Can you pre-pay and close loan if you are availing PMAY subsidy?

Updated: Jun 17, 2020 9:21 AM

The PMAY subsidy availed is subject to keeping the loan alive for the entire period. This happens because the upfront subsidy is credited to the account keeping the loan period for the calculations.

PMAY, home loan, PMAY subsidyPMAY subsidy availed is subject to keeping the loan alive for the entire period.

Chaitali Dutta

My home loan from HDFC has completed 1.5 years and in March, I got a subsidy in my account. Now, I want to make Rs 1.5 lakh prepayment. HDFC says I can do prepayment only after 1- 1.5 years or else the subsidy will be reversed. Is it true?
—Paras Jain

Yes, the PMAY subsidy availed is subject to keeping the loan alive for the entire period. This happens because the upfront subsidy is credited to the account keeping the loan period for the calculations. In case the loan is prepaid the subsidy amount is reversed and you will lose part of the benefit.

I was unemployed for two years; 2018 – 2020 till date. In between I took Rs 8 lakh personal loan at EMI of Rs 18,536. My credit card bill totals Rs 9 lakh. Now I have to pay them all, about Rs 17 lakh, or EMI goes up to Rs 1 lakh. How can I come out from all this?
—Gautam Sinha

Your determination to get out of this debt trap is key to how successfully you will be able to navigate the road to a loan free situation. Take these steps at once: (a) Use existing assets to pay off as much of outstanding amount as possible. (b) Pay off the most expensive loan first. Usually, that’s credit card loans. Once a loan is paid off, destroy the card. (c) Then consolidate the smaller outstandings into a single loan. (d) While you try for a permanent job, take up small projects to ensure a steady cash flow. Use LinkedIn and professional contacts to reach out to people. Cut unnecessary expenses. Survive only on the bare minimum. Stop paying premiums by availing of revolving credit on the credit card.

My PNBHF home loan EMI was over-due by two months since the last 8-10 months. I was managing the same status till March and also have paid 60% in April 2020. What should I do?
—Ramesh K Murthy

Your overdue months will be considered on the non-payment of pre-March 2020 situation. Hence, even if you take the moratorium for either 3 or 6 months, your overdue months will be considered as one month only (since you have paid 60% of overdue amount). Request for a moratorium via web page available on website; missed call at 8743950000 from registered mobile number; mail to customercare@pnbhousing.com from registered email id.

The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance. com). Send your queries to fepersonalfinance@expressindia.com

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