Credit Linked Subsidy Scheme: All You Need To Know as a First-Time Homebuyers

In 2015, the Government of India launched a scheme to help the financially deprived population living in urban areas to get a roof over their heads - known as the Pradhan Mantri Awas Yojana.

Credit Linked Subsidy Scheme (CLSS) is a component of PMAY for Lower Income Group/Economically Weaker Section (EWS/LIG) and Middle Income Group (MIG – I &; II). Under this scheme, not only the economically weaker sections but also middle-income groups can avail a home loan at reduced EMIs.

Thus the government is offering a helping hand to those who are planning to buy a house amidst the current covid-19 crisis to encourage first-time home buyers.

At Shubham, our goal is that everyone should have their own home. We help you to fulfil your dream through the Pradhan Mantri Awas Yojana – Credit Linked Subsidy Scheme (PMAY-CLSS). Shubham Housing Finance helps beneficiaries to avail of this subsidy across the country.

An applicant can take advantage of a maximum interest subsidy of up to Rs. 2.67 lakhs. The central government offers an interest subsidy that is credited to the account of the qualifying beneficiary. Eventually, a beneficiary earning subsidy from Rs. 2.67 lakhs on a loan sum of Rs. 20 lakhs for a tenure of 20 years at an interest rate of 11% receive a home loan at an efficient rate of 8.79%.

The scheme is available to those who do not own a “pucca house” of their own anywhere in India. Second, the subsidized interest rates vary according to annual income, loan tenure, and loan amount.

A MIG I category can get an interest subsidy of Rs 4 per cent on an annual household income between Rs 6 lakh to 12 lakh. The subsidy is available for acquiring or constructing a house with a carpet area of up to 160 square meters. For MIG II, this limit is 200 sq.m. The home must have necessary infrastructures such as water, sanitation, sewerage, and access to road and electricity.

Those in the economically weaker section (EWS) and low-income group (LIG) categories can get a maximum subsidy of ₹2.67 lakh. In contrast, for MIG I and MIG II categories, the subsidy limit is ₹2.35 lakh and ₹2.30 lakh respectively.

You can calculate how much subsidy you are eligible for at http://www.pmaymis.gov.in.

The best part of the scheme is that this scheme is brought into action to make sure you become a homeowner on simple terms. If you want to avail a loan under the CLSS scheme, the procedure is relatively easy. All you need to do is fill the application form along with the related documents. 

 

The housing finance company shall approach the nodal agencies to begin the process of transferring the subsidy to your bank account that you are entitled to.

After that, the interest subsidy gets credited upfront to the borrower’s account, thereby reducing the outstanding loan amount and reducing the equated monthly installments (EMIs).

You can also track the application status at pmayuclap.gov.in. Typically, it takes three to six months for the subsidy to get credited to your account.

Conclusion:

This initiative by the government is playing a pivotal role in increasing the demand for housing in the affordable segment, encouraging more people to fulfill their aspirations of buying a home. According to the government, the extension of the CLSS for the MIG category until March next year is expected to benefit 2.5 lakh, middle-income families, in the current fiscal year.

Thus, it is a good step taken by the government to help the housing sector in coping with the COVID-19 crisis. The government should consider extending the CLSS until March 2024 for all the income categories.

If you have any more queries related to PMAY- CLSS scheme, you can write to us in the comment section below. You can also check the website Shubham Housing Finance to apply for the CLSS subsidy.

EMI Calculator for Housing Loan: Features and How To Use It?

 

Are you looking to get a reasonable estimate of your monthly EMI on your Home Loan?

As while planning to buy a house, one of the most critical factors is to decide how much loan must be availed. Using an EMI calculator is the easiest way to determine your monthly payouts and balance your budget accordingly.

A home loan EMI is the repayment of the loan amount which you will need to pay with interest during the given tenure. It is a simple loan calculation tool that helps the user to calculate EMI and view the payment schedule quickly. 

Shubham Housing Finance Development Company has a unique EMI Calculator which allows you to calculate your loan tenure and monthly instalments to be paid towards the home loan repayment.

Why should you use an online EMI home loan calculator?

Borrowers who are not comfortable with complicated calculations, find it easier to estimate house loan EMI by using EMI calculators as it gives correct results and allows you to compare EMI on different home loan schemes instantly.

Here, let us take a look at some of the features of a home loan calculator:

1. Comparative analysis: 

You can compare the loan schemes provided by various banks and Housing Finance Companies. If you are looking for lower EMI and attractive interest rates, you can consider Shubham Housing Finance as it helps you to repay your loan comfortably.

If you have already taken a home loan from any other financial institution and are unhappy with the service or wish to reduce the burden, you can apply for Shubham Home Loan Balance Transfer.

