With the introduction of PMAY, buying a home has become affordable for many. The credit-linked subsidy scheme has encouraged people from lower-income groups to apply for a home loan. Read on to know more about how you can buy a home with PMAY.
Buying a home is a significant milestone and a dream come true for many. When you buy a home, not only do you secure your future but also you secure your loved ones’ future. Being a homeowner can give you a great sense of joy, pride and happiness. But, often these dreams are hindered by the financial problems. Investing in a house requires a lot of planning and money. And to make their dreams come true, most people apply for a home loan.
Sometimes, due to lack of efficient planning or borrowing more than they can afford, people face problems with the loan repayment, and it creates financial instability. But, today, with the introduction of the ambitious PMAY (Pradhan Mantri Awas Yojana) scheme by the government of India, buying a home has become easy for all. The scheme, which aims to provide a pucca home for all by March 2020 is specifically designed to offer affordable housing loan to people from lower and middle-income groups and the economically weaker sections.
Anyone who does not own a pucca house in any part of India can apply for a home loan under the Pradhan Mantri Awas Yojana and buy their dream home.
Here are a few critical things you must know about PMAY
The maximum duration of the loan under Pradhan Mantri Awas Yojana is 30 years. However,
the subsidy is available only for 20 years.
There is no maximum limit on the loan amount you can avail under the Pradhan Mantri Awas Yojana, but the subsidy is limited to a certain amount based on the income category you belong. If you belong to the EWS or LIG category, you can get an interest subsidy of 6.5% on loan up to six lakhs. If you belong to MIG I or MIG II category, you can get an interest subsidy of 4% and 3% on loan up to 9 lakhs and 12 lakhs respectively.
Most lenders that offer home loan under PMAY provide two options for repayment.
- You can repay by providing post-dated cheques drawn in favour of the lender on your savings bank account or salary account
- You can also opt for electronic clearing service and give your bank a standing instruction to auto-debit the amount on the due date
Another significant benefit of PMAY, apart from the interest subsidy is that you can enjoy tax exemption on both the principal and interest component of the loan. As per the Income Tax Act, you can avail a maximum deduction of two lakh Rupees on the interest component under Section 24(b) and the maximum deduction on the principal amount under Section 80C is 1.5 lakh Rupees.
If you are applying for a home loan under PMAY, you can apply individually, or you can apply for a joint loan with an earning member of the family as a co-applicant.
Thus, with benefits like easy repayment option, subsidised interest rate, tax benefits, and loan for a long tenure, you can easily afford to buy your dream home and repay the loan without any hassles. Before you apply for a loan under PMAY, you should compare lenders in terms of interest rate, services offered, loan-related charges, approval time, and choose the best lender that best suits your needs.