Benefits of Getting a Joint Home Loan

Most of us buy just one home or residential property in our lifetime, and even that with a loan. Buying a residential property for yourself, or in other words buying a home, is a one-in-lifetime investment. It is quite natural that we would look for a dream home, or in other words the perfect home for ourselves and our loved ones. The size of the property, the quality and location of it depends on how much money you have, or how much you can afford. Your affordability depends on your income, which in turn depends on a host of factors like age, income level, amongst others. It also depends on your current loans and on your ability to repay. 

To stop people from taking undue risks, lenders have norms in place which stop you from your EMIs to be more than a certain part of your take-home income. For instance, if your take-home pay is Rs. 40000, your total EMIs over all your loans can’t be more than Rs. 20000-25000. If that is what you are already paying, and on top of that you want a new loan, you are likely to get declined.

How to make your chances of getting a home loan better?

The best way is to add co-applicants to the loan application. When you can co-applicants, the lender is more likely to approve because it gives them more security. This is because in case you as the primary applicant is not able to repay, the co-applicant can and will have to repay the loan. Thus even for the applicants’ point of view, the risk is divided. 

Who can be a co-applicant?

Ideally, co-applicants are family members. As for eligibility, they can be salaried, self-employed and even NRIs.

Benefits of taking a joint home loan

There are two main benefits of taking a joint home loan.

1. Higher loan eligibility: Alone, as the only single applicant, you may find it hard to get the loan. But together with a co-applicant, your loan application is stronger. Thus, you have more eligibility. With a co-applicant, you can ask for longer or shorter loan repayment terms, lower interest rates, more loan amount, and even custom loans.
   

2. More tax benefits: When you jointly apply for a home loan, you get more tax deductions separately. However, you both need to be co-owners of the concerned property in this case, and you both need to be contributing towards repaying the loan. The Principal repayment is eligible for deduction under Income Tax Act’s Section 80C till a maximum of Rs. 2 lakhs. Interest payments can have tax deductions till Rs. 2 lakhs under Section 24. When the property is let out, the interest in its entirety is eligible for tax deduction. The actual tax benefits you as a co-applicant depends on your repayment contribution.  

3. Special interest rates for women co-applicants: As an additional benefit, women co-applicants can enjoy lower interest rates.