In order to ease the repayment of your home loan, you can consider taking the loan jointly with your spouse, family member, or relative. A joint home loan allows you to share the burden of repayment and responsibility with a trusted family member. Furthermore, you can avail of better terms on these home financing options such as a higher loan amount or reduced home loan interest with a co-applicant. Also, both of you can gain joint home loan tax benefit. Here are the basics of a joint home loan along with its benefits.
Does a co-applicant need to be a co-owner?
It is not mandatory for a co-applicant to be the co-owner of the home or property you are buying unless it comes to relatives or siblings. However, all co-owners whose names are mentioned in the property documents need to be co-applicants.
Benefits of taking a joint home loan:
Get more funds
As there is more than one person involved in the application for a home loan, the lender will approve your sanction based on both your incomes and creditworthiness. Here, the involvement of two individuals ensures a higher loan amount sanction, if you both match the eligibility criteria. If either of you is a woman, you can increase your affordability too as lenders offer lower home loan interest rates to women.
In this regard, you can choose lenders like Bajaj Finserv to get a Joint Home Loan of up to Rs. 15 crore* for a tenor of 32 years on easy terms and competitive interest rates.
Enjoy tax benefits
Availing a joint home loan will help both of you to benefit from tax deductions. If both you and your co-applicant are joint owners of the property and are both contributing to repayment you can claim tax deductions separately. Under Section 80C of the Income Tax Act, you can claim up to Rs. 1.5 lakh in a year on principal repayment. You can also claim up to Rs. 2 lakh on interest repayments if you are residing in your purchased property. In case you have rented out the property or house, there is no limit on the tax deduction you can claim for interest repayments. Here it is essential to note that the extent of deductions is based on the repayment and ownership proportions.
Experience ease of repayment
In a joint home loan, you share the burden of repayment with your co-applicant. So, the burden of EMIs is lower on your individual incomes. Two people contributing towards repayment of a loan allows you to pay higher EMIs over a shorter tenor. This reduces your interest obligations and increases your chances of becoming debt-free faster.
Use the home loan EMI calculator available on lender websites to choose budget-friendly EMIs. For added convenience, you can open a bank account jointly and operate your home loan repayment using that, especially if you are taking a joint home loan with your spouse.
Remember to avoid taking a joint home loan in case you are retiring soon, have a bad credit history or are already in debt. This is because any rejections based on these parameters can affect your co-applicants credit score too and vice versa.
Bajaj Finserv brings you pre-approved offers for personal loans, home loans, business loans and a host of other financial products. Not only does this simplify the process of availing financing, but also helps you save on time. All you have to do is share a few basic details and check out your pre-approved offer. Need instant financing? Think it. Done with Bajaj Finserv.
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