Home Loan Benefits for Women in India
With steady increase in women’s employment in India, their involvement in making their household’s financial decisions is also increasing. In an effort to encourage homeownership among women, banks and NBFCs are also offering additional benefits on their home loan products like preferential interest rates, customised schemes, etc. Moreover, the number of women in home co-ownership is also increasing as adding women as co-applicant increases home loan affordability.
In this article, we will learn about the benefits that women in India can avail when they apply for home loan.
Preferential Interest Rates
With women having a better track record of repaying their loans, banks encourage women to invest in properties and to buy new homes. To take it ahead, many banks and HFCs offer interest concession of 0.05% to 1% on home loan interest rates. The interest concession might appear to be negligible, but given the large size and long repayment tenure (usually up to 30 years) of home loan, it significantly reduces the overall interest cost. Moreover, the savings made on the total interest payout can be either invested or used for meeting other financial requirements.
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An example illustrating the total amount women can expect to save on preferential home loan rates.
|Particulars||Woman Borrowers||Other Borrowers|
|Loan Amount||Rs. 80 lakh||Rs. 80 lakh|
|Home Loan Interest Rate||7.30%||7.35%|
|Loan Tenure||20 years||20 years|
|Monthly Instalment (EMI)||Rs. 63,473||Rs. 63,716|
|Total Interest Amount||Rs. 72,33,438||Rs. 72,91,766|
|Total Amount Payable||Rs. 1,52,33,438||Rs. 1,52,91,766|
|Savings on Interest Cost||Rs. 58,328|
As per the above example, the total amount saved by women home loan borrowers over other applicants is Rs. 58,328. Women can use this amount for their personal use or invest in Mutual Funds.
List of Banks and HFCs offering preferential home loan interest rates to women borrowers include HDFC, Union Bank of India, State Bank of India, Indian Bank, Punjab and Sind Bank, Central Bank of India and Bank of India. As the interest rates offered to home loan applicants can widely differ due to the differing credit risk assessment process followed by the lenders, female home loan applicants should compare the home loan offers from as many lenders as possible to avail the best home loan offer available on their credit score, monthly income, job profile, etc.
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Home Loan Tax Benefits
Irrespective of the gender, the government offers home loan tax benefits of up to Rs. 3.5 lakh under Income Tax Act, 1961. Under Section 80C of the Income Tax Act, women can claim tax deduction of up to Rs. 1.5 lakh on home loan repayment. And under Section 24(b) of the Income Tax Act, women can claim tax deduction of up to Rs. 2 lakh on home loan interest. These tax benefits become double when women apply for home loans jointly with their spouses or other blood relatives. However, the couple should ensure that both are co-owners of the property.
Getting a home loan requires long-term planning and comparison of interest rates, features and other benefits. Always check home loan eligibility to know the amount you qualify for and ways to improve the home loan eligibility. You can also use Paisabazaar home loan EMI calculator to calculate your home loan EMI and the total interest cost against different loan amounts, interest rates and loan tenures. Doing so will not only help you evaluate your home loan affordability but will also help you manage your taxes well in advance.