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Friday, May 15, 2020

CLSS Scheme for Mig Homebuyers Extended


If you belong to the middle-income group (MIG) looking to avail interest rate subsidy on home loans through the credit-linked subsidy scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY), there’s a reason for cheer. Considering the success of the scheme, the government has extended its period till 31st March 2021. Read on to know more about the development and various aspects of CLSS.

What is CLSS Subsidy Scheme?

CLSS is a component of PMAY, where eligible beneficiaries get home loan subsidy availed from prime lending institutions (PLIs). This subsidy is offered to various groups based on their annual income. The Middle-Income Group (MIG) is one of them, with the Economically Weaker Section (EWS) and Low-Income Group (LIG) being the other two.
The MIG is further divided into two sub-groups – MIG I and MIG II. If your annual income ranges between Rs. 6-12 lakh, you fall under MIG I. On the other hand, if your annual income is between Rs. 12-18 lakh, you belong to MIG II.
CLSS benefits for homebuyers belonging to MIG-
With the extension of CLSS, if you belong to either of the MIG categories, you can avail the benefits of subsidized loans. The table given below outlines the interest subsidy you can avail, along with other essentials, under CLSS:
Particulars: MIG I Household income (per annum)- Rs.  6-12 lakh eligible loan amount for interest subsidy-Rs.  9 lakh interest subsidy-4%Max loan tenor-20 years dwelling carpet area- 160 sq MIG II Household income (per annum)- Rs.  12-18 lakh eligible loan amount for interest subsidy-Rs. 12 lakh interest subsidy-3%Max loan tenor-20 years dwelling carpet area- 200 sq mt is estimated that if you belong to MIG I, you can save up to Rs. 2.35 lakh on interest paid towards your home loan with the subsidy on offer through CLSS. On the other hand, if you belong to MIG II, the interest saved is up to Rs. 2.30 lakh.
Decision to extend benefits under CLSS
Note that initially CLSS benefits for the MIG were allowed only 12 months, till December 30, 2017. This was later extended to 31st March 2020. However, after reviewing the success of the scheme and considering its positive performance, the Government decided to extend its validity by another year.
Benefits of the extension
The benefits of the extension are multi-fold. Note that MIG forms a significant chunk of the population looking for affordable housing. The CLSS scheme benefits would allow more people from this group to avail of home loans and get interest subsidy, thereby making significant savings. This, in turn, would boost the demand for affordable housing in the country. This has been the focus of the current government and one of the major objectives of PMAY.
Also, interest saved on home loans can be invested in various avenues to compound wealth in the long run.

How to avail the benefits of CLSS under PMAY?

PMAY eligibility is easy to meet. To avail of the benefits of CLSS under PMAY, you need to apply for home loans with any PLI. After the disbursal of the loan amount, the lender will claim a subsidy from the central nodal agencies on your behalf. Once the lender receives the subsidy amount, the same is credited into your account and the EMIs start decreasing.
It’s essential to note that since PMAY is targeted to provide housing for all if you already own a home, you aren’t eligible to avail benefits of the scheme. However, you can avail the benefits of CLSS under PMAY if you want to buy a new house from the builder or buy it from the secondary market, through resale.
Bajaj Finserv offers home loans under PMAY with flexible repayment tenor at a competitive interest rate. Minimal documentation coupled with easy home loan eligibility criteria makes it seamless to access finance. You also get customized insurance schemes that protect your family from the burden of repaying the loan in case of a mishap. Also, there are no charges on pre-payment or foreclosure of the loan, which makes it pretty affordable.

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