2.Repayment scenarios: 

A home loan calculator may be used by a borrower to get the results by entering information such as monthly payments, interest rates, and loan tenure based on their repayment schedules.

3.Customized calculation: 

When you calculate the loan EMI, you know the particular amount, tenure, and interest rate, you have to pay when you borrow a loan. It helps you plan your finances before taking the loan so that your monthly budget does not take a hit. A borrower can also get customized results to reach the most suitable EMI according to their requirements.

4.Anytime Access: 

The EMI calculator is easy and convenient to use as it makes accurate calculations in less time. It can be accessed anytime and anywhere. You can use the calculator any number of times as per your convenience. You do not have to visit the branch or get involved with figuring out complex mathematical calculations; instead, you can access the Shubham online EMI calculator.

How to use a home loan calculator?

A home loan calculator helps you know the amount of EMIs that you will need to pay towards your Home Loan and helps make an informed decision. 

You can use the EMI calculator in three simple steps:

- You need to enter the loan amount you wish to take

- Then enter the loan tenure

- Enter the rate of interest

Using an EMI calculator, you have the flexibility to decide the amount that you are comfortable to pay off monthly and the duration for which you wish to make the payments depending upon your income and financial stability. With an affordable interest rate and flexible repayment tenure, Shubham Housing Finance ensures a comfortable home loan EMI for you. 

If you have any doubts related to your Home Loan EMI, you can reach out to us at customercare@shubham.co, or you can write your thoughts in the comment section below!

Smart Tips To Reduce Your Home Loan Burden

With the rise in the real estate prices, it is difficult for most of the Indian to buy a house on one's savings. However, availing a home loan is the only option for most to achieve this goal. The large-ticket size and long tenure contribute to higher EMI, leaving little space for other financial purposes. Besides, any upward home loan interest rates or EMI can deteriorate your finances.

Here are some of the ways how a new borrower or an existing borrower can reduce the home loan burden:

1. Compare interest rates online

In today's world, one of the best ways to check home loan interest rates is to go online. You can check for the various websites to get a summarised view of interest rates, fees, and other charges included by various lenders. Therefore, it is essential to do proper research before availing a home loan to ensure you get the best deal.

There are also few banks and housing finance companies that provide the best interest rates. Shubham Housing Finance is one of them, which offers home loans to customers at a competitive interest rate. Based on the distinctive requirements of the customers, Shubham offers tailored home loan solutions to all.

2. Opt for longer repayment tenure of your loan

Before opting a home loan one should calculate the tenure and corresponding charges accessible to you. Therefore, it is recommended to choose the longer tenure because the longer the tenure, the lower will be the EMI payable every month. So you should choose the home loan tenure carefully as this impacts the amount of EMI you will be required to pay every month.

At Shubham Housing Finance, you can get a clear understanding of the amount that you need to pay towards your EMI. They also help their customers make an informed decision about the monthly outflow towards the home loan.

3. Make a bigger down payment

A down payment is the upfront payment the borrower makes to the financial institution. In India, lenders can provide 80% of the property value as a home loan, while the borrower has to arrange the rest 20%.

Thus, if you contribute a higher amount as a down payment, the lower will be your Loan to Value ratio, which in turn enhances the loan eligibility and also increases the chances of loan approval quickly. But remember while trying to make a higher down payment, don't overstretch your finances as it may hinder the achievement of other important goals.

4. Make home loan prepayment

If you have disposable cash, then you can use the amount to prepay 5 - 10% as the principal amount. As prepaying a minimum percentage of your loan would significantly reduce the total loan outstanding, thereby lower your EMI payments. You can request the lender not to lessen the repayment tenure but instead reduce your EMI amount.

Banks generally charge a prepayment penalty fee, but with Shubham Housing Finance you don't have to pay any hidden charges.

We believe, now you have a proper understanding of reducing the burden of your home loan. If you still have any doubts, you can always write to us. We have got your back!

How Much Home Loan Can I Get on My Salary?

Buying a house is considered a significant achievement, especially in Indian culture.

However, for the majority of the population, the aspiration of buying a house can only be achieved late in their lives after they have accumulated sufficient savings. This is where availing a home loan can catapult oneself to achieve their homeownership's wish.

But most of the time, the question that pops into our mind is how much loan can I get on my salary?

Because, lenders generally offer you the loan amount depends on criteria like monthly income, age, location, existing obligations, etc. This article will explain to you what part of the salary is taken into account and what are the factors influencing eligibility criteria and how to get a home loan quickly.

How Do Lenders Evaluate Your Monthly Salary?

At Shubham, we generally consider in-hand salary to determine the home loan amount. They consider the net monthly income by deducing monetary incentives from your in-hand salary such as

-Basic salary

-Medical allowance

-Leave travel allowance (LTA)

-House rent allowance (HRA)

-Other allowances, etc.

