Home Loans Likely To Get Cheaper For Underprivileged


MUMBAI: India is known for its population and poverty woes and it seems that the poor were not given priority by the last government. However it is no more worries for the underprivileged,  as they are the priority for the new government. As a result, now home loans for the underprivileged are set to get even cheaper with the government planning a new interest subvention scheme. With the help of this new scheme, a part of the home loan burden will be reduced, reports Times of India.

According to GS Sandhu, Mumbai finance secretary, the government would shortly announce an improved subvention for affordable home loans. He also added that under the scheme there would be interest subvention up to 5 percent for loans up to 5 lakh rupees.

Sandhu said that the new government had big plans and vision for affordable housing. "A blueprint on affordable housing plan is being prepared and the government is clear that they want time bound results," said Sandhu. He added that at present most of the burden falls on public sector banks and going forward real estate investment trusts could be a game changer for the sector.

Interest subvention is nothing but the subsidy that the borrower gets from the government which makes good the discount given by the lender. Earlier the UPA government introduced a 1 percent interest subvention in its budget for 2009-10. The scheme was introduced in the aftermath of the global financial crisis to revive the economy. The UPA government had also introduced a 3 percent interest subvention on loans to farmers.