Housing Loans Interest Rate Subsidy

Credit Linked Subsidy Scheme (CLSS) is aimed at providing financial benefits to the middle-income and lower-income group. Under the scheme, home loans of up to Rs 9 Lakhs are eligible for a 4% subsidy for those whose annual income is up to Rs 12 Lakh. Housing loans up to Rs 12 Lakhs are eligible for a 3% interest subsidy provided that the borrower’s income is up to Rs 18 Lakhs per annum. The scheme has been made effective from 1^st January 2017, although the guidelines came out later. Home loans sanctioned since Jan 1 will be eligible for the subsidy. However, the applicant earlier should not have a house registered in his name since the scheme is only for first-time homebuyers.

Highlights of Credit Linked Subsidy Scheme

CLSS, sponsored under Pradhan Mantri Awas Yojna (Urban), has come out as a big relief for the mid-segment homebuyers. At the same time, it encourages private builders to launch affordable housing projects in prime locations. Let us look at the key highlights of CLSS-

1. The CLSS is meant for the first-time home buyers, so those who already have a house registered in their name would not be able to get benefits of this scheme.

2. Though the operative guidelines were announced only in March 2017, loans that were sanctioned and are in process since 1^st January 2017 will also be considered.

3. To get benefits under CLSS, beneficiaries will have to apply for the same with their lenders.

4. All commercial banks, regional rural banks, housing finance companies, urban and rural cooperative banks and other financial institutions giving out housing loan are eligible to provide benefit to their customers under the scheme.

5. The amount of interest subsidy provided will be reimbursed to the lender bank from the National Housing Bank (NHB) and the Housing and Urban Development Corporation (HUDCO).

Process of Credit Linked Subsidy Scheme

To understand the process of how to get benefit under Credit Linked Subsidy Scheme, one has to know the following points first-

·      Interest subsidy is provided for the purchase/construction of the house with carpet area of up to 90 square meters for beneficiaries earning up to Rs 12 Lakhs per annum. For those earning between Rs 12 Lakhs and Rs 18 Lakhs, this limit is 110 square meters.

·        The tenure for this loan is taken as 20 years or that preferred by the beneficiary, whichever is lower.

If the beneficiary meets the income and loan eligibility criteria, he/she should apply for the interest subsidy under CLSS with the lender. The lending bank or financial institution will verify the details and if satisfied, it will grant the subsidy. The entire amount of interest subsidy is transferred to the beneficiary’s account in one go and the same amount is reimbursed to the bank from the National Housing Bank or HUDCO.

Extent of EMI Reduction under Credit Linked Subsidy Scheme

To be precise, CLSS reduces the beneficiaries’ EMIs by Rs 2,000 per month.

According to the MD and CEO of National Housing Bank (NHB), an interest subsidy of 4% on a loan of Rs 9 Lakhs will bring down the monthly EMI by Rs 2,062. Similarly, interest subsidy of 3% on a loan of Rs 12 Lakhs will reduce the EMI by Rs 2,019 per month. This calculation has been done with an average interest rate of 8.65%.

About Pradhan Mantri Awas Yojna (PMAY)

Pradhan Mantri Awas Yojna is a scheme catering to the housing needs of mid-income, low-income and economically weaker sections of India. PMAY consists of four important aspects- building homes for slum dwellers, providing financial assistance to homebuyers in the form of credit linked subsidy, providing financial assistance to private developers who wish to develop affordable housing projects and extending direct financial assistance to the EWS.

Credit Linked Subsidy Scheme is a major step towards encouraging people to buy their dream homes and giving an overall boost to the real estate sector.

Axis Bank Home Loan for Low-Income Individuals

To have one’s own house is a dream shared by all- whether a businessman or a salaried professional, a shopkeeper or a teacher. While it is easier for some to buy that home through home loan, for others this dream is still a distant one. Lack of proper documents like income proof or ITR makes it hard for home-seekers to fund their purchases through loan, even if they are financially sound to pay monthly EMIs. Axis Bank has been the perfect home buying companion of many homebuyers for a long time. To help the individuals belonging to the low income group buy their dream homes, a new Axis Bank Home Loan has been launched under the name Asha Home Loan.

Axis Bank Asha Home Loan

This Axis Bank Home Loan product is targeted at individuals who do not have complete and proper documentation to avail a normal home loan, mainly the first-time homebuyers. This includes people like grocery shop owner, tailor, salon owner, taxi driver, etc. In such professions, people make daily earnings which are not properly recorded, and even if books are maintained, they are not accepted as valid proofs of income. This is why Axis Bank offers customized variants of their home loans to individuals on the basis of their banking behaviour and a personal discussion regarding their earnings.

