As you know, a joint home loan is a loan taken by two or more people to purchase a home. Joint home loans are commonly taken by:
Spouses
Parents and children
Siblings
With a joint home loan, both applicants have the responsibility of the loan repayment and ownership of the property. Both can be eligible for tax benefits
Key Point: When you apply for a joint home loan, the incomes and credit scores of all co-applicants are added together. This really helps you get a larger loan amount than what one person could get alone.
Since two or more incomes are considered, banks are more confident to give a larger loan. This is great for couples or families who need a bigger loan to buy their dream home.
Some banks offer lower interest rates for joint loans, especially when one of the applicants is a woman. Most banks can give 0.05% to 0.1% lower rates to women co-applicants.
In a joint home loan, the responsibility for repaying the loan is shared. This means both co-applicants help pay the monthly payments, which makes it easier for each person financially.
One of the biggest draws for taking a joint home loan is the double tax benefits that both co-applicants can claim individually. Here’s how it works:
Tax Benefits on Principal Repayment:
Under Section 80C of the Income Tax Act, each co-applicant can claim a deduction of up to ₹1.5 lakh per year on principal repayment.
Tax Benefits on Interest Repayment:
Under Section 24(b), each co-applicant can claim a deduction of up to ₹2 lakh per year on interest paid.
For married couples or family members, a joint home loan gives both people equal ownership of the property. This is helpful in situations like inheritance or property disputes, as both co-applicants have legal rights to the home.
When applying for a joint home loan, there are some specific eligibility criteria to keep in mind.
Eligible co-applicants: Most banks allow spouses, parents, and siblings to apply together. Friends and unmarried partners will have difficulties unless the lender allows it.
Credit score: Both applicants should have a good credit score, usually 750 or higher.
Income proof: Banks need proof of regular income from all applicants to make sure the loan can be repaid easily.
Age limit: The maximum age for a joint loan is usually 60-70 years. Younger applicants can get longer loan terms.
Both applicants must submit their individual and shared documents to the bank. Here’s a list of what’s commonly needed:
Income Proof: Salary slips, income tax returns (ITRs), or bank statements.
Identity Proof: Aadhar card, PAN card, or voter ID.
Address Proof: Utility bills, ration card, or passport.
Property Documents: Sale agreement, title deeds, and property registration.
Co-applicant Relationship Proof: Marriage certificate (for spouses) or birth certificate (for parents and children).
Choose your co-applicant: Most people choose spouses or close family members.
Determine loan eligibility: Check if both applicants meet the income and credit score requirements.
Submit the application: Apply at the bank chosen by you.
Complete KYC and documentation: Provide identification documents, income proof, and property papers.
Processing and approval: The bank reviews the documents and checks backgrounds. The bank executive will check physically the property and verify you.
Disbursement: Once approved, the bank pays the loan amount to the seller or property developer.
| Benefit | Description |
|---|---|
| Higher Loan Eligibility | Combines incomes, allowing for a larger loan amount |
| Lower Interest Rates | Female co-applicants may receive 0.05%-0.1% lower interest rates |
| Shared Financial Burden | EMI is shared, easing individual financial load |
| Double Tax Benefits | Each co-applicant can claim tax deductions separately on principal and interest repayment |
| Equal Ownership | Ensures joint ownership of property, offering legal security and equal property rights |
| Enhanced Loan Approval | With combined incomes and credit scores, banks are more likely to approve loans at favorable rates |
Taking a joint home loan can be a smart choice for many families because it offers several benefits: higher loan eligibility, shared monthly payments, tax savings, and legal ownership. Whether you're buying a home with your spouse, sibling, or parent, a joint loan can make homeownership easier and more affordable.
With tax deductions under Section 80C and Section 24(b), each co-applicant can save money, making it simpler to manage the costs of buying a home. Remember to look at all your options, compare banks, and get professional advice if needed to make the most of your joint home loan.
Most banks require co-applicants to be immediate family members, such as spouses, parents, or siblings. Friends may face restrictions depending on the bank’s policies.
Each applicant can claim up to ₹1.5 lakh on principal under Section 80C and up to ₹2 lakh on interest under Section 24(b), totaling up to ₹3.5 lakh per applicant.
With a joint loan, you may be able to extend the tenure slightly if both applicants have a good credit score and financial stability, which can reduce the EMI amount.
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