How Can Home Loan Finance Options Assist Female Homebuyers?

Finance Feb 4, 2025 4 Add to Reading List

Buying a house is a significant milestone in anyone's life, and for many women in India, it carries an even deeper sense of accomplishment and independence. It is a sign of self-determination and individuality. The last few years have seen the accessibility of home loans for women that are custom-made for them.

This article discusses how these loans assist the female population in realising their dream of owning a house while putting the information in the simplest way possible.

Why Focus on Female Homebuyers?

Government and financial institutions in India are encouraging women to invest in properties. Women owning property offers family stability and reduces socioeconomic inequalities, which are prevalent in a developing country like India. Several banks and NBFCs provide incentives meant exclusively for female borrowers, making it possible for them to acquire homes at much lower costs.

Benefits to Women Homebuyers of Home Loan Finance

Home loan finance options come with special benefits for women, such as:

1. Low Interest Rates

Mostly, female home buyers can access home loans at reduced interest rates. This difference might be up to .05% to .1% less than what is quoted on standard rates.
For example, an individual can save more than Rs. 1 lakh throughout 20 years by cancelling just .1% interest on her Rs. 50 lakh loan.

2. Higher Loan Eligibility

Tools like a loan amount eligibility calculator empower women to estimate their loan eligibility.
In many cases, the loan amount one can qualify for by adding another person’s earnings, like their spouse’s income.

3. Tax Benefits

Under Section 80C of the Income Tax Act of India, women home buyers are eligible for tax deductions on principal repayment up to Rs. 1.5 lakh annually.
Deductions can also be claimed from interest paid under Section 24(b) amounting to Rs. 2 lakh annually.

4. Subsidies under Government Schemes

Schemes like Pradhan Mantri Awas Yojana (PMAY) are introduced to help women buy a home.
Those eligible to take loans through this scheme may receive a subsidy of up to Rs. 2.67 lakh specifically for them.

Common Eligibility Criteria for Women Applying for Loans

All these benefits are only available to women who meet certain eligibility prerequisites determined by banking institutions and non-bank companies. While the exact criteria may differ slightly, some of the general ones include:

Age Bracket: 18 to 65 years.
Income Stream: Earnings coming from regular employment or business activities.
Ownership of Property: Required for certain types of loans, such as home loans or loans against property. The property must be owned either solely by the applicant or jointly with a co-applicant.

Most banks advocate joint applications to enhance credit risk management.

Using a Loan Amount Eligibility Calculator

A home loan amount eligibility calculator is a tool that helps buyers estimate the loan amount they may qualify for based on income, age, and other factors. It facilitates planning and enables women to have realistic goals for their home buying.

Enter your income details, such as monthly earnings, current liabilities, if any, and loan tenure.
The calculator will display the maximum loan amount you are eligible to receive from the financial institution for this period.
This way, they can determine their budget limits, including the EMI amount they can comfortably afford, based on prevailing interest rates across different banks at various times, i.e. if one is earning Rs. 50,000 per month without existing liabilities, one may borrow Rs. 35 to 40 lakh, approximately depending on the rate and duration.

Challenges Facing Women When It Comes to Applying For Home Loans

Despite the listed benefits, inadequate income, absence of credit history, and other such factors may pose some difficulties. They could deal with such issues by undertaking the following:

Improve Your Credit Score: Aim at having a CIBIL credit score above 700 by meeting all existing confirmation repayments on time.
Get a Co-Applicant: You can have your spouse or parent sign as a co-applicant to enhance your eligibility for home loan finance.
Consider Longer Terms: Spreading repayments throughout extended periods can reduce monthly constraints associated with loan repayments.

Tips For Female Home Buyers

Below are some quick tips on how you should go about it when buying a house:

Search For Loan Offers: Compare interest rates and processing charges from various lending institutions.
Make Sure You Understand the Details: You need to read through your loan agreement before signing anything.
Determine Loan Qualification: Use home loan eligibility calculators to check if you qualify for the loan or not.

Wrapping Up

Women have been historically marginalized groups. Loans offered under home loan finance schemes have revolutionized how women today own a house, especially in India. Through reduced interest rates, tax incentives, as well as government support systems, it is easier for women to acquire homes of their own.

Moreover, tools like online loan amount eligibility calculators can help you weigh your options carefully and check your qualifications before deciding on a loan. So, consider taking advantage of such opportunities regardless of the housing market situation, thus giving yourself a chance to buy that dream home, which, otherwise, might have been a Herculean task.