Axis Bank Home Loan Eligibility

All individuals whether salaried, self-employed or professionals can apply for Axis Bank Asha home loan provided that the minimum income per month is Rs 8,000. For joint loan, the minimum combined income of all applicants should be Rs 8,000 per month. The minimum and maximum amount of loans is Rs 1 Lakh and Rs 50 Lakhs respectively. There is a 15% margin on the borrowing limits for loans up to Rs 30 Lakhs; for loans above Rs 30 Lakhs and up to Rs 50 Lakhs, this margin is 20%. The loan is available at both fixed rate and floating rate of interest. Foreclosure charges are nil in case of floating rate.

Other Terms and Conditions-

·         The minimum income requirement is Rs 8,000 to Rs 10,000 per month, depending on the location and cost of living.

·         Maximum loan amount is up to Rs 28 Lakhs for locations with population above 10 lakhs and up to Rs. 20 lakhs for locations with population up to Rs. 10 lakhs

·         Repayment period for Home Loans shall not exceed 30 years

·         Processing fee will be charged at 1% of the loan amount or Rs 10000, whichever is higher

Documentation for Axis Bank Asha Home Loan

Applicants have to submit the following documents to be eligible for an Axis Bank Home Loan-

·          

IIdentity Proof- Valid passport/Voter’s ID/Valid Driving license with photo graph/Pan card/Aadhar card;

·          

Residence Proof- Latest Electricity bill/ utility bill/ piped gas bill/ telephone bill/ Passport/ Registered lease Agreement with a utility bill in the name of landlord.

·         

 Income Proof- For individuals- Last 3 months salary slip/Latest Form 16, Last 6 months Bank statement/passbook of the salary account; For Self-employed- Income Tax  Returns for the last 2 years along with an income certificate by a CA, Last 6 months Bank statement for operative account.

In case you do not have complete documents to prove your monthly income or the earnings from your small business, Axis Bank can also extend loans to you based on a personal discussion. Loan executives will check the casual books you maintain at business and if satisfied, the loan will be processed.

Home is a basic requirement and everyone deserves to have a roof over the head. The government is also going that extra mile to provide basic housing to those with modest means. Asha Home Loan is an effort by Axis Bank in this direction as they believe that someone’s profession or lack of papers should not come in the way of owning a house.

What is floating interest rates of DHFL Home Loans?

There are several home loan providers in the market trying to mark their name in the competitive environment. One of those is DHFL which is doing great business these days. The bank belongs to the private sector but the facilities offered are one of the best in the market which make people look forward to avavil a loan from the bank. One of the major advantages that the bank provides is low rate of interest. The DHFL home loan interest rates are always at the lowest level making customers feel secured. However, the interest rates vary according to the type of the loan.

The best interest rate for loan

While there are different interest rates for different home loans, the best rate offered is 8.60% currently. This is flexible interest rate and will vary according to the market rate of interest and the margin mentioned by RBI. The effective rate of interest starts from 9%. This makes the EMI per month really low and makes it easy for anyone to afford a home at that EMI. Lower interest rate will also increase your eligibility as EMI is determined based on your paying capacity. 

DHFL home loan interest rates

Home loan interest rate for salaried and self-employed people may vary and the tenure can be 1 to 30 years. DHFL home loan interest rates usually start from 9% onwards. 

For salaried individuals

The interest for salaried individuals start from 9% per annum and that is applicable for loan amount up to 75 lacs. If you want to take a loan of more than 75 lakhs but less than 1.5 crore, the interest rate will be 9.15%. From 1.5 crores to 3 crores, the interest rate is fixed at 9.35% and for bigger amounts the interest will be 9.75%. 

For Self-Employed

For people who are self-employed,, the interest rate is a bit higher compared to the salaried employees. The interest rate for up to 75 lacs is 9.10% while for the range of 75 lacs to 1.5 crores; the rate is fixed at 9.25%. For loans over 1.5 crore and less than 3 crores, the rate of interest charged by the bank is 9.45% and for any amount more than that you will have to pay an interest of 10%. 

Apart from the home loan interest, a borrower also needs to pay a processing fee of Rs.5000 for a loan up to 30 lacs. For a loan up to 75 lacs the processing fee is Rs. 10,000 and for amount more than that the processing fee is Rs. 20,000. This is a nonrefundable amount charged by the bank and it is charged only once. There are some other charges too that depend upon the terms and conditions of the loan. 

There are several reasons why people choose DHFL as their home loan partner. One of those reasons is that the bank is a user friendly one and the interest rate is quite low too. The bank makes sure that the burden is lower for the borrower and thus tries to offer the best rate in the market. Apart from that, the processing of the loan is done quite early making it a convenient option for the borrower who wants things to be wrapped up as early as possible. The representative of the bank will guide you in every step of processing the loan and doorstep service is offered to customers who are unable to visit the branch. The documentation process is easy and hassle free and that is the reason why it has become easy to take a loan from DHFL.