With the real estate sector in India expected to contribute about 13% of the country’s GDP by 2025, the demand for home loans is also at an all-time high. More and more people are looking to avail credits to invest in residential and commercial properties. Further, surveys suggest an 18% YoY increase in the 2018 of joint home loan applications.
With a joint home loan, you can increase your loan eligibility. By applying for the loan with co-applicants who have their independent source of income, you can be eligible to avail a higher loan amount than that of a standard home loan.
How is a joint home loan beneficial?
A joint home loan is one that is availed by two or more people together. Since the loan is availed jointly, the repayment liability for the loan is also divided equally among the co-applicants. Since more people are applying for the loan, financial institutions are more willing to extend, owing to low-risk levels.
You can apply for a home loan jointly with the following people:
- Your parents – You can opt for a joint housing loan with one or both of your parents.
- Spouse – You can consider owning a property with your spouse jointly. If so, the lender will consider the repayment capability of you and your spouse together which will help in better terms and features. In this case, your spouse must also be the co-owner of the house.
- Siblings – You can apply for the loan with your siblings as long as they are co-owners of the house.
- Son/daughter – Your son, who has the primary ownership among multiple heirs, can be a co-borrower for the joint housing loan. You can also apply for a home loan jointly with your daughter, who is unmarried and the primary owner of the property.
What are the key benefits of taking a joint housing loan?
There are numerous benefits to taking a joint home loan. For instance,
Tax benefits:
A significant advantage of a joint housing loan is its tax benefits. You are eligible to enjoy tax benefits under Section 80C and Section 24B of the Income Tax Act. The tax benefit on joint home loan include:
- You can avail a tax rebate of up to Rs. 3 Lakh cumulatively every year on the principal section of your EMI under Section 80C of the Income Tax Act. However, you must remember that your rebate cannot exceed the principal amount. To calculate your EMI accurately, you can make use of an online EMI calculator, made available by financial institutions.
- You and your co-borrowers can also avail tax benefits amounting up to Rs. 2 Lakh on your home loan interest rates. However, you must remember that the maximum tax benefit you can avail cannot be more than Rs. 4 Lakh and cannot exceed the actual amount of interest you need to pay to the lender.
Eligibility to avail a higher credit amount
Lenders usually extend a higher eligible loan amount in case of a joint housing loan. The loan amount depends on the borrowers’ capacity to repay it. Since you and your co-applicants’ incomes are considered as a joint sum repayment capability for the loan, you automatically become eligible to avail a higher amount.
Women co-owners can avail special interest rates
Few financial institutions offer a lower interest rate for women home loan applicants, which is a few points lower than standard interest rates. To avail such interest rates, the female has to be the sole or co-owner of the property and an applicant or a co-applicant for the home loan.
Easy availability of loan
When it comes to availing a home loan, there is always a higher chance to avail a joint home loan faster than a standard home loan. Financial institutions consider joint home loan applications a better prospect.
Thus applying for home loans jointly can give you many extra benefits over standard home loans. However, make sure you know about your loan eligibility by using the home loan eligibility calculator to make the process of availing the joint loan simple.