However, this is not the final amount taken by the employee; there are some compulsory deductions from the gross total such as Employee Provident Fund (EPF), Tax Deduction, and Professional Tax, etc. After this, what remains is known as the in-hand or net salary of an employee. This net salary is taken into account while calculating your home loan eligibility.

Once your net monthly income is gathered, lenders then demand the following documents as proof of income:

• Payslips of last six months
  
• Bank statements
  
• Form 16 of the past two years
  
• Certificate indicating TDS
  
• PAN card for identity proof
  
• Details of an existing loan, if any
  

If your monthly salary evaluation goes well, your home loan application can quickly receive approval from the lender.

Use a home loan calculator before applying for a home loan

A home loan calculator equates your monthly EMI payments using three factors – loan amount, tenure, and home loan interest rates.

If your net monthly salary is ₹40,000, you can get a home loan up to approximately ₹24 lakh. Likewise, if you earn ₹35,000 per month, you can get up to ₹21 lakh. Existing loan EMIs and obligations can lower the actual loan-to-value. Hence, foreclosing any existing loan or paying off credit card debts is an ideal way to increase your home loan eligibility.

However, a higher-income will fetch you a higher home loan. Suppose, if more than one member is earning in a household, the net monthly income of earning members can be combined to arrive at a higher home loan eligibility amount.

Conclusion: 

Keeping all these factors in mind, you can ensure the desired loan amount. It is recommended to use Shubham's Home Loan Eligibility Calculator before applying for a Home Loan. At Shubham Housing Finance, we look at your potential to repay the future loan and based on that we provide you with the loan.  

Let us know about any questions you have in the comment section below, also, you can reach out to us at 1800 258 2225.

Don't Just Consider the Interest Rates When Taking a Home Loan, Ask Yourself These Five Questions?

Interest rates on home loans have been falling ever since the lockdown. Customers can now avail home loans at much lower rates.

While interest rates are one of the critical factors borrowers look at when choosing a lender, it's essential to consider some other aspects too.

Banks offering cheaper rates can provide loans to borrowers with a high credit score. In such cases, borrowers need to look at Housing Finance Companies or NBFCs to get a better offer and faster processing of a loan.

Now that home loans are available at delectably low rates, the house you decided to purchase might be well within reach. You may not be wrong in deciding to buy it, but in a hurry, don't take on a responsibility that you are not prepared for.

Ask yourself these five questions before you borrow a loan:

1. Which one would you choose first: home or home loan?

Sometimes, it is true that in eagerness to buy a house; you finalize the deal with a broker only to find that the bank has refused to authorize your loan. What if the seller wants the payment within a specific time frame and you don't have the money? What if you are not able to provide the EMI or the down payment the financial sector demands.

Thus, it is essential to find out all the details about the loan from the lender, conduct due diligence, the loan amount, the processing fee, the other charges that the financial company levies. It will help you to calculate the exact amount you need at hand and the loan amount that you can avail of.

Also, there are various housing finance companies such as Shubham Housing Finance, Aadhaar Housing finance, where you can avail a loan with zero credit score.

2. Do you have a secure job?

The interest rates may be low, but is your job safe and secure? In these uncertain times, you need to be sure that your business or company is financially stable and your earnings are secure. So make sure that you will be able to pay the EMI in the long run before taking a large ticket loan.

3. Did you skip a loan during the lockdown?

Have you suffered a pay cut or lost your work due to the pandemic in the past six months? Or, maybe, you have refused to pay your credit card amount. All these changes will affect your credit score and the amount of home loan you can avail of.

However, with Shubham Housing Finance, you don't have to be worried about your credit score as Shubham Housing Finance doesn't look at your credit score. They offer you a loan based on your income and repayment capability.

4. Do you have funds for a down payment?

The Reserve Bank of India has directed banks and NBFCs to accept a maximum of 80% of the value of the property as a home loan.

Suppose, if you buy a house worth Rs 80 lakh, you will have to pay Rs 16 lakh as a down payment to the bank or housing finance company.

If you had been saving for the down payment and experienced significant losses during the pandemic. In that case, it is advisable to place the purchase on hold until you have accrued the sum needed instead of taking a larger loan. The larger the loan, the more significant the portion of the interest you repay, even though the rates are low.

5. Are you purchasing a house for investment?

If you buy a house for self-occupation and have ample funds for a down payment and EMIs, due to the low-interest rates. In such cases, this could be the perfect time to make a purchase. However, the cause of buying a house as an investment should not be a low rate of interest.

With Shubham Housing Development Finance Company, you can avail with minimum documentation and zero credit score. If you have any queries, you can write your thoughts in the comment section below.