PUNE, India, Oct. 16, 2019 /PRNewswire/ -- Bajaj Housing Finance Limited (BHFL) has made affordable housing a reality by offering credit linked subsidy scheme (CLSS) known as Pradhan Mantri Awas Yojana (Urban) or (PMAY-U) to the tune of Rs. 50 crore. Till date, a whopping greater than 4,000 applications for the Credit Linked Subsidy Scheme (CLSS) have been processed.
The interest subsidy comes as a boon to first-time homebuyers, helping them reduce their loan EMIs and thereby, own a flat or a home without exceeding their budget. The company's offerings are in line with the Government of India's vision of providing affordable housing to every citizen by 2022.
How much subsidy can a customer claim?
The extent of subsidy that a beneficiary family is allowed to claim depends on the household income and other conditions levied by government. Households with annual income of up to Rs.3,00,000 are considered to be a part of the Economically Weaker Section (EWS) and those with incomes between Rs.3,00,001 and Rs.6,00,000 are part of the Lower Income Group (LIG). Both categories enjoy interest subsidies of up to Rs.2,67,280, at the rate of 6.50%, on a maximum loan amount of Rs.6,00,000.
Families with incomes between Rs.6,00,001 and Rs.12,00,000 qualify under the Middle-Income Group 1 (MIG I) and those with incomes between Rs.12,00,001 and Rs.18,00,000 are part of the Middle-Income Group 2 (MIG 2) category. MIG 1 beneficiaries get up to Rs.2,35,068 and MIG 2 can obtain up to Rs.2,30,156 as subsidy. The interest subsidy rates are 4% and 3%, calculated on maximum loan amounts of Rs.9,00,000 and 12,00,000, respectively.
Household income (rupees per annum)
Eligible housing loan amount for interest subsidy (in rupees)
Up to 6,00,000
Up to 6,00,000
Up to 9,00,000
Up to 12,00,000
Interest subsidy (% per annum)
Maximum loan tenor (in years)
Maximum carpet area of the dwelling unit
30 sq. m.
60 sq. m.
160 sq. m.
200 sq. m.
Discount rate for net present value (NPV) calculation of interest subsidy (%)
Maximum interest subsidy amount (in rupees)
Applicability of no pucca house
Not for renovation/upgradation
Ownership/co-ownership of a woman
Mandatory for new acquisition, Not mandatory for existing property
How PMAY CLSS makes home loan EMIs smaller
Since CLSS reduces interest repayments, PMAY beneficiaries pay lower EMIs as compared to regular home loan borrowers. For instance, an MIG II beneficiary taking a loan of Rs.18 lakh at a 10% interest will pay EMIs of Rs.17,370 over 20 years towards a regular home loan. When availing a home loan under PMAY, such a beneficiary can claim a subsidy of up to Rs.2.30 lakh and reduce EMIs to Rs.15,149 for the entire tenor.
Who can qualify for PMAY benefits?
To benefit from PMAY-U via Bajaj Housing Finance Limited (BHFL), the applicant must belong to beneficiary family. The government defines this as follows:
- A family that doesn't own a pucca house in any part of the country
- A family that has an eligible annual household income
- A family that hasn't participated in a housing scheme from the centre in the past
- A family that abides by the carpet area guidelines when choosing a house for purchase
Once an applicant qualifies as a beneficiary, he/she can avail a Home Loan with PMAY subsidy from Bajaj Housing Finance Limited and benefit like nil part-prepayment and foreclosure charges, a flexible tenor of up to 20 years, minimal documentation and instant approval, as well as a range of other features that add value to the borrowing experience.
About Bajaj Housing Finance Limited
Bajaj Housing Finance Limited (BHFL) is a 100% subsidiary of Bajaj Finance Limited - one of the most diversified NBFCs in the country with 19 product lines across consumer, commercial and SME finance catering to more than 38 million customers across the country. Headquartered in Pune, Bajaj Housing Finance Limited offers finance to individuals as well as corporate entities for purchase, construction and renovation of homes or commercial spaces. It also provides loan against property for business or personal needs as well as offers working capital for business expansion purposes. It also offers finance to builders and developers engaged in construction of homes. The company enjoys highest long-term credit rating of AAA (Stable) by CRISIL and IND AAA (Stable) by India Ratings and highest short-term credit rating of CRISIL A1+ by CRISIL and IND A1+ by India Ratings.
To know more: https://www.bajajhousingfinance.in/