The real estate sector in India is growing massively and is expected to contribute about 13% of the nation’s GDP by the year 2030. Rapid urbanisation, growth of the suburban and urban accommodations across the country has led to the enormous demand for affordable and accessible housing options. In an attempt to meet this escalated demand, multiple housing schemes have been launched by the Central Government like PMAY
Now, purchasing a house is one of the most significant financial decisions in the life of an individual. Housing loan is a long term commitment, and it can last up to two decades. Here is a list of things a borrower should know before they avail such credits.
Interest Subsidy Under PMAY Scheme
First-time home-buyers can avail interest subsidies on their home loans by applying for the Credit-Linked Subsidy Scheme (CLSS) under the (PMAY).
The key benefits of the (PMAY) scheme are mentioned below-
Individuals belonging can avail an interest subsidy of 6.5% on their home loans under the Economically Weaker Section or Low Income Group category. However, they must fulfil the following criteria to avail such benefits.
- Annual household income should be between Rs. 3 Lakh and Rs. 6 Lakh.
- The loan amount should be minimum than Rs. 6 Lakh.
Individuals can avail an interest subsidy of 4% under the Middle Income Group category if they meet the following criteria-
- The annual household should be between Rs. 6 Lakh and Rs. 12 Lakh.
- The loan amount should not exceed Rs. 9 Lakh.
Also, borrowers can claim an interest subsidy of 3% on their housing loan under Middle Income Group II. They must meet the following criteria-
- Annual household income should be between Rs. 12 Lakh and Rs. 18 Lakh.
- Loan amount should be less than Rs. 12 Lakh.
Financial institutions can offer a loan amount up to 60-70% of the mortgaged property in case of home loans. Borrowers should assess their financial capability and decide a loan amount according to that. They should avoid availing a credit amount more than they need because it will create an unnecessary financial burden on them during repayment. They can use a home loan online EMI calculator to assess the financial burden that will be on them and then determine the loan amount accordingly.
Home Loan Rates Of Interest And Other Charges
The interest rates in the case of home loans are considerably lesser than other unsecured financial products. However, borrowers should shop around to find the best home loan interest rates that they can avail.
Along with the interest rates, there are also a lot of other charges associated with such credits that a borrower should know like the processing fees, EMI bounce charges, and penalty charges.
The tenure in case of a home loan can affect the total cost of a loan significantly. A long tenure may seem feasible for such credits as it reduces the EMI amount. On the other hand, a short ensures that a borrower can pay off the debt considerably faster, and it also reduces the total cost associated with such advances.
Borrowers should avail such credits form a financial institution that offers flexible tenure to make the most of their advance.
Bajaj Finserv is one such NBFC that offers flexible loan tenure ranging from 2 to 18 – 20 years along with a wide range of other home loan offers. They provide benefits like balance transfer facility, zero part pre-payment and foreclosure charges, online loan account management and more.
They also provide pre-approved offers to such credits that make the whole process more simpler and saves time. Apart from home loans, pre-approved offers are valid on several financial products and services, including unsecured business loans and personal loans. You may also check out your pre-approved offer by providing a few necessary details.
Borrowers should take into account the points mentioned above to make the most of their home loan. Also, they must ensure that they check the required eligibility criteria before they opt for the home loan online application the procedure to reduce any chances of rejection.