Home Loan For Women

Buying a home is a significant milestone. Most women looking to buy homes are turning to home loans to finance their dream. The chances of women getting a home loan approved are higher, and there are many benefits associated with it. Numerous banks and non-banking financial institutions (NBFIs) provide women with exclusive and competitive home loan interest rates.

Here’s all you need to know about home loans for women in India.

How Home Loan For Women Work

Women are seen as more trustworthy borrowers by lenders. Interest rates are a few basis points lower than the market rate for women. Even though the subsidised house loan interest rates may be 0.05% to 0.1% lower, they considerably influence the equated monthly installments (EMI) and reduce repayment. Having considerably lower default rates than male borrowers, women are more likely to have their loans accepted.

Some of the benefits women enjoy when applying for a home loan include the following:

Lower Stamp Duty

According to the Indian government, women who take out home loans are eligible for a 1% to 2% stamp duty rebate. On the house valued at INR 50 lakh, they can save between INR 50,000 and INR 1,000,000 with this benefit.

Tax Benefits

Both male and female borrowers are eligible for tax deductions when they pay off their loans. For male borrowers, the highest deduction allowed in the repayment of the principal and interest amounts is INR 1,50,000, while it is INR 2,00,000 for female borrowers. For instance, wives who apply for home loans jointly with their husbands are also eligible for tax benefits.

Pradhan Mantri Awas Yojana (PMAY)

A woman must be a co-owner to qualify for the Pradhan Mantri Awas Yojana’s INR 2.67 lakh in home purchase subsidies. The programme also intends to offer benefits on home loans to widows and single women who fall under the lower income group (LIG) and Economically Weaker Section (EWS) classifications.

Preferred Applicants

Years of loan data analysis have shown that female borrowers are less likely than male borrowers to fail on their loans. This feature also improves the chances that a loan application will be accepted. Historical patterns show that women are more likely to save, refrain from taking on unnecessary debt, and carefully handle household finances. Financial organisations are keen to lend money to female homebuyers because of all these benefits.

Personalized Home Finance Programme

Lenders are developing tailored home loan programmes with favourable terms for female borrowers, including longer payback horizons, fewer restrictions, and lower interest to make the home-buying process more straightforward.

Special Discounts from Developers

Many developers also offer female borrowers’ various schemes and discounts. A lowered booking amount, subsidy schemes, stamp duty waiver are examples of some of the benefits that developers offer to female borrowers.

Non-working female borrowers can also avail discounts

Even a non-working female borrower can avail the various benefits of home loans for women. They just need to have a working professional as a co applicant.

Home Loan For Men vs. Women

Let’s assume Mr Ramesh, a 35-year-old man, wants to apply for a home loan of fifty lakh rupees from a bank. The loan tenure is 20 years. He is offered the loan at an interest rate of 8.65% per annum.

At the same time, Ms Malini, a 35-year-old woman, also wants to apply for a home loan for the same amount. She is also issued a loan for a tenure of 20 years. Since she is a woman, she gets a 0.05% lower interest rate of 8.60%.

Now, let’s compare the benefits in cash terms. Mr Ramesh’s interest outflow will be INR 55,28,083 for the tenure. On the other hand, Ms Mailini’s interest will be INR 54,89,953. She will save INR 38,130 in total interest paid.

In addition to that, she will also save on stamp duty.

Eligibility Criteria for Home Loan for Women

A woman must be able to meet the requirements set forth by any financial institution before they will authorise a home loan for her. The following minimal and straightforward conditions apply to home loans for women:

• She needs to be an Indian national.
• Her age needs to be between 20 and 60 years.
• She should have at least two years of work experience.
• A credit score of not less than 650 is required.
• A monthly family income of at least INR 15,000.

Documents Needed for a Home Loan for Women

There are some general requirements, although the list of documents needed can vary depending on the financial institution one is applying to. These include:

• Adhering to specific guidelines must complete the application for a home loan.
• PAN cards, passports, Aadhar cards, and licences serve as identity documents.
• PAN cards, passports, Aadhar cards, and licences serve as identity documents.
• Passport-size photos.
• Financial statement.
• Salary slips from the previous three months (salaried employees).
• Information about the company, such as income tax returns and confirmation of employment.

Challenges in Applying for a Home Loan

As with everything else, there are some loopholes in applying for home loans as a woman. While women who apply for home loans as co-applicants tend to get their loans sanctioned quicker, single and unmarried women may find it harder, anecdotal evidence suggests.

Some reports suggest that the probability for a single woman to be asked to have a co-applicant is much higher than a married woman. While there is no policy in this regard, some seem to think that single women are more likely to default.

Bottom Line

Women do have numerous advantages when applying for a home loan. However, it would be best if you considered all your options and the various benefits you are entitled to before you get a loan sanctioned.

Make sure to think about the ideal time to buy before you decide to apply for a mortgage. Examine the government programmes that provide first-time female home purchasers with interest subsidies, appealing housing costs, and regulatory transparency, making this the ideal time for women to own real estate in India.