Guide Loan

How Taking A Joint Home Loan Is Beneficial- Check the pros 

In order to buy an expensive house or property, sometimes a borrower may have additional borrowers as per the guidelines of the issuing bank. It combines the eligibility of all the borrowers and hence you can go for a very expensive house even, that you can’t afford, if you apply for the home loan as a single borrower. This is called a joint home loan and it has the following features:

There are various features available that indicates the requirement to get help today in the repayment of the home loan. A look at the features is essential to get the benefits in repaying the home loan amount. The benefits are also available for joint home. 

The co-borrower is your partner in joint home loan, who applies jointly along with you. A co-borrower may or may not be the co-owner of the property. In India, the bank allows you to have up to six co-borrowers. But, all the borrowers should have a direct family relationship with the applicant.

Apart from the “Know Your Customer” (KYC) documents, you need to furnish ID proof, income documents, address proof and bank statements of all the applicants.

Even though, you can apply for a home loan jointly, the monthly installments would be paid only by one of the applicants. You can use a singular or joint account for this purpose. You can also have an arrangement wherein, the monthly installments can be shared among the borrowers, as far as the number of installments in a year is concerned.

The benefits of a joint home loan:

Ability to borrow a higher loan amount:

The major reason why people apply for a joint home loan is their enhanced inability to borrow a loan of the greater volume. For example, if the cost of the property is Rs.2 crore, and bank can finance up to 80% of this amount, which is 160 lakh rupees; the bank assesses your salary, and can provide a loan of up to a certain times of your salary. If, your salary is less than the amount, which qualifies you for such a huge amount, you have two options. Either, you should forget about this property and look for a cheaper home or else combine the salary of your spouse to enhance your eligibility, which qualifies you for such an amount.

Tax Benefits:

Getting additional tax benefits is the next major reason why people apply for joint home loans. When the working couples opt for a joint home loan, the total tax liability drops considerably as a unit. The Indian IT Act enables you to have deductions on both your interest payment and the principal repayment. According to section 80 C and section 24 B, an individual is entitled for a claim up to Rs.1.5 lakh on interest payment and up to Rs.1 lakh on principal.

In case you occupy the property along with your spouse, then both of you are entitled for such a claim, but it depends on the individual’s share in the home loan.

For example, as an individual you qualify for a deduction of Rs.2 lakh and Rs.3 lakh on principal and interest repayment, respectively, you can have your spouse as the joint applicant of this loan. In this case, both of you would be entitled for a separate income tax deduction of these amounts each. So, the deduction would be twice the above-mentioned amounts for the principal and the interest repayment.

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