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According to the data shared in RBI’s publication Basic Statistical Returns, the total number of women borrowers have increased from 2.4 crore to 7.8 crore between March 2014 and March 2020. The steady surge in the number of women borrowers can be accredited to several factors like improvement in income and a desire to own a house to become more self-reliant.
- As per data, the average housing loan size for women is higher than men.
To further encourage women to apply for home loans, several lending institutions now extend home loans with exclusive offers. Regardless, to make the most of such perks, female home buyers must be familiar with the top 5 benefits of obtaining a home loan.
Top benefits of a housing loan for women
Women home loan borrowers tend to enjoy the following perks –
- Simpler eligibility criteria
Several reports indicate that the delinquency rate of female housing finance borrowers is lower by 15 basis points than males. It is often considered to be one of the reasons why most lenders lay down simpler qualifying criteria for female borrowers. Leading financial institutions require women applicants to meet these home loan eligibility criteria to qualify for a loan –
- Resident Indian
- Aged between 23 years and 58 years
- A working professional with a minimum of 3-year experience
Women who are planning to borrow a housing credit can calculate home loan eligibility online to determine the amount they are likely to receive.
- Lower interest and stamp duty charges
Some leading HFCs offer special interest rates to female home loan borrowers to encourage them to become property owners. Generally, such HFCs provide women borrowers with a 0.05% to 0.1% subsidised home loan interest rate. This facilitates savings and makes the overall cost of borrowing more affordable.
Suppose two individuals, one male and another female, apply for a home loan online of Rs.50 lakh for 15 years. While the male borrowers avail the loan at the rate of, say, 7.2%, the female borrower gets the same for 7.1%. Though the difference seems minute at a glance, on using a home loan EMI calculator, the result could be quite striking.
Note that some state governments charge 1%-2% lower stamp duty in case of female owners. Thus, it facilitates more savings and makes the overall home loan process of borrowing worthwhile.Â
- Flexible repayment tenor
While regular home loans come with a repayment tenor of up to 20 years, the housing loan tenor for women extends up to 25 years. This allows them to select a repayment schedule that matches their debt clearing capability more conveniently.
While a longer tenor provides ample time to repay debt without straining finances, it accumulates a higher interest burden. On the other hand, a shorter tenor attracts a high EMI but helps borrowers save significantly on the interest outflow.
For instance, if an individual takes a loan of Rs.20 lakh for 15 years at an interest rate of 7.1%, she would pay an interest of Rs.1255870 and an EMI of Rs.18089. However, if she selects a tenor of 20 years, her interest outflow would be Rs.1750370, and EMI would be Rs.15626.
- Tax benefits
Home loan borrowers are also entitled to enjoy tax benefits per the Income Tax, 1961. Under Section 80C, individuals can claim deductions of up to Rs.1.5 lakh each year. Under Section 24(b), they are allowed to claim deductions on home loan interest of up to Rs.2 lakh every year.
On top of this, under Section 80EEA, first-time buyers are entitled to claim an additional Rs.1.5 lakh on their loan interest. However, they have to meet a few conditions to claiming the same under this clause. Collectively, these tax benefits make the home loan affordable for women borrowers. They can double their tax benefits with a co-applicant for a joint housing loan with their spouse.
- Preference in housing schemes
Leading financial institutions prefer female borrowers who apply for credit-linked subsidy schemes like Pradhan Mantri Awas Yojana for a home loan. Moreover, female borrowers can make the most of such above-discussed benefits when they apply for a home loan at a financial institution that extends home loans at competitive rates.
Usually, leading financial institutions also provide pre-approved offers that make the borrowing experience more streamlined. Such lucrative offers can be availed on financial products like home loans and loans against property. You can check your pre-approved offer in three steps by just entering your name and contact number.
Hence, women home buyers can benefit in these ways and meet their housing requirements without any difficulty. Nonetheless, before one decides to apply for a home loan, it is important to compare the leading HFCs and their terms and conditions.
Buying a home is one of the biggest aspirations for Indians. The reasons are many. For some, it is having a home to call their own, or the sense of security it provides. For others, it is a ticket to an early retirement. It could also be a sense of accomplishment and a boost to one’s self-esteem. Or it could be simply an investment for the future.
