Many home loan borrowers often fail to get approval for the desired amount because they either do not meet the lender’s eligibility requirements or don’t have sufficient income. In such a case taking a joint loan can be an excellent solution. Read on to know more about the benefits of a joint home loan.
Many home loan applicants understand the fact that it is a high-value loan and repaying the amount by themselves can be difficult. So, to ease the burden of repayment and avail higher credit, many people apply for a joint home loan.
A joint home loan allows you to share the responsibility of the repayment with a trusted family member. Additionally, if the co-applicant is an earning member, you can get better loan offers. Not to mention, when you apply for a joint loan, both the partners get the tax benefit. So, before we look at the benefits of applying for a joint home loan, it would help to understand who can be a co-applicant.
Who can apply as a co-applicant for a home loan?
You can apply for a joint home loan with any of your family members. It is better to include an earning member as a co-applicant. To avail a joint loan, both of you must submit the necessary KYC (Know Your Customer) documents, including identity proof, residence proof, etc. In India, most people include either son/daughter or parents as a joint applicant.
Is it mandatory for a co-applicant to be a co-owner of the home?
No, co-applicants don’t need to be the co-owner of the property that you wish to buy. However, all the co-owners whose names are mentioned in the property documents must be co-applicants for the loan.
Benefits of applying for a joint home loan
The most important benefit of applying for a joint home loan is that you can apply for a higher amount as the lender will consider the income of both the applicants. Thus, with a higher loan, you can afford to buy a bigger house, and as both the applicants share the repayment onus, EMI payment could be easier too.
Besides, if either of the co-applicant is a woman, you can expect the home loan to be more affordable as most lenders tend to offer loans at a special interest rate for women applicants.
Another significant benefit of applying for a joint home loan is that you can get a discount on stamp duty. In its efforts to encourage women to be homeowners, the government offers a lower stamp duty for women home buyers. However, the lower stamp duty for women is available in only specific states like Uttar Pradesh, Haryana, Delhi, etc. So, if you are applying for a joint home loan with your spouse, you can expect to get valuable savings on the stamp duty.
When you apply for a home loan, you are eligible to enjoy various tax benefits. You can claim for deduction on the repayment of the principal amount up to a maximum limit of Rs. 1.50 lakhs under Section 80C of the Indian Income Tax Act. Additionally, under Section 24 of the Indian Income Tax Act, you can claim a tax deduction up to Rs. 2 lakhs on the interest repayment of the home loan.
Even when you apply for a joint loan, you can claim the tax benefits as individuals. This means if you and your spouse are applying for a loan, as co-applicants, you can claim tax benefits up to Rs. 3 lakhs under Section 80C and Rs. 4 Lakhs under Section 24.
Thus, there is more than one benefit of applying for a joint home loan; you not only get a higher loan, but also you can enjoy higher savings in terms of lower stamp duty and higher tax benefits.