There is no restriction on the closure of bank loan if PMAY subsidy is availed of.



Pradhan Mantri Awas Yojana is a social welfare flagship program of the Government of India. The scheme aims to provide a place to reside for the economically weaker classes. With selected cities and towns across 26 states in the country, the government of India is going to build over 2 million houses for the urban poor. The last date to apply for LIG and EWS Category is 31st March 2022. For MIG (I and II) category to apply for a PMAY subsidy, the last date was on 31 March 2019.

For PMAY, apply online and avail all the benefits the scheme has to offer. An Indian citizen from the Low Income Groups (LIG) and Middle Income Groups (MIG) can apply under the PMAY subsidy scheme. As per Pradhan Mantri Awas Yojana (PMAY) norms, the maximum loan tenure is 20 years with no minimum period limit to continue the housing loan. Also, there will not be any pre-closure charges. Additionally, there is nothing like a loan under PMAY. This measure enables an eligible Indian citizen to buy a house with subsidy on interest payable on the home loan.

Loans under PMAY

The PMAY benefits can be availed if one wants to buy a new house from the developer or the builder and even repurchasing a house from the secondary market. Moreover, if someone already owning a home wants to avail PMAY benefit, there’s still a possibility. The government has stated that the Housing for All mission also provides for enhancements housing to the existing ‘pucca’ house under the CLSS component. So, a home loan provider has to approve an applicant seeking a home loan for the addition of a room, living room, etc to the existing houses solely to the applicant that already possesses a pucca house. 

As per the Reserve Bank of India (RBI) circular to all banks and NBFCs in 2014, no prepayment penalty will be charged to individual borrowers of floating rate term home loans. This was effective immediately and was applicable to all housing loans, existing as well as future home loans. With the help of a housing loan EMI calculator, you can calculate the EMI that you will be required to pay back.

Assuming a possible condition of availing PMAY, if none of the family members have a house in their name and this is the first house, let’s consider the combined household income of Rs 11.50 lakh. Then you will fall under the category of MIG-I. To be eligible for a PMAY subsidy, you must not own a pucca house either in your own name or in the name of any family member in any part of India. Here, the family members like husband, wife, unmarried sons and/or unmarried daughters are eligible to apply for the scheme. Secondly, the carpet area of the house should be up to 120 sq. meter (1292 sq. ft.) for MIG-I beneficiaries. However, if we consider only your income, you will fall under the EWS/LIG scheme. Here, in addition to the above first condition, one adult female membership is mandatory in property ownership.

Third, the location of the property should fall under all statutory towns as per the 2011 census and their adjacent planning area. Finally, the carpet area of the house under the Pradhan Mantri Awas Yojana schemes should be up to 30 sq. m. for EWS beneficiaries and up to 60 sq. meter for LIG beneficiaries. Affordable housing has been given infrastructure status in Budget 2017, this will aid developers in obtaining its associated benefits. But for a common man, the timely delivery of the house is still has a long way to go.