Home Loan Balance Transfer Eligible for PMAY Subsidy

All you Need to Know About Balance Transfer After PMAY Subsidy

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If you have availed of a housing loan, you may track the interest rates and consider transferring a high-interest rate loan to a different lender at a lower interest rate. You can opt for the same under the home loan balance transfer option. This helps you bring down your burden of heavy EMI payments.

Can I Apply for PMAY after Home Loan Transfer?

While home loan balance transfer is available for borrowers, the question on a borrower’s mind is: is PMAY applicable for home loan transfer in the first place? The answer is yes. You can apply for PMAY even after seeking the home loan balance transfer facility. The answer to a borrower’s question: can I transfer my home loan to another bank before availing the PMAY benefit is ‘yes’. An individual can avail home loan balance transfer and then apply for PMAY as long as the loan is taken originally after June 2015.

It helps to know what the PMAY entails in the first place. The Pradhan Mantri Awas Yojana (PMAY) is chalked out for home loans for construction, buying a home, repairing or remodelling and extending a home. As part of the PMAY, you get a subsidy on the basis of the carpet area and the income of the beneficiary.

Top Lenders Providing Balance Transfer Facility at Lowest Interest Rates

Many leading lenders provide home loan balance transfer option at low interest rates. Here are some of them:

Lender	Home loan balance transfer rate (p.a)
State Bank of India (SBI)	6.65 to 7.15 %
LIC Housing Finance (LIC HFL)	6.66 to 7.90 %
Axis Bank	6.75 to 7.20 %
Citibank	6.50 to 7.40 %
Tata Capital	6.90 to 8.75 %
Bank of India	6.85 to 8.35 %

(*Note: Interest rates are subject to change. They are subject to the lender’s discretion).

You can check out the various lenders and the interest rates that they offer on loans, available on Bajaj Markets, before deciding on a home loan balance transfer.

What are the Conditions to Apply for PMAY?

The PMAY scheme can be availed if:

You belong to one of the four groups that are categorised as EWS (Economically Weaker Section), LIG ( Lower Income Group), MIG - I (Middle Income Group -1) MIG-II (Middle Income Group-II).

For low-income groups, the annual income is between Rs. 3 Lakhs and Rs. 6 Lakhs.

For EWS, the annual income applicable is up to Rs. 3 Lakhs.

Your annual income is up to a maximum of Rs. 18 Lakhs income bracket, to qualify for the various groups.

If you belong to the MIG-I bracket, you will get a subsidy on interest at 4 % p.a.

If you belong to the MIG-II bracket, you will get subsidy on interest at 3 % p.a.

For MIG-I, the loan for which subsidy is given is up to Rs. 9 Lakhs. For MIG-II, the subsidy is on loan up to Rs. 12 Lakhs. Accordingly, MIG-II, borrowers can get as much as Rs. 2.35 Lakhs while MIG-II can get Rs. 2.30 Lakhs.

PMAY is available only if you are buying a home for the first time. You should also not own any pucca house if you want a subsidy on interest.

The carpet area of the house should be a maximum of 160 square metres for the first middle-income category and 200 square metres for the second middle-income category.

Also, you should not have availed any other benefits under other schemes or central aid before you applied for PMAY.

A beneficiary family would mean husband, wife and unmarried children. All family members would have to provide their Aadhaar details.

How Much Money can You Save via Applying for PMAY after Balance Transfer Facility?

When you apply for the housing loan balance transfer option, you will be able to lower the EMI and interest. If you have applied for PMAY, your savings will increase because of a subsidy on interest up to Rs. 2.35 Lakhs. You can use a home loan balance transfer calculator available online to compute the savings on interest and EMI. Consider this example: You have opted for a loan four years back. The existing loan is for ₹30 Lakhs and the annual interest rate is 8.75 % for a tenure of 15 years. This means your EMI is Rs.29,983. The overall interest is in the range of Rs. 24 Lakhs and the interest paid thus far, ie, for four years is Rs. 9.75 Lakhs. The balance principal is about Rs. 25.35 Lakhs.

At this point, you switch over to a lower interest rate of 7.40 % p.a. The EMI will now be in the range of ₹28,100 and the interest outgoing will be Rs. 11.78 Lakhs. The estimated savings in terms of EMI would be a little over ₹1,800 and interest would be Rs. 2,43 Lakhs. With home loan balance transfer after PMAY subsidy, you get an added subsidy on the interest of Rs. 2.35 Lakhs. This means your loan overall will drop to Rs. 23 Lakhs and the new EMI would be in the range of Rs. 25,000. The interest outgo would be Rs. 10.7 Lakhs. Your overall EMI savings would be upwards of Rs. 4,500 after applying for PMAY.

Look up the home loans and interest rates offered by lenders, available on Bajaj Markets, before you decide on switching over to a new bank. You can also check out your PMAY eligibility before applying.

Can I Apply for the PMAY Scheme After Loan Disbursement

You can avail PMAY after your loan is disbursed but you would need to do it immediately. You would need to check with your lender and seek suggestions on how to apply. The lenders would forward your application to nodal agencies, the National Housing Bank (NHB) and the Housing and Urban Development Corporation (HUDCO), which will verify the application and notify the lender.

You can opt for subsidy on interest balance transfer after PMAY and get a subsidy on interest so that you reduce EMI burden and interest on your home loan. However, it is important to check the interest rates of your current lender before switching over. Also, it helps to keep yourself updated about the PMAY subsidy and your income group.

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