Benefits for Women Borrowers: When Savita Devi from East Delhi first reached the OneNDF office, she didn’t know she would get benefits on a home loan for the simple reason that she was a woman. OneNDF – a leading digital loan marketplace; has helped several like Savita Devi in identifying problems with their home loan applications and offering financial solutions to help them get the best deal.
“I was very much worried about the rising interest rates and monthly EMI payments when I first thought of applying for a home loan. However, timely intervention by OneNDF reduced my financial burden to a great extent. With their help, I found banks offering the lowest rates of interest on home loans along with other benefits like tax benefits and lower stamp duty. The total cost of buying a home has reduced significantly for me because of the right guidance I received from OneNDF,” said Savita Devi.
If you are thinking of taking a home loan, do consider taking it in your wife’s name as this will save you from paying high interest rates till the time you repay the loan amount. To put it simply, several banks and financial institutions in India offer a discount of up to 1% on home loan interest rates if the said loan is taken under a woman’s name.
Banks usually keep their home loan interest rate low for women borrowers compared to their male counterparts. The reduced interest rate makes a huge impact on Equated Monthly Instalments (EMIs) and provides significant savings over the longer tenure of the home loan.
It is worth mentioning that the government and several banks in India offer benefits on home loans such as home loan interest rates, tax deductions on home loan interest, and principal repayment to women borrowers in an effort to encourage women’s homeownership. Meanwhile, women have higher chances of loan approval by banks.
Since women generally have a better track record of repaying their loans, banks encourage them to invest in assets such as property and purchase new homes. In this article, we will discuss other benefits that women are eligible to get on home loans.
6 Benefits for Women Borrowers taking Home loan
1.Lower Interest Rates:
Several banks and mortgage lenders offer women applicants lower interest rates on home loans. This reduces the burden of Equated Monthly Instalment (EMI) payments significantly bringing down the total cost to be paid during the loan’s tenure.
Some banks that offer concessions on home loan rates to women applicants are SBI, HDFC, Canara Bank, and Union Bank of India. Banks usually offer a discount of up to 1% on home loans availed by women borrowers. However, one should note that different banks offer different discounts on the rate of interest applicable on home loans taken under a woman’s name.
For instance, India’s largest private sector lender HDFC Bank offers a concession of 0.05% to women home loan applicants. Thus, the discount offered by financial institutions varies from one bank to another. It is therefore recommended to check the official websites of their preferred bank to know the discount offered by them on home loans to female borrowers.
State Bank of India (SBI)
SBI offers women home loan borrowers a concession of 5 basis points, as per its website.
HDFC
HDFC Bank offers female borrowers a 5 basis points discount on home loans.
Canara Bank and Union Bank of India
Both, Union Bank of India and Canara Bank offer a concession of 5 basis points for women borrowers.
2.Lower Stamp Duty
Stamp duty is an extra cost that increases the price of the property. There are some states in India that offer a 1% to 2% discount on stamp duty to women in an effort to encourage them to buy property.
Different states have different stamp duty rates in India. In national capital Delhi, the stamp duty rate for a women homebuyer is 4%, whereas, for a male homebuyer, this rate is 6% of the property value. The latest rate of stamp duty in Jharkhand is 4% for both men and women. However, earlier a female homebuyer in the states paid only a symbolic Rs 1 as stamp duty. In Maharashtra, Punjab, Uttarakhand and Odisha the stamp duty rate for a women homebuyer is 5%, 6%, 3.75%, and 4% respectively.
3.Easy Access To High Loan Amount:
With simple eligibility criteria, women can get access to high loan amounts ranging from Rs 30 Lakh to Rs 10.50 crore to buy a home. Besides, the simple eligibility criteria makes it easier for women to apply for home loans.
4.Longer Repayment Tenors:
Women also enjoy the benefit of longer repayment tenors of up to 40 years when applying for a home loan. This reduces financial pressure on women by lowering their EMI payments.
Besides, a female borrower does not have to pay charges levied on making pre-payments and foreclosing their loan.
Suggested Read: 10 Things you should Consider Before Applying For Home Loan?
5.Tax Benefits:
A woman who has availed a home loan is also eligible to get tax benefits. For a self-occupied home, female borrowers can get tax benefits of up to Rs 1.5 lakh and Rs 2 lakh on principal amount and interest repayment. However, one should always remember that these tax deductions are subject to the provisions of the Income Tax Act and can change based on annual budget announcements.
6.Benefits under PMAY:
Women home seekers can also get benefits under the central government-sponsored scheme Pradhan Mantri Awas Yojana (PMAY) as the scheme offers an interest subsidy of Rs 2.67 lakh. The PMAY makes female co-ownership mandatory for the female head of the family. When it comes to the Economically Weaker Section (EWS) and Low Income Group (LIG) category, the PMAY scheme preference is extended to widows as well as single women.
To meet the PMAY eligibility criteria, your household income must fall under one of the below-mentioned brackets:
- Economically Weaker Section- Annual household income of less than Rs 3 lakh.
- Lower Income Group: Annual household income between Rs 3 lakh and Rs 6 lakh.
- Middle Income Group I – Annual household income above Rs 6 lakh and under Rs 12 lakh.
- Middle Income group II- Annual household income above Rs 12 lakh and less than Rs 18 lakh.
Notably, the eligibility for the interest subsidy under PMAY depends on the income category of the applicant (EWS, LIG, MIG I, MIG II).
Besides, more women applicants are favored in this scheme compared to their male counterparts. The initiative is aimed at ensuring the financial independence of women and making them economically more empowered.
The Pradhan Mantri Awas Yojana is a central government-sponsored credit-linked subsidy scheme (CLSS) designed to facilitate access to affordable housing for the low and moderate-income residents of the country.
Woman applicants can make the most of the PMAY scheme as they can avail of concessions on interest when applying for a home loan under this CLSS.
Things To Consider Before You Purchase A Property In Your Wife’s Name
Some of the important things you should not ignore while buying a property in the name of your wife include:
- Your wife can claim the home loan tax benefits only if her source of income is genuine
- In case of joint ownership, both husband and wife can claim a tax rebate on their home loan, subject to the fulfillment of conditions under the Income Tax Act.
- In case there is a legal dispute over the property, you along with your wife will have to be available for legal proceedings, both of you will be involved in the case
- In case you and your wife decide to part ways and take divorce, the property will be divided as per the ownership share you two decided upon beforehand, even if the entire monetary contribution was made by you at the time of buying the home.
Disclaimer: The information provided in the article is for general informational purposes only and readers are advised to do their own research and consult their financial advisors or legal experts before making any financial decision.
