Home Loan Benefits for Women in India

Continuously government authorities are operating in the direction to empower women and trying to increase their role in financial matters. Owning a house is certainly a much-needed step in the direction of economic and social security of women.  Numerous private and government agencies have taken concrete steps to empower them. Some of the steps include exceptional bank accounts for women and the female girl child, giving a loan on lower interest rates and  various schemes which promoting the idea of purchasing a home on their name.

Let us check out a few advantages of applying for a home with a woman as a co-borrower:

Concessional Interest Rates: Interest rates have a direct relationship with the cost of a home loan. A slight variation in the interest rate can substantially impact the interest cost incurred over the years. This interest rate variation means that the Equated Monthly Instalments or EMIs would come down too. Most banks and NBFCs in India offer a concession around 0.05% in the interest rates provided to women borrowers.

For an example – An individual avails home loan from State Bank of India at 8.40% per annum. In case if this is a joint home loan with a female person, the interest rate will be 8.35%.

Following are the documents required to avail concession:

• Duly filled in loan application & 3 passport size photographs
• Identity Proof (PAN/Passport/Driver’s License)
• Address & residence proof (Aadhar card, passport, driving license or telephone/electricity/water/gas bill)
• Salary certificate/salary slips/Form 16 copy/statement from 26 AS

Reduced Stamp Duty: Stamp duty forms a substantial part of the cost of a property. The rates vary at different states of the country. Many states in India offer a reduced stamp duty rate for women buyers. A concessional 1-2% stamp duty rate in comparison to a male buyer makes a huge difference in the homeownership cost. For example, on a property valuing Rs. 50 lacs, a woman can save approximately Rs.50,000-1,00,000.

Tax Benefits: Women are also eligible for a deduction in their tax amount owing to the home loan repayments. Women borrowers who seek loans along with their husbands can avail the tax benefit in an equal proportion with their spouse.

Increased Home Loan Eligibility – Home loan eligibility is subject to income of the applicants, their credit score & approved properties. In case of a join home loan application, there is an enhancement in home loan eligibility. Combined income of both the applicants is taken into consideration.

Easier Loan Approval: Women are perceived as steady payers of loans and are considered less risky in comparison to their male counterparts. Women tend to be more responsible in payment of their dues and thus get a preferred approval from banks when it comes to granting loans. A good credit score and sufficient property documents can quickly enable a woman to borrow money for purchasing a house. Therefore, if a woman is a primary applicant or joint applicant for a loan, there is a higher chance of getting the loan approved.

With the mentioned advantages, banking and government institutions have encouraged women in purchasing their residence. These proactive steps raised their social standing in the society and increase their participation in the financial matters.