From the PMAY (Pradhan Mantri Awas Yojana) housing schemes to a slew of other advantages, women borrowers for home loans get several advantages in the country. If you are a female borrower, you will naturally depend on a home loan for buying your dream home which can be repaid over a duration of anywhere between 20 and 30 years at the most. Since the duration of a home loan is longer, the final cost of the loan may turn out to be quite high. However, this may slightly reduce in case of women borrowers. Here are the major benefits for women who take out home loans in India.
Major advantages for female home loan borrowers
There are various benefits that female home loan borrowers should be aware of. These include the following:
Lower rates of interest on home loans
The rate of interest is a vital factor for enabling easier purchases of comparatively pocket-friendly homes. Home loans usually involve bigger amounts for longer periods of time and if the rate of interest is on the higher side, then it will definitely impact your budget. A slight change in interest rates may lead to lower interest outgo considerably over a 20-30 year period. This will also help you get a lower monthly installment amount to be repaid. Women borrowers will get 0.05% concessions on interest rates from most Indian banks. The savings will usually equate to a handsome amount. Lenders also believe that women are safer and more reliable as loan applicants and may offer special home loan interest rates for encouraging you to own property and other assets. The rates are usually a few points lower than the prevailing market rate for interest on home loans. This makes it easier to avail of a loan and repay the same without straining your pocket. Home loan interest rates may sometimes be lower by 0.1% for women borrowers as well.
Stamp duty benefits
Stamp duty is a major chunk that goes into the cost of any property. A difference of some percentage points will naturally make a major impact on the overall cost of homeownership at your end. Financial institutions or lenders usually finance loans at roughly 80-90% of the cost of the property and in terms of stamp duty, it may vary from one Indian State to another. Stamp duty is lower for female buyers and concession of 1-2% is usually offered in such cases. This is applicable across most State Governments and the amount saved is considerable, to say the least.
One of the major tax benefits available on your home loan is the deduction on principal repayments up to Rs. 1.5 lakh under Section 80C that you can easily avail. You can also avail of deductions up to Rs. 2 lakh on interest repayment under Section 24 for your home loan. The eligibility for the home loan tax benefits is the same as male home loan customers as well. Women co-applicants who are also co-owners of the property in question will get the same tax benefits as their spouses. You should, however, opt for a home loan where the rate of interest is lower and since rates are mostly lower for women borrowers, the overall tax deductions will benefit you more.
Higher amounts available with lower criteria
Women can access higher loan amounts ranging between Rs. 30 lakh and Rs. 3.5 crore for purchasing homes of their choice with lenders often increasing their eligibility list or sanctions for drawing more female borrowers. Simpler eligibility criteria which are not always so stringent will make applying for a higher loan amount easier for women borrowers. This is a major benefit for sure.
Longer tenures for repayment of the home loan
Women can often benefit from longer tenures of repayment in case of their home loans. They may avail tenures up to 25 or even 30 years in some cases. Naturally, this eases the monthly EMI repayments, helping women repay the loan in smaller installments every month. This takes off the pressure on the borrower’s finances, enabling the deployment of surplus income in investments and meeting all other household expenditures while maintaining the home loan at the same time. With no charges on part prepayments at major banks and zero foreclosure charges on most home loans for women as well, you can use your bonuses and other surplus money to good use as well.
PMAY and other benefits
Finding a place in the Pradhan Mantri Awas Yojana list will also benefit women. This housing scheme makes it compulsory for women to be co-owners of the property, providing interest subsidies going up to Rs. 2.67 lakh. Women applicants are given preference in PMAY, leading to an increase of 6% for women who are applying for home loans in the country as per reports.
Women should be aware of the specific benefits that they are eligible for when it comes to applying for and obtaining a home loan. It is now increasingly possible to obtain a comparatively affordable home loan with greater savings and a shift towards future security and financial independence as well. The only thing that you should keep in mind is that your CIBIL or credit score should be high and you should have a demonstrated repayment/credit history of timely repayments without any lapses. Also, make sure that you have a stable source of income and apply for an amount that you can afford to repay.