In India, approximately 70% of the population resides in rural society which suffice a bigger quota in terms of population. This means that the dependability on agricultural and rural parts is crucial. Thus, its development becomes a prominent reason to look into in different ways, be it investment, policies, loan facilities and much more. PMO India even started a scheme mainly targeting the rural or Gramin sector with the name of PMAY Gramin, targeting housing facilities to all, which comes into a bare minimum what anyone can expect for a healthy living other than fooding, clean clothes, water, and electricity.Β
And to counter the provision of housing for all, GOI came with rural home loans with eminent interest rates and good budget amounts so that its benefit can be optimised to its core capacity. Now, you must be thinking about what is a rural housing loan, how one can opt for rural housing finance, its documentation and much more.
To make it more convenient for you, this article has been compiled with comprehensive information about housing loan for rural sector and its accessibility. You can read it through and get an insight about rural housing loans and can avail its benefits to the maximum level.
Table of contents
About Rural Housing Loan
Rural Home Loan is an initiative under GOIβs objective of reasonable housing for all. Some of the specific considerations under the initiative are flexibility in eligibility criteria, bare minimum of documentation and processing fees etc. Maximum repayment terms of up to 30 years are available, with interest rates ranging from 8.05% p.a. to 13.75% p.a. From Rs. 2 lakh to Rs. 75 lakh may be borrowed.
What are the Features and Benefits of Rural Housing Loan?
If one opts for a housing loan for rural sector, they want it to fit in their pockets at the time of repayment in case of interest levied on the loan amount among other features and benefits of the rural home loan mentioned below:-
- No or very little processing charge
- Privilege in interest rate
- Longer payback terms
- Loan margins are lower, ranging between 10% and 20%.
- Some banks provide free insurance coverage.
- Help with personalised documentation
- More versatile repayment alternatives
- No prepayment penalty
- Loan servicing provided door-to-door
- Some banks give moratorium periods of up to 18 months
What is the Loan Term and Amount for Rural Home Loan?
- Flexible tenure possibilities ranging from three to twenty years
- The loan amount ranges from INR 5 lakh to INR 15 lakh, based on income, repayment ability, and project cost.
About Eligibility Criteria for Rural Home Loan
The eligibility criteria for rural home loan are thoroughly compiled below:-
- Individuals applying for the loan must be an Indian resident.
- Age must be 21 years or above
- Income must be steady and regular
- Single individuals or joint candidates with other family members, such as a parent, spouse, or children, who have a consistent source of income are eligible.
- Farmers, entrepreneurs, self-employed, salaried workers, and professionals are all eligible.
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Documentation Required for Rural Housing Loan
The list of documents that need to be submitted at the time of loan application are given below:-
Income and Identity Proof like
- Passport(valid)
- Aadhaar Card
- PAN Card
- Voter ID Card
- Some other KYC documents(if needed/ asked by the banks)
Salaried Individuals have to Submit Proof of Income like
- Salary slips of last 3 months
- FORM 16
- Latest ITRs
- PAN Card
- Bank statement of last 6 months
Income Proof that an Agriculturalist needs to Submit
- Bank statement of last 6 months
- A copy of agricultural land title paperwork as proof of land ownership
- Copies of agricultural land title documents as confirmation of crops being farmed
Income Proofs needed from Self-Employed Individuals such as
- PAN Card
- Last 3 years IT assessment
- The business’s profit and loss statement
- Account statements for commercial and personal use
NOTE: Banks can ask different documents from the individuals depending on their own criteria.
FAQ’s about Rural Housing Loan
Q1. What is rural housing finance?
Agriculturists, Planters, Horticulturists, and Dairy Farmers can apply for specially structured loans known as Rural Housing Finance to purchase an under construction / new / current residential real estate in rural and urban locations.
Q2. Can we get a home loan in a rural area?
Yes, it depends upon the agricultural land an individual owns and crops cultivated by them, you can easily apply for a rural home loan. This is the initiative started by GOI under PMAY Gramin yojana for providing affordable housing to all. You can look for the bank offering the best interest rate, repayment tenure, and check all the conditions and then can opt what suits you best.
Q3. Who is eligible for a rural housing loan?
The eligibility criteria for rural home loan is that the individual must be at least 21 or above, must be an Indian resident, must have a steady & regular income, and anyone having a steady source of income are eligible for the same.
