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How to Apply For Interest Rate Subsidy on Home Loan

How to Apply For Interest Rate Subsidy on Home LoanHip!Hip! hurry! There are a good new low middle class and a middle class section of the society who dream to have a home at affordable cost. The government of India is now offering interest subsidy on the home loans. Both the people who live in the urban and rural areas are eligible for this interest rate subsidy on housing loan. This scheme is also termed as credit linked interest subsidy scheme for middle-income groups.  Keep reading the article to know your eligibility to the schemes its features and much more.

Get Interest Rate Subsidy on Home Loan With Pradhan Manthri Avas Yojana

 Eligibility  

You will stand eligible to gain the benefit from this scheme if your annual income is between 6 lakhs to 18 lakhs and you are buying your first home. The benefits of the scheme are shared to the people depending on your income levels. If you are earnings are 6 lakhs p.a, you are eligible to interest subsidy of 4% on the loan up to 9 lakhs.  For the people with annual income of 18 lakhs will earn subsidy of 3% on the housing loan up to 12 lakhs.  This scheme will be implemented for the period of one year. The housing loan tenure beyond this year is liable to pay the normal rate of interest for the rest of the period.

Features of the loan

  • If you stand eligible for this scheme, you can approach your lending service provider apply for availing the benefit.
  • The loans sanctioned after January 1st 2017 fall under this scheme. You will gain the benefit of the subsidy only if it is your first home.
  • The total benefit gained by the beneficiaries will be paid at one thus reducing monthly equated instalments.
  • Interest will be reimbursed to the bank by National Housing Bank (NHB) and Housing and Urban Development Corporation (HUDCO)  so, no additional cost will be charged to the borrower for offering the benefit to the borrower.
  • You can get the home loan benefit for the construction of the house if the area is 90 square mts for those with the income of 12 lakhs and 120 sqmts for those earning between 12 to 18 lakhs.
  • The tenure of the subsidy is spread over 20 years or the preferred tenure chosen by the beneficiary whichever is lower.
  • Beneficiary using the scheme will benefit around 2,30,000 as interest subsidy on a home loan.

How to apply?

All the lending institutions including commercial lending institutions housing finance companies, urban cooperative banks, other financial institutions like small finance banks, non-banking finance companies and microfinance institutions can lend under this scheme. When you approach the lender, speak to them that you wanted to avail this benefit and rest of the process will be carried on.

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