Understanding the eligibility and benefits of a home loan for women in India

Women have long been celebrated for transforming a house of bricks and beams into a home of love, warmth, and dreams. While their emotional investment in a house has always been evident, their financial role was once limited. Today, that pattern is changing with more women stepping into home ownership, thanks to growing financial independence. Recognising this shift, many banks and Non-Banking Financial Companies (NBFCs) are offering home loans with exclusive offers for women, further empowering them. Let’s dive into these home loan benefits for women. 

Home loan benefits for ladies in India

1. You can avail of loans at comparatively lower interest rates

2. You are eligible for flexible terms with fewer formalities 

3. You can enjoy tax benefits

The interest rate on a home loan is an important consideration when availing of a loan as it determines your repayment obligations. A higher interest rate would mean higher Equated Monthly Instalments (EMIs) and increased stress due to financial obligations. Fortunately, many banks and NBFCs have a lower home loan interest rate for women. Although the comparative difference in the rate is minimal, it can lead to significant savings over a longer period of time, depending on your loan amount and tenure. 

Let’s take an example to illustrate how this might work.

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Picture this: Misha and her brother, Eklavya, both took a home loan of Rs 75 lakh for a tenure of 20 years. While Eklavya borrowed the money at an interest rate of 9.25%, Misha was entitled to a slightly lower rate of 9.20%. At first glance, the difference might seem insignificant. But here’s how housing loan for women at lower rates really works out: 

As you can see, Misha’s interest cost is about Rs 58,000 less than Eklavya’s, despite both borrowing the same amount for the same period. Thus, a home loan for ladies is a little cheaper than a home loan for their male counterparts. 

While a home loan is a common way to fund a dream house, it may not always be easily available for everyone. Lenders use strict eligibility criteria based on factors such as profession, income, and credit score to determine approval. Even if you are eligible for the loan, the approved amount may vary. However, women borrowers enjoy greater flexibility in these regards. This leniency applies even in the case of a joint loan where the co-borrower is a male. For instance, you and your partner decide to take a joint home loan worth Rs 80 lakh. Individually, your partner may only be eligible for a loan of up to Rs 50 lakh. Yet, your joint loan for a higher amount may get approved only because it also has a female applicant. 

Lenders offer flexible terms to women to encourage financial inclusion and also because they view women as reliable borrowers. The Income Tax (IT) Act of 1961, too, offers tax benefits on a home loan for women and men to make home ownership more affordable and boost the real estate sector. 

Here are the deductions available: 

• Section 80C allows saving tax on home loan principal repayments up to Rs 1.5 lakh per year.
• Section 24(b) allows claiming a tax deduction of up to Rs 2 lakh annually on the interest of a home loan taken for a self-occupied property.
• Section 80EEA allows additional tax deductions of up to Rs 1.5 lakh annually on interest paid, over and above the deductions available under Section 80C and Section 24(b). However, this benefit is only available to first buyers and is subject to certain conditions, which includes that the loan must be sanctioned between 1st April 2019 and 31st March 2022.

Note: If you take a joint home loan and co-own a property, both applicants can claim these deductions and enhance potential tax savings.

4. You can benefit from government schemes while taking a loan 

The Pradhan Mantri Awas Yojana (PMAY) aims to promote affordable housing, especially among women from the Economically Weaker Section (EWS), Low-Income Group (LIG) and Middle-Income Group (MIG) of society. The scheme makes it mandatory for women to be the sole or co-owner of the property. It also provides financial assistance in the form of subsidised interest rates on home loans, ultimately promoting homeownership among women. 

Note: While the EWS and LIG categories include households with an annual income of up to Rs 6 lakh, the MIG-I category comprises households with an annual income between Rs 6 lakh and 12 lakh. Households with an annual income ranging from Rs 12 lakh to Rs 18 lakh fall under the MIG-II category. 

Home loan eligibility criteria for women

The eligibility criteria for home loans for women vary across lenders. However, here are six common eligibility requirements to keep in mind: 

1. Age: The minimum age at the time of application must be 18 years. The maximum age can be different for salaried and self-employed women. For salaried women, it is usually between 58 and 60 years – the same as their retirement age. Self-employed women can have a regular income for a longer period. Hence, their upper age limit usually ranges from 65 to 70 years. 
2. Employment: There must be a regular source of income, whether through a salaried job, business or professional practice. 
3. Credit score: Credit score is an important eligibility criterion for availing of a loan because it directly reflects the borrower’s credibility. Lenders generally prefer a credit score above 750. 
4. Nationality:  Home Loans are available to Indian residents and, in most cases, to Non-Resident Indians as well. 
5. Monthly  income: The minimum income requirement not only varies across lenders but may also differ by city, loan amount, etc. For instance, it may be set at Rs 20,000 per month for applicants from Mumbai and Rs 15,000 per month for others. 
6. Work experience: A longer work experience with no gaps assures lenders of your repayment capability. Hence, they usually prefer 2-3 years of continuous employment or business experience. 

These requirements are general; for specific conditions, you must check with your lender before applying. 

Documents needed by female home applicants

The documentation requirement for women to apply for a home loan also varies across lenders. It typically includes the following: 

1. Proof of identity, such as a Permanent Account Number (PAN) card, Aadhaar card, passport, voter ID or driving license
2. Proof of address, such as an Aadhaar card, passport, recent utility bills, voter ID, driving license or ration card
3. Proof of income, such as salary slips for the last three months, IT returns for the past two years, bank statements, etc.  
4. Property documents, such as the sale deed, No Objection Certificate (NOC), occupancy certificate, etc. 

Note: Additional documents may be needed if you are availing of PMAY benefits.