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Planning To Take A Home Loan? Here Is How Joint Home Loan Can Be Beneficial

Adhil Shetty
Image source: pressfoto/Freepik

Buying a dream home is everybody’s aspiration. Despite this being a buyer’s market, housing prices in urban areas continue to be sticky, making it tough for salaried individuals to buy their dream home. In such a scenario, a home loan may be necessary to bridge the gap between savings and the home purchase price.

One of the ways to increase one’s home ownership prospects is to make the purchase jointly with another person – normally a family member. This would not only help you close a good deal but also provide you the benefits of taking a joint home loan.  However, taking a joint home loan isn’t as straight-forward as it sounds, so let’s dig deeper.

Who Can Be A Co-Applicant?

You can apply for a joint loan with your parents, spouse or blood relatives like children or siblings as co-borrowers. Like the main borrower, the co-borrower will also be liable to repay the loan amount. Having a co-borrower helps you share the burden of loan repayments. However, it is important to note that there is a difference between a co-owner and a co-applicant. While a loan co-applicant may not be part owner of the property, a co-owner is. There are other benefits of taking a joint home loan as well and we take a look at each one of them in detail to help me you make a smart choice.

 It Improves Your Loan Eligibility

Every lender has its own eligibility criteria involving the borrower’s income, credit score, age, income source, and current borrowings. For example, to get the best deal from a bank, you need to be a salaried woman with a credit score of at least 750. If you personally don’t meet your eligibility criteria, but your spouse does, you can apply for the loan jointly and improve your overall eligibility to get a good financing deal.

 You Will Have Someone To Share Your Debt Burden

Buying a house on a loan is a long-term commitment, which you have to manage with your limited income. Taking a joint home loan will help you share the loan burden without compromising on your necessary financial commitments. A co-borrower generating their own income stream can come to your rescue during times you fail to pay the EMI due to emergencies like a job loss or any unforeseen medical emergency. This would lead to less financial stress for your family as a whole, and help you achieve your life goals without the home mortgage getting in the way.

 You Can Seek Higher Amount As Loan

A co-borrower helps you in getting a bigger home loan amount sanctioned as the lender considers both you and your co-borrower’s combined income before approving a loan. So, in case you are looking for a loan amount of greater value, a co-borrower can be of immense help.

Various Tax Benefits Both Can Avail

A joint home loan can also help each one of you avail tax benefits on home loans under various sections of the Income Tax Act. If the property is self-occupied, each of you can avail tax deductions under Section 80C for the principal repaid up to Rs. 1.5 lakh. You both can additionally avail tax deductions to Rs. 2 lakh each under Section 24B for the loan interest repayment. So, for instance, you have a joint home loan with your wife and the interest on the home loan is Rs. 5 lakh, you both can avail tax deduction of Rs. 2 lakh each. More deductions mean more savings for your family.

Therefore, a joint home loan has more benefits than an individual loan. While ensuring a bigger loan amount, it also reduces the burden on your pocket. However, you should assess your and the co-borrower’s overall financial situation before committing for a joint home loan.

The writer is CEO,, India’s leading online marketplace for loans and credit cards.