Single Women Home Loans: A lot of Problems

Many banks insist on a single woman bringing in a co-applicant for a housing loan.

The probability of a bank insisting on a single woman being asked to bring in a co-applicant is a lot higher than a married one, especially if it is a housing loan.

The lenders include ICICI Bank, Axis Bank, Indiabulls Home Finance, and Dewan Housing Finance (DHFL). Women complained of difficulties in getting a home loan, and checks on banks showed that the practice is prevalent.

 Some banks said they would not be able to process the application without a co-applicant. 

“We do not give home loans to single women borrowers unless they have a co-applicant,“ said a officer from a private  bank.

“There is no RBI norm, but this is an internal credit check that we follow based on our data analytics where we have noticed that the default rate among single women is high.“

Most lenders may not explicitly say that a co - applicant is necessary, but could disguise it saying that it is essential to have a guarantor for loans.

"This mentality comes from the fact that women can't get good employment options and those who do would not be able to sustain the employment,“ says Ms. Vijayalakshmi Rao, Mentor & advisor, Association for Non Traditional Employment for Women. But what exposes the double-standards is that hardly any working male applicant is asked for such guarantors when the property is mortgaged.

 

“We do not ask for a co-applicant,“ said Mr. Rajesh Makkar, CEO, DHFL. “We request for a guarantor to ensure that there is a contact when the borrower is not contactable. This only helps the institution in case of a default.“

Credit information bureaus like CIBIL which generate credit scores on individual loan applicants do not prepare data on single women separately. Their scores are based on their past performance in terms of repayment of loans.

“We do not generate any report based on the gender,“ says Harshala Chandorkar, senior VP, Consumer Relations, CIBIL, a credit information bureau. “If at all there is anything, it may be done at the bank level.“

Several  banks and housing finance companies  (HFCs) sell housing loan and other products to women by giving them an interest rate benefit. However, their staff are not equipped and trained to handle queries by single women.

“Many banks and financial institutions have a policy insisting that a single woman borrower having a co-applicant is to secure the loan,“ says a third party sales agent of a private sector bank.

“Though the flat is mortgaged with the lender they do not want to face the hassles of repossession. They prefer a co-applicant from whom they can recover.“

Src: ET

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