Application for a home loan is a critical stage in the fulfilling the dream of owning a home. It involves quite a bit of paperwork and the applicant has to meet the statutory eligibility criterion and also be aware of various terms and conditions in order to avoid any unpleasant surprise in the future. Though the process of loan application, approval, and other related aspects remain same, it is believed that a woman applicant has certain advantages over her male counterparts while applying for a home loan. Women applicants have the benefits of getting concessions on home loan interest rates, lower stamp duty rates, higher chances of loan approval, and special schemes by banks and builders. Having said that, are there really no challenges faced by women applicant? Well, amidst these benefits, women do face challenges while applying for home loan. Let’s take a quick look at the challenges that women home loan applicants face while availing a loan and the alternate ways to handle the challenges.
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Need for a guarantor – Many banks offer low-interest rates if a woman is a sole applicant or the primary applicant in case of co-applicant for a home loan. Despite this benefit, banks demand either a co-applicant or a guarantor, especially for single woman applicants. It is understandable if banks refuse to give loans to non-working women or housewives because they do not have any source of income. But, refusal of loan for a working woman, simply because of her single status, is something to be refuted. When a woman is shelling out the entire money from her pocket, then what is the need of making someone a co-owner of the property? In such a scenario, schemes like low stamp duty rates, low-interest rates does not really stand any ground. Hence, banks and lenders must weave out practical solutions in the interest of women borrowers and in the interest of loan providers.
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Continuity of income – This is one of the biggest concerns of the home loan providers when it comes to offering home loan to women. It is observed that women take a career break when she gets into the knot of marriage or when she wants to extend her family. Paying heed to this, it is a genuine concern of the banks or lenders but there could always be other ways to handle such situations. Banks and lenders can show flexibility by giving the provision to add a co-borrower or a co-owner during such times, help find a buyer if the woman wants to sell the property, or decrease loan-to-value (LTV) ratio for women buyers. These steps could help retain the financial independence of women along with safeguarding the interest of banks and lenders.
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Women insurance – Due to financial unawareness, insurance for women is a quite rare in our country. And, this becomes a point of concern while availing home loan. The main objective of banks and lenders is to recover the loan amount in an unfortunate event – be it for male borrowers or female borrowers. But, as most male borrowers are aware and are covered by insurance, it becomes easy for them to address this concern. Hence, it is mandatory that every woman should be covered under term insurance plan to make it easier to avail home loan.
Well, as a conclusion, if banks and lenders have framed certain benefits for women home loan applicants, then, there should also be provisions to counter the challenges women face while applying for a loan. In light of women empowerment, it is much needed that lenders chalk out alternate ways to resolve concerns like the need for a guarantor and continuity of income.
