Home loans for women - Everything you need to know

Buying a home remains one of the most important financial goals of life. But with property rates touching the skies, it has become almost impossible to become a home owner without some external finance. This is where home loans come in. With home loan, banks non-banking finance companies and housing finance organisations are making it rather easy for people to purchase their dream home. So long as you have the right documentation, can prove your eligibility and your repayment capacity, you can get your home loan approved easily. In fact, the government of India is also offering several benefits to encourage women to become home owners. Here is everything you need to know about home loans for women.

Home loans for women – loan eligibility criteria

To be eligible to reap benefits of home loans, a woman applicant needs to be:

• An Indian Citizen
• Between the age of 18 and 70
• Either the primary or the sole applicant
• A salaried employee with a good credit rating

Features and benefits of home loans for women

Higher rate of loan approval: The government of India has launched a unique scheme known as the Pradhan Mantri Awas Yojana Scheme. As per this scheme, the government is making provisions to provide people from economically weaker sections of the society, low and medium income group, and scheduled castes and tribes with a concrete or “pakka” house. This scheme also comes with special preferences for women including single working-women and widows. As per this scheme, loans with women as the principal or joint applicant are processed faster.

Stamp duty charges are reduced for women borrowers: Stamp duty charges make for an important part of the cost of the property and most people consider stamp duty charges as part of the loan component. As such, reduced stamp duty charges can also make a huge difference.  With home loans for women, women borrowers receive a concession of 1%-2% on the stamp duty charges. As such, if a woman purchases a home worth Rs. 50,00,000, she ends up saving approximately Rs. 50,000 to Rs. 1,00,000 on the charges levied on stamp duty.

Women can avail tax benefits: Tax deductions are provided to both male and female borrowers on repaying their home loan. The maximum deduction permitted in the repayment of the principal and interest amounts for male borrowers is Rs. 1,50,000 whereas that for female borrowers is Rs. 2,00,000. For instance, women borrowers applying for home loans as joint borrowers with their husbands can equally avail tax benefits.

Women receive flexible repayment tenures: While most home loans come with repayment tenures lasting up to 25 years, women applying for home loans can avail maximum repayment tenures lasting up-to 30 years or until the borrower turns 70 years of age, whichever is earlier.

Women are offered reduced interest rates: If you purchase anything by taking out a loan, you must pay an interest on the principal amount. In the case of home loans, where the loaned amount is often to the tunes of several lakhs, a lower interest rate, if only by half a percent also makes a huge difference. Remember that a lower interest rate also amounts to a lower EMI. Consider the following example:

Mr. A takes out a home loan of Rs. 50,00,000 from a housing finance company. The tenure of the loan is 20 years. The loan is offered at an interest rate of 8.65% per annum.

Miss B takes out the same amount loan for the same tenure. As a woman customer, she is entitled to a 0.50% reduction in the interest rate. This makes her home loan interest rate 8.60%.

In this example, Mr. A’s interest outflow is Rs. 55,28.083. Since Miss B receives the benefit of the 0.5% reduced interest rate, she pays Rs. 54,89,953 as her interest outflow. As such, Miss B’s savings from her interest outflow is as Rs. 38,130. As is evident from this example, the home loan rates for women contribute to sizeable savings.

Documents required

Completed loan application form: You must read the loan application form in detail, fill it as per the instructions provided on the form and submit it with documents mentioned in the form.

Photographs: You must provide 3 passport sized photographs.

Proof of Identity: You must provide any government approved documents that have your photograph printed on it as ID proof. These include your PAN Card, Aadhar Card, Voter’s ID, Passport etc.

Proof of Address: You also need to provide your current proof of address. Any government approved document bearing your address including your passport, electricity bill, telephone bill, Aadhar card etc., are accepted.

Financial proof: You are also required to provide your bank statements of the last six months, your proof of employment, salary slips, income tax returns of the last three years etc.