Benefits of a Home Loan for Women Homeowners

In recent years, an increasing number of women have become an integral part of the process when making home purchase decisions. 

Coupled with financial independence, they have been contributing equally to home loan repayments, whether as single/main applicants or as co-applicants. 

They have a distinct edge while negotiating favorable terms, the rate of interest, and processing fees with banks and lenders. Home loans, especially, aimed at female house owners are a huge cost-saving opportunity and hold numerous advantages.

Home Loan Benefits for Women Home Buyers

There are several benefits attached to a home loan if it is availed by a woman. Here are some of its merits:

1. Higher loan eligibility - If earning women apply for a home loan with their spouses as co-applicants, their combined income increases the home loan eligibility. This offers them more flexibility in choosing properties and they can even opt for a bigger house.

2. Longer repayment tenor - Home loans for women are offered for a longer tenor. This, automatically, lowers the EMI and helps them make the repayments comfortably. 

Additionally, they can meet all their commitments and regular expenses without feeling the burden of the monthly EMIs, utility bills, credit card bills, etc. 

They also benefit from making foreclosures and part payments on their loans without incurring any penalty or other charges.

3. Lower interest rates - Many financial institutions have low-interest loans for women applicants. A lower rate of interest impacts the EMIs significantly and you can also use Home Loan EMI Calculator for calculating your monthly EMI which helps to make bigger savings over the entire loan tenor.

4. Income tax benefit - If the husband and wife jointly apply for a home loan, they can enjoy more tax deductions on the loan repayment of the principal and the interest amount. 

Individually, each can claim a maximum rebate of Rs.1.5 lakh on the principal (under Section 80 C) and Rs.2 lakh on the interest (under Section 24) components of the EMI. 

Together, they can avail of combined tax benefits of Rs.3 lakh on the principal and Rs.4 lakh on the interest of their home loan. This amounts to significant tax benefits.

However, the actual tax benefit enjoyed by each co-applicant is in proportion to their contribution in repayment of the principal and the interest, subject to the mentioned limits.

5. Lower stamp duty - To encourage female home buyers, many state governments charge 1-2% lower stamp duty from women property owners. 

This enables them to save a considerable sum on their home expenses. So, if a borrower opts for a house worth Rs.80 lakh, she could easily save Rs.80,000 to Rs.1,60,000 in stamp duty exemptions.

6. Better chances of home loan approval - Market trends indicate women have better savings potential as compared to men. They avoid unnecessary debts, make sound financial decisions, and have lower default rates. 

All these factors establish them as more responsible borrowers. Lenders, therefore, are more inclined to offer home loans to female borrowers with attractive loan terms and specialized schemes.

7. Pradhan Mantri Awas Yojana (PMAY) - Under PMAY, house owners belonging to EWS, LIG or MIG sections of the society can claim government subsidies up to Rs 2.67 lakh on the principal amount of their home loan. 

The subsidy amount is given upfront on the principal outstanding, thereby lowering the interest component. It is, however, mandatory for a woman to be either the sole or joint owner of the property and preference is given to female applicants, especially, widows and single women.

Eligibility Criteria for Women Home Loan Borrowers

Like any other home loan applicant, female loan applicants must meet the eligibility requirements laid down by the lender. Both salaried and self-employed women can apply for a home loan. The eligibility criteria include:

• The applicant should be a residing citizen of India.
• In the case of a salaried woman, she must be between 23 to 62 years of age, while self-employed ladies should be between the ages of 25 to 70 years.
• She must have a minimum work experience of at least 3 years if she is salaried. And, self-employed women should have a business continuity of at least 5 years.
• She should have a credit score of 650 and above.

Interested applicants can, further, check their exact home loan eligibility by using a home loan eligibility calculator online.

Documents Required for Home Loans for Women

The documents necessary for a home loan may differ with each lender. But, the common set of documents that are, usually, required can be summed up as follows:

• Proof of identity - PAN card, Aadhar card, Voter ID, valid passport, driving license, etc.
• Proof of residence - Aadhar card, ration card, copy of utility bills like telephone bill, water bill, electricity bill, and so on.
• Proof of income - Latest salary slips and Form 16 (salaried applicants), P&L statements, TR documents, proof of business (self-employed applicants).
• Other documents - Passport size photographs, duly filled form, and bank statements.

This list is indicative and borrowers may have to furnish other documents, as and when required.

Summing Up

The benefits of a home loan extended to women save on costs associated with buying a house and expedite the entire loan approval process. They also reduce the burden of EMIs. With favorable government laws and the support of financial institutions, women can enjoy homeownership even more easily.