Highlights:
- How Can Women Benefit from a Home Loan?
- Why Should Women Opt for Home Loans?
Property prices have sky-rocketed over the recent past and it is now nearly impossible for any middle-class person to afford a home without the help of a Home Loan. Home Loans are a type of secured loan under which the property bought with the loan money serves as collateral. The lender sanctions up to 90%* of a property’s value as a loan. However, the lender can also sell the property for loan recovery in case the borrower defaults on loan payment. Compared to the interest charged on other loan offerings, the Home Loan interest rates are always on the lower side, which makes these loans one of the most cost-effective ways of owning a home. Further, these loans come with several Home Loan tax benefits, which allow borrowers to save a lot of money in the long run.
These days, more and more women have been investing in real estate and the government of India is also doing everything to encourage women home-ownership. In this article, we look at Home Loan benefits for women.
How Can Women Benefit from a Home Loan?
1. Low Home Loan Interest Rates
When it comes to Home Loans, the interest rate is crucial as it determines how easy or difficult it will be for you to repay your loan. A high rate of interest on your Home Loan will increase your EMIs as well as the total interest you must pay your lender. Low Home Loan interest rates help one keep EMIs on the affordable side. Further, they also help borrowers reduce the overall cost of borrowing the loan. One of the biggest Home Loan benefits for women is that they get offered lower interest rates. In general, most well-recognized lenders give women borrowers a 5-basis point lower interest rate than the interest rate they offer to men.
2. Rebate in Stamp Duty Charges
Whenever a homebuyer purchases a home, they must pay a legal tax to the state. This legal tax is known as the Stamp Duty and it varies from state to state. The stamp duty certificate serves as proof that the transaction took place and therefore, serves as proof of purchase in case of a legal dispute. It is, therefore, an important document that all homeowners must possess. The stamp duty can be claimed as a deduction on Home Loan. Women homebuyers cannot only claim deduction on Home Loan, but every state also asks women homeowners to pay a lower stamp duty than men.
3. Simple Housing Loans Eligibility Criteria
When it comes to housing loans, only those borrowers who meet their lender’s eligibility criteria get approved for a loan. Lenders check a borrower’s eligibility for a loan to minimize chances of loan default. Though most lenders have very basic loan eligibility requirements, some lenders are detailed and ask for a variety of documents to ascertain a borrower’s repayment capacity. This makes getting approved for housing loans trickier and also increases the total loan approval and disbursal time. Lenders are generally not so strict about women homebuyers meeting all their eligibility requirements, which makes it easier for women to get approved for a loan. For instance, if you are a working woman and want to qualify under Bajaj Housing Finance’s Eligibility criteria for Home Loan for Women, you must be an Indian citizen between the ages of 23 and 62 with 3 years of work experience.
4. PMAY Has Made Female Co-Ownership Mandatory
The PMAY or the Pradhan Mantri Awas Yojana was launched in 2015 and it aims to make housing affordable to all. It does so by offering interest subsidy on Home Loans to those belonging to the economically-challenged sections of the society. However, to be able to avail of the benefits of PMAY, the borrower must meet certain criteria and one of it is that to be eligible for a PMAY subsidy under EWS and LIG categories, the borrower must co-own the home with a female member of the family. Thus, when a borrower buys a home with a female member of the family and adds their name to the Home Loan, they become eligible for better Home Loan deductions.
5. Flexible and Longer Repayment Tenor
When it comes to Home Loans, the repayment tenor is crucial. A short tenor will allow you to become debt-free quickly and allow you to save on the total interest outgo. However, a short loan tenor leads to high EMIs, which makes repayment difficult. A long tenor, on the other hand, helps one keep their EMIs on the lower side but it also increases the total cost of borrowing the loan. In general, borrowers should try to opt for a tenor that allows them to become debt-free quickly while still keeping their EMIs on the affordable side. Many lenders offer a longer and more flexible repayment tenor to borrowers, which makes repayment further easier.
Why Should Women Opt for Home Loans?
Now that we understand the benefits that women get on Home Loans, let us look at the benefits of Home Loans and why women should opt for this financing tool.
- Home Loans are the cheapest of all loans. Home Loan interest rates are low, which makes it possible for the homebuyers to afford their dream home without feeling too burdened.
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Housing loans come with a long repayment tenor. Borrowers can choose to repay their loan over a period extending up to 30 years. The long repayment tenor involved makes it quite easy for the borrower to repay the loan.
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Using this financing tool, borrowers can get access to a high loan sanction. Lenders easily sanction up to 80%* of a property’s value as a loan. This higher loan sanction makes it possible for borrowers to afford the home they have always wanted to buy.
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Home Loans also offer several Home Loan tax benefits using which borrowers can save up to Rs.3.5 Lakh in taxes each year. Under Section 80C, one can claim tax deductions up to a maximum of Rs.1.5 Lakh and under Section 24(b) of the Income Tax Act, one can claim deductions up to a maximum of Rs.2 Lakh. Thus, housing loans help borrowers save a lot of money in the long run.
Home Loans are an excellent way to save money. However, since these are secured loans, they must be taken after proper planning since not paying the loan EMIs on time can lead to a homeowner losing ownership of their property.
*Terms and conditions apply.
