Despite the economic growth, most of the Indian population is still homeless in rural or urban parts of the country. To handle this situation, the Government of India has various home loan schemes with more affordable rates than private real estate.
Here’s a list of vital home loan schemes for rural and urban householders to own their dream homes.
List of home loan schemes for rural householders
- Indira Awas Yojana (IAY)
- Pradhan Mantri Awas Yojana (Gramin)
- Rajiv Awas Yojana
- State-run Housing Schemes
List of home loan schemes for urban householders
- Smart Cities Mission
- Housing for All by 2022
- Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
- Pradhan Mantri Awas Yojana (Urban)
Although the schemes are known for offering affordable housing, you will need to have enough money to pay for the house. Here, the most preferred way of finance is a house loan.
The purpose of the house loan is to empower buyers with funds that can be used for:
- Buying ready-to-move-in house/flat/ flat under construction
- Home construction
- Undertaking extension/repairs/renovation/upgradation
Eligibility criteria for the housing loan
|1. Must be an Indian resident.2. Age: 21 years or above.3. Steady and regular income|
|All areas under the Statutory Town. The annual income of the household should not exceed 6 Lakhs.||Agriculturalists, entrepreneurs, and professionals are eligible.All areas under the Statutory Town. Individuals belonging to the lower societal sections as per RBI priority sector guidelines.The annual income of the household should not exceed 3 Lakhs Women should have property in their names, either single or joint.|
Read a Similar Article: 5 Best Ways to Repay your Home Loan Faster
Checking the EMI of the home loan
Once you’ve decided to choose your affordable home loan scheme, check out whether the loan fits into your monthly expenses. First, consider the EMI (Equated Monthly Installment), which takes the most significant part of the loan.
It is a monthly amount paid to clear the outstanding loan amount. In the initial loan tenure, EMI is the rate of interest. However, it remains constant throughout the loan period unless you have not opted for a floating interest rate.
So, here’s how you use the home loan calculator to calculate the EMI. Fill in all the details into the calculator to get accurate results to plan your loan journey!
EMI = P x r x (1+r) n/((1+r)n-1)
P is the Loan amount
r is the rate of interest
n is the Loan Tenure (number of months)
Necessary documents required for a home loan
Several necessary documents are required if you wish to go for a home loan scheme, either rural or urban.
For salaried individuals:
- Identity Proof: Aadhar card, PAN card (mandatory), passport, driving license, etc.
- Address proof: Aadhar card, Voter card, Credit card statement (recent three months), Property tax payment receipt, Life Insurance Policy, etc.
- Income proof: Bank statement (Last six months), ITR receipts, Salary slips (last two months).
For self-employed individuals:
- Identity Proof: Aadhar card, PAN card, passport, DL, etc.
- Address proof: Rent agreement, Aadhar card, Bank Statements displaying the address, Voter card, Life Insurance Policy, Passport etc.
- Address Proof for Business: Firm/ factory establishment certificate, SEBI registration certificate, trade license, SSI registration, VAT registration, PAN card, sales tax receipt, factory registration certificate, registration number issued by ROC, partnership deed, etc.
Which is the best home loan option for urban and rural householders?
The Pradhan Mantri Awas Yojna (PMAY) is considered the best scheme as it was developed with the mission of ‘housing for all.’ The main aim was to provide households for the homeless by the end of 2022.
There are online and offline modes for the application process for salaried and self-employed individuals. Here are the eligibility criteria.
|Economically Weaker Section (EWS)||Annual income less than Rs. 3 Lakh|
|Low-Income Group (MIG)||Annual income Up to Rs. 6 Lakh|
|Mid-Income Group (MIG)||Annual income Up to 12 Lakh (MIG1)Annual income Up to 18 Lakh (MIG2)|
Over to you
With so much information, it’s time you pick up the home loan calculator to find the best loan and kickstart your dreams of owning a dream home yourself! And yes, do not forget to choose a reputed and reliable bank to apply for a loan, as it will keep you stress-free in the longer term