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Tata Capital > Blog > Loan for Home > How Much Time Does It Take to Get PMAY Subsidy?

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How Much Time Does It Take to Get PMAY Subsidy?

How Much Time Does It Take to Get PMAY Subsidy?

If you have been wanting to purchase a home but can’t afford the high housing loan interest rates, then this is the best time check out whether you can apply for a loan interest subsidy under the Pradhan Mantri Awas Yojana (PMAY). The PM Awas Yojana aims to provide “housing for all” by the year 2022. 

Let us understand what is Credit Linked Subsidy Scheme all about.

What Is Credit Linked Subsidy Scheme (CLSS)?

The CLSS is one of the four components of the Pradhan Mantri Awas Yojana (PMAY-U). Under CLSS, economically backward sections can avail of interest subsidy, also known as the Pradhan Mantri Awas Yojana subsidy. The beneficiaries of PMAY-U include- Economically Weaker Sections (EWS), Lower Income Groups (LIG), and Middle-Income Groups (MIG).

Also, read – Difference between PMAY Gramin and PMAY Urban

What Is Government Subsidy on Home Loan?

The Indian Government to provide affordable housing options under the PMAY scheme is offering Pradhan Mantri Awas Yojana subsidy on home loan interest rates. This home loan subsidy on the interest rates is to benefit the urban poor by making housing finance more affordable.

What Is PMAY Subsidy and Its Classifications?

The subsidy rate and the amount is fixed as per the Government guidelines; hence they cannot be altered. The eligible applicants can avail the subsidy under the following guidelines. 

BeneficiaryAnnual household incomeMaximum loan amount allowed for availing subsidyInterest rate subsidy
Economically Weaker Section (EWS)Up to Rs.3 lakhsRs.6 lakhs6.5% p.a.
Low Income Group (LIG)Rs.3 to 6 lakhsRs.6 lakhs6.5% p.a.
Middle Income Group 1Rs.6 to 12 lakhsRs.9 lakhs4% p.a.
Middle Income Group 2Rs. 12 to 18 lakhsRs.12 lakhs3% p.a.

Also, read – Why Should You Keep Women as a Co-owner to Avail PMAY Benefits?

What Is the PMAY Subsidy Approval Time?

After document verification, the PMAY subsidy time will be between three to four months. The decision of providing a subsidy depends on the Government. The applicant’s chances of getting approved for the subsidy are higher if the documents and details provided are complete and accurate.

Also, read – All you Need to Know About Pradhan Mantri Awas Yojana for Existing Home Loan

PMAY Eligibility to Avail Subsidy

  • A beneficiary’s family should comprise of husband, wife, and unmarried daughters and sons.
  • The beneficiary should be a first-time homebuyer, and should not own any pucca house in their name or the name of any other family member in India.
  • The beneficiary or their family should not have already availed central assistance under PMAY scheme or any different Government housing scheme.
  • The beneficiary’s annual income should fall under any one of the above mentioned four categories.
  • Married couples can apply for subsidy under individual or joint ownership of the property.

You can apply for Pradhan Mantri Awas Yojana online. The PMAY online apply process is quick and straightforward. Log onto the official PMAY website and click on the ‘Citizen Assessment’ button. Then enter your Aadhar card number, after which you will be re-directed to the Pradhan Mantri Awas Yojana form. Duly fill out the form and click on ‘submit’. After submitting, you will receive an application number to check if your name is there on the PMAY list.

Also, read – How To Get Assessment ID For PMAY Now?

PMAY Subsidy Processing Time Breakdown

The PMAY subsidy is a government benefit offered under Pradhan Mantri Awas Yojana (PMAY) to make home ownership more affordable. Under its Credit Linked Subsidy Scheme (CLSS), you can get an interest subsidy on your home loan, which reduces the overall borrowing cost.

The PMAY subsidy processing time generally ranges between 3 to 4 months from the date of loan disbursement. First, the lender verifies your eligibility and documents, followed by submission of the claim to the central nodal agency. After this, the application is scrutinised by for approval by the government agencies. 

