A home is one of the most basic human needs. Until now, the focus in terms of housing finance was mainly on urban areas. However, today there is a paradigm shift in housing loans; from urban to rural areas of the country.
The majority of India’s population resides in rural India. Keeping this in mind, the Indian Government is now focusing on developing the socio-economic standard of rural India by making housing affordable to them. Earlier people living in these areas mainly availed of agricultural loans. Today, higher literacy rate and an increased number of jobs have raised the wants of the rural population. People in rural India are now seeking to upgrade their standard of living. A large number of financial institutions in India are offering attractive housing loans to the rural people.
Rural housing loans to buy property in India may be used for renovation or construction of rural homes. These home loans range from INR 5 lakhs to about INR 15 lakh depending on the repayment ability and the income of the applicant. Banks and Non-Banking Financial Companies (NBFCs) offer flexible repayment tenure where rural applicants may repay the loan within3 to 20 years. Although most of these loans are affordable, the interest rates charged by each financial institution may differ.
An advantage of rural housing finance is that these loans are generally obtained without any hassles. Additionally, lenders charge a minimum processing fee and may sometimes even waive off the entire processing fee. Also, some lenders do not levy penalty charges on prepayment of the loan. The repayment options for rural housing loans are flexible as well. Such benefits are provided for the development of this section of the country.
Moreover, there are lenders that offer special schemes to women in rural areas. Through such schemes, women are granted concessional interest rates in order to encourage them to buy homes.
The Prime Minister of India, Mr. Narendra Modi, has the vision to provide housing for all by the year 2022. In this strive, the ‘Housing for All’ scheme was launched in June 2015 and is now reformed to Pradhan Mantri Awaas Yojana. This scheme will provide assistance for the construction of 1 crore houses in the rural areas over the period of 3 years that is from 2016-17 to 2018-19. Also, the assistance provided to those in the plain areas will be set at INR 1.2 lakh, while that for the hilly states, Integrated Action Plan (IAP) districts, and difficult areas will be INR 1.3 lakh.
This scheme highly benefits those individuals who wish to buy property in India. By offering such schemes of rural housing, the development of rural areas is accelerated. Besides, such schemes also help to enhance employment opportunities through an increased demand for construction-related services. All these factors result in the socio-economic development of such areas.