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Call it a move towards women empowerment or term it as benefits for less risky borrowers; the fact is women enjoy a handful of crucial benefits pertaining to home loans, as compared to their male counterparts. Yes, you read that right. Some banks and non-banking financial companies offer benefits like low home loan interest rates, higher chances of loan approval, and women special schemes. Many states also provide lower stamp duty rates for women property buyers. In addition, builders and developers also offer time bound special schemes to encourage women folk to buy properties.
Interest rate of home loans is one of the major considerations while availing a loan. It decides the total repayment amount at the end of the loan tenure and also affects the monthly pay-out in the form of EMIs. Even a slight variation in the rate of interest can make a huge difference on the repayment amount. As home loans are a long-term financial commitment, low-interest rates are always an advantage. Hence, in this regard, women are more beneficial than male home loan applicants. Though the rate of interest varies from bank to bank, in general, it is observed that banks offer women home loan applicants at least a minimum of 5 bps lower than the normal home loan rate. For example, if the normal home loan rate is 8.60%, then the home loan rate for women applicants will be 8.55%. The difference may appear minimal, but it saves a considerable amount of money on the whole.
The provision of the low rate of interest for a home loan can be availed only if the woman is the sole applicant or she is the primary applicant in the case of being a co-applicant. Also, the property for which the loan application has been filed should be either in the sole name of the woman applicant or she should be the primary owner in case of joint ownership of the property. In the instance where these mandatory criterions are not met, the women will not be eligible to avail any concession on the home loan interest rate. For example, in the case of a husband-wife applying for a home loan jointly, the wife has to be the primary applicant to avail the benefit of low-interest rate. In case they apply for a home loan with the husband being the primary applicant, they will not qualify to avail the stated benefit. The same reasoning applies in the case of ownership of the property for which the home loan is being sought.
Generally, government banks and financial institutions offer better home loan rates when compared to private banks and financial institutions. A comparative analysis shows that the interest rate offered by government financial institutions range from 8.50% to 8.65%; whereas the interest rate offered by private financial institutions range from 8.65% to 10.05%. However, private financial institutions like Tata Capital Finance Limited offer quite competitive and attractive home loan rates for women at 8.65%. So, as we see that there is certainly a variation in the home loan rates, there is also a possibility of variations related to other terms and conditions. Thus, it is always recommended to do a thorough market research before applying for a home loan. After all, even a minimal difference in interest rate can make a huge difference to your loan repayment amount.
In conclusion, to make the most of the available benefit of low home loan interest rates, women applicants must have a thorough know-how of updated home loan rates – normal and women-specific, of various banks and non-banking finance companies, along with related terms and conditions.