Home Loan Subsidy

While owning a house is a dream for countless people, not everyone has the means to fulfil the same. This is where home loan subsidies can help. A subsidy on home loans can provide financial assistance to support your dream of owning a home easily.

Subsidy by Government

Considering the importance of having one’s own home, the Government of India launched the Pradhan Mantri Awas Yojana (PMAY) in the year 2015, with the aim of providing housing for all by the year 2022. Credit Linked Subsidy Scheme (CLSS) was launched under this mission. Everyone eligible for PMAY can avail of an interest subsidy under CLSS.
As per the PMAY scheme, a person can get a subsidised interest rate of 6.50% on home loans with a maximum tenure of 20 years. The scheme also benefits senior and differently-abled citizens by giving them a preference for ground floor allocation. The entire urban area of India is covered under this scheme. Another feature of the PMAY scheme is that construction will be done with eco-friendly technology.

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How to use Home Loan EMI Calculator

SuGanta.com Home loan calculator is very easy to use. Any individual who is looking to get a home loan or has already taken a loan can use it to check their EMIs. Take the following steps to check EMIs using this calculator:

Step 1: Enter the amount you want to borrow
Step 2: Enter the tenure (in years) for which you want to borrow
Step 3: Enter the rate of interest
Step 4: Click on “Calculate Your EMI”

After you take all these steps, you will be able to view your monthly instalment on your home loan.

How the Home Loan Calculator Helps You

Using the EMI calculator to know your EMIs in advance can be helpful in many ways. Check out some of the reasons why you should use it:

How much should you borrow? The calculator can help you decide the home loan amount, based on how much EMI you can afford to pay from your income. In other words, you can plan your finances better.

How long should the tenure be? Knowing the EMI you can afford to pay every month, you can determine the right tenure for your loan.

How much down payment should you make? Using the home loan EMI calculator, you can figure out how much you should pay as the down payment, in order to save maximum on your interest while keeping your EMIs to minimum.

Factors Affecting Home Loan EMI

There are multiple factors that can affect your home loan EMI. Check out some of the key factors below:

Loan amount: The loan amount your borrow affects your EMI. Higher the amount you borrow, the higher your EMI.

Loan tenure: The tenure for which you take a home loan also affects your instalments. If the tenure is longer, your EMI will be lower. Remember, longer tenure also means you pay more interest over the period as compared to a shorter tenure loan.

Interest rate: In case of floating interest rate loans, your EMI will change in line with the fluctuations in interest rates. If the rate goes up, your EMI also goes up.

An Illustration to understand how your EMI changes with these factors:

The table below shows estimated EMI based on different loan amounts and tenures.

Estimated EMI* (assuming rate of interest at 7% p.a.)
Tenure

Loan amount

Rs 30 Lakhs

Loan amount

Rs 60 Lakhs

Loan amount

Rs 1 Crore

5 years Rs 59,403 Rs 1,18,806 Rs 1,98,011
10 years Rs 34,832 Rs 69,665 Rs 1,16,108
20 years Rs 23,259 Rs 46,518 Rs 77,530
30 years Rs 19,959 Rs 39,918 Rs 66,530

How to Reduce Your Home Loan EMI

If you are looking to get a new home loan or if you already have one, here are some tips to help you reduce your home loan EMI:

Check with multiple lenders before finalizing your loan. Choose the one that offers you the best deal.

Don’t borrow more than you can afford. If you can’t afford to repay on time, don’t borrow.

Make a higher down payment. Lower the amount you borrow, lower the EMI.

Choose a longer tenure (but this also means you will be paying more interest over the period).

Make a prepayment on your loan, if and when possible.

Apply for a balance transfer home loan to get a better deal.

 

Frequently Asked Questions

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A Home Loan Subsidy is a government initiative that provides financial assistance to homebuyers, reducing the overall loan burden. Under the
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The Credit Linked Subsidy Scheme (CLSS)under PMAY provides interest subsidies of up to ₹2.67 lakh on home loans. The subsidy amount is credited upfront to the loan account, reducing the principal loan amount and making EMIs more affordable.
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Reduced EMI burden with upfront subsidy

Lower interest rates for eligible borrowers

Financial assistance for first-time homebuyers

Applicable for new and under-construction properties

Government-backed support for affordable housing

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Most public and private sector banks, housing finance companies (HFCs), and NBFCs offer PMAY subsidies. Notable lenders include SBI, HDFC, ICICI, Axis Bank, PNB Housing, and LIC Housing Finance.
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To apply:

  • Check eligibility based on your income category (EWS, LIG, MIG).
  • Apply for a home loan from a PMAY-registered bank or financial institution.
  • Submit required document like Aadhaar, income proof, and property details.
  • Bank processes the subsidy claim and credits the amount to your loan account