After the 3-4 months PMAY subsidy processing time, the amount is released and credited directly to your home loan account. However, any delay at any stage like documentation, data mismatch, or backlog at verification stages can extend this timeline. So, you must set realistic expectations about the PMAY subsidy duration to reduce any uncertainty during the waiting period.

Also, read – Top 5 Reasons for Not Receiving PMAY Subsidy on Housing Loan

How to Track Your PMAY Subsidy Application Status?

During the PMAY subsidy processing time, tracking your subsidy status is a pretty straightforward process, that seeks to add transparency to the process. CLSS Awas Portal (CLAP) is a real-time monitoring system, serving as a single platform where everyone involved; government authorities, lending institutions and you as the beneficiary, are connected.

Once your application is submitted, you receive a unique tracking ID. Using this, you can follow your application at every stage during the PMAY subsidy duration, from submission to final subsidy release. You’ll also get SMS updates as your application moves forward, so you’re not left guessing.

CLAP also verifies your Aadhaar details at the time of application to avoid duplication and delays. Overall, it ensures quicker processing, better transparency and fewer follow-ups for you.

Also, read – What is The Affordable Housing Criteria to be Eligible?

Factors Affecting PMAY Subsidy Duration

Several factors can affect the PMAY subsidy duration. Common reasons for delays include:

  • Incomplete or incorrect documents, which require re-verification
  • Eligibility mismatches, such as income category, property size, or ownership details
  • Slow processing by the lender, especially if applications are not forwarded on time
  • High volume of subsidy claims being handled by nodal agencies at a given time
  • Policy updates or peak demand periods, which can extend approval timelines

Impact of PMAY Subsidy on Home Loan EMI

After the PMAY subsidy processing time, when the PMAY subsidy gets credited, it is adjusted against the outstanding principal of the home loan rather than paid in cash. This amount is adjusted upfront by reducing the principal loan amount, rather than being paid in cash.

As a result, the borrower pays EMIs only on the reduced loan balance. For example, if a borrower takes a home loan of Rs. 6 lakh and is eligible for a subsidy of Rs. 2.20 lakh, the subsidy is deducted from the loan amount. The effective loan then becomes Rs.3.80 lakh, and EMIs are calculated only on this lower amount.

Over the long term, the borrower can make significant interest savings and reduce their financial strain. The subsidy therefore acts as a structural benefit rather than a one-time gain, making home ownership more sustainable for eligible home buyers. If you are looking to apply for a home loan under PMAY, head to Tata Capital. We accept housing finance applications under the PMAY scheme. Use the EMI calculator to estimate your monthly payments and plan your finances better. Log on to www.tatacapital.com and learn more about what is PMAY subsidy, and also check your Pradhan Mantri Awas Yojana eligibility.

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FAQs

Is home loan insurance necessary or optional?

 

The PMAY subsidy duration is limited to a specified period as per the scheme guidelines and only applies to the interest component of the loan. Overall, buying a home loan insurance is optional, not mandatory. Lenders may recommend it for financial protection, but you are free to choose whether to buy it. It is meant to safeguard your family from repayment burden in case of unexpected events.

What events does home loan insurance cover?

 

Home loan insurance usually covers death, permanent disability, and sometimes critical illness of the borrower. In such cases, the insurer pays the outstanding loan amount to the lender, reducing financial stress on the family.

How much does home loan insurance cost?

 

The cost depends on factors like loan amount, tenure, borrower’s age, and coverage type. Premiums can be paid as a one-time amount or in instalments and are generally lower than regular life insurance for similar coverage.

Can I cancel my home loan insurance policy?

 

Yes, you can cancel the policy. If cancelled within the free-look period, you may receive a refund after deductions. For cancellations later, the refund depends on the policy terms and how much coverage has already been used.

Does home loan insurance provide tax benefits?

 

Premiums paid for home loan insurance may qualify for tax deductions under Section 80C, subject to applicable limits and conditions. These tax benefits are separate from government housing schemes such as PMAY, which offer an interest subsidy only for a limited period after the PMAY subsidy processing time. It is advisable to check with a tax advisor for clarity based on your individual situation.

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