Credit subsidy interest relief schemes, which subsidize the interest rate on loans to provide monetary assistance to individual or groups of people borrowing funds, are used to help individuals to borrow money. Examples of credit subsidy schemes are the Credit Linked Subsidy Scheme (CLSS) and the Central Sector Interest Subsidy Scheme (CSIS). The CLSS scheme provides interest subsidies for housing loans with the purpose of making housing more affordable for EWS and LIG in urban areas. CSIS provides interest subsidies on education loans for students from economically weaker sections of society pursuing higher education in professional/technical courses.
Credit Linked Subsidy Scheme (CLSS) – PMAY-Urban:
• Objective: The objective is to make housing affordable for EWS and LIG individuals in Urban Areas.
• Eligibility: Individuals with housing loans from Banks, Housing Finance Companies, etc., within the income limit.
• Beneficiaries: Interest Subsidy upto of 6.5% will be given for a period of 20 years or amount of the loan tenure (whichever is lower) for housing loans upto 6 lakhs.
• Implementation: The subsidy is given upfront in the loan account through Primary Lending Institutions, which reduces the effective loan amount and EMI payable.
Central Sector Interest Subsidy Scheme (CSIS) – Ministry of Education:
• Objective: To provide interest subsidy for enabling students from economically weaker sections of society to pursue Higher Education in Professional/Technical courses.
• Eligibility: Students from families whose annual income is up to Rs. 4.5 lakh.
• Beneficiaries: Interest subsidy will be provided for the moratorium period (lending for the duration of the course plus one year) in Education Loans.
• Implementation: The scheme is applicable for loans taken from Scheduled Banks under the Model Education Loan Scheme of Indian Banks Association. The Nodal Bank for implemementation is Canara Bank.
