

  • Another major advantage is that there will be no processing fee charged by PLIs for the applicants applying under CLSS.

Key Points of the PMAY CLSS Scheme

One must always be cognizant of some of the key characteristics of the PMAY scheme before even considering applying for the same. They are as follows:

  1. It was introduced by the Government in 2015 so that they can provide Pucca houses to 20 million households by the end of the financial year 2022 at affordable rates.

  2. Under the scheme, one can avail a home loan subsidy of up to 6.5% per annum.

  3. In order to avail the CLSS subsidy, the applicant must be a first-time borrower of a home loan.

  4. Under the scheme, there is zero cap on the maximum loan amount that one can apply for.

  5. If the loan amount that one applies for is beyond the limits that have been specified, the interest rate for an additional loan amount will be calculated at regular home loan rates.

Credit Linked Subsidy Scheme Helpline Number

One can always get in touch with the CLSS toll-free helpline numbers if they have any queries, concerns or apprehensions with regards to the CLSS component. The contact numbers for the same are as follows.

  1. Housing and Development Corporation (HUDCO) (1800-11-6163).

  2. National Housing Bank (NHB) (1800-113-377,1800-113-388).

Credit Linked Subsidy Scheme FAQs

✔️How is the PMAY CLSS subsidy credited?

The PMAY CLSS Interest subsidy will be credited upfront by default to the loan account of the beneficiaries via the Primary Indian Lending Institutions. This would result in a reduced effective housing loan, thereby reducing the Equated Monthly Instalment (EMI) amount.

✔️How much time does it take to get a PMAY CLSS subsidy?

The process of applying for the same in its entirety, from application to the amount that is being credited into the home loan account takes somewhere between 3 to 6 months or up to a year at the most. Post the same, the government will directly credit the subsidy amount only after the documents provided by the borrower have been verified successfully.

✔️How to check the PMAY CLSS subsidy status?

One can do the same by simply following the steps mentioned below:

  1. Visit the official website of the PMAY scheme (pmayuclap.gov.in.)

  2. Once you land onto the home page, all you will need to do is enter the application ID and then simply click on 'Get Status'

✔️What is the maximum subsidy under PMAY CLSS?

A beneficiary of the PMAY CLSS subsidy scheme can avail an interest subsidy of up to 6.5% per annum at the most on a home loan which is to be repaid over a period of 20 years.

✔️Is there a limitation on the loan amount that one can take as a PMAY CLSS beneficiary?

There is no loan limit for a PMAY CLSS beneficiary. However, the beneficiary can avail a subsidy of up to ₹6 Lakh only.

✔️Are the Interest Rates on Pradhan Mantri Awas Yojana - CLSS floating or fixed?

The loans that are available under the PMAY CLSS subsidy scheme attract interest rates which are fixed in nature.

✔️How to avail the CLSS subsidy?

For the same, one must fill in the PMAY Home Loan Credit Linked Subsidy Application form which can be availed from their website (https://pmayuclap.gov.in/) and submit it with the necessary documents to the lender. After verification, the housing loan amount will be disbursed to your bank account.

✔️How to get subsidy on the Credit Linked Subsidy Scheme?

In order to avail the CLSS Subsidy, one must ensure that the fulfil the following eligibility criteria:

  1. The applicant must be a first-time home loan borrower. 

  2. The annual income of the applicants is ₹ 18 Lakh at the most. 

  3. The applicant must have not previously availed any home loan benefit from the Central or State Government