Benefits of Taking a Joint Home Loan: A Complete Guide

Complete Guide on the Benefits of Joint Home Loan _Banner _WC

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Complete Guide on the Benefits of Joint Home Loan_WC

5 min 16 Nov 2022

Highlights:

Benefits of Joint Home Loan
Who Can Be a Financial Co-applicant in a Joint Home Loan
How to Check Eligibility for a Home Loan

The Home Loan process can sometimes be overwhelming, especially if you are new to the credit world and lack a credit score. In such cases, a joint Home Loan can be a great option to consider because it permits splitting of the Home Loan with someone of a better financial standing. Let us understand how a joint Home Loan works, what are its benefits, and why you can consider it.

Top Benefits of Joint Home Loan

It can be beneficial to have some assistance when you're seeking a Home Loan. Here are some of the major benefits of a joint Home Loan:

Higher Sanctioned Home Loan Amount

The best and most obvious advantage of availing of a joint Home Loan in India is that you stand a chance of getting a sizeable loan amount sanctioned. This becomes possible since the lender considers two incomes instead of one for the same application. So, a borrower no longer needs to worry about having to compromise on their ideal home due to a shortage of funds. You can raise your budget and go for the property you want in the locality of your choice.

Easier Home Loan Repayment

When you have a financial co-applicant in your Home Loan, the responsibility of repaying the housing loan is shared between two individuals. This ensures easy Home Loan repayment.

Also Read: Is a Co-Applicant Mandatory for Home Loan?

Moreover, if you have a financial co-applicant to apply for a Home Loan, you may even be able to repay your Home Loan sooner. Since you have two incomes to pay the loan instead of one, you can opt for a higher EMI outgo each month. So, instead of taking a 30-year tenure on your Home Loan, you can opt for a lower tenure, such as 20 years or less. With a shorter tenure on your Home Loan, you are expected to save funds that would’ve otherwise been spent on repaying the Home Loan interest associated with a relatively longer tenure.

Greater Tax Benefits

Both the financial co-applicants can enjoy separate tax benefits on the same housing loan. The Home Loan principal and the interest are eligible for Home Loan tax benefits. The Joint Home Loan tax benefits are permitted under Section 123 of the Income Tax Act, 2025. However, it’s important to note here that the co-applicant/co-borrower of the loan must also be a co-owner to avail of tax benefits. 

Who Can Co-Apply for a Joint Home Loan?

A close relative can easily be added as a loan financial co-applicant in case of a joint Home Loan for more enhanced loan eligibility. When you apply for a joint Home Loan, your co-applicants can include your spouse, parents, siblings, son, or unmarried daughters. However, there are exceptions to applying for a joint Home Loan, such as you cannot apply with your business partner, a friend, or a minor.

Whose Credit Score is Used in a Joint Home Loan?

When you avail of a joint Home Loan, your lender will look at the credit score and credit history of all the applicants that will be on the loan. Since the credit of the individuals involved will impact the loan you qualify for, it can be detrimental if you or the other individual you're applying with has a low credit score.

A joint Home Loan approval is based on all parties' complete financial and credit information.

Additional Read: Can I Apply for a Second Home Loan?

How to Check Eligibility for a Home Loan?

You can easily check your eligibility for a Home Loan online with a housing loan eligibility calculator. It can help estimate the approximate loan amount you can qualify for. The tool is free and easy to use. All you need to do is enter some basic details into the tool to have a fair idea of your eligibility. The details will include the following:

City of residence
Date of birth
Monthly income
Monthly obligations

Once you fill in these details, you will be able to see the approximate loan amount you're eligible for. Do keep in mind that the ultimate decision on your Home Loan will also depend on other factors, such as your age, credit score, and existing liabilities. Your co-applicant’s details will also be taken into consideration.

Final Thoughts

It is advisable to close other major loans before applying for a Home Loan. The same is applicable to the co-applicant as well. Also, you can use a Home Loan EMI Calculator to get an estimate of EMI outgo before applying so that you are able to plan your finances.

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