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Introduction - What do you mean by a Joint Home Loan?

In India, people stay in large families. Hence, there is a need for bigger space and accommodation. Buying a bigger house requires more budget—all of which calls for proper financial planning. Financial planning for buying your dream house isn’t easy and requires a lot of funding. Even if you avail of a home loan, the process of repayment isn’t easy. Applying a joint home simplifies it for you. It reduces repayment stress, allowing you to share it with the co-applicant who is a trusted family member.

Who can be the co-applicant?

You can apply for a joint home loanwith any of your family members. Most people take a joint home loan with their spouse or sibling. Like any other loan, you must satisfy its eligibility criteria. The family member applying for this loan must be a citizen of India. They must regularly draw an income, either as a salaried or a self-employed individual.

There are certain joint home loan benefits. Let us look at what they are.

The benefits of applying for a joint home loan: What are they?

  • Tax benefits: Applying for a joint home loan gives you certain tax reliefs under the Income-tax Act. You must not only be a co-borrower of the loan, but you must also have ownership of the property to claim tax relief. In addition to it, the construction of your property must be complete.

Only after satisfying these conditions can you claim certain tax deductions as laid down under the Income Tax Act. Let us have a look at them:

  • Section 80C: You can claim tax deductions up to Rs. 1.5 lakh a year on the principal loan amount.

  • Section 24: You can claim a tax deduction of up to Rs. 2 lakhs a year on the interest paid on the home loan. It can be claimed even in the case of rented (let out) property.

  • Higher Loan Amount: Taking a joint home loan will make you eligible for a higher loan amount. Having a co-applicant to the loan will enhance your income level to the lender, unlike in the case of an individual home loan where the income of only one person is considered. The lender will consider income of both the applicants, thus making you eligible for a higher loan amount.

  • Reduces the burden of repayment: Taking a joint home loan reduces the financial strain on both parties—where there is a lesser burden of EMIs on individual incomes. Since the EMIs are paid jointly, it shortens the tenure and makes the process of repayment faster.

  • Lower interest rates: Taking a joint home loan with your spouses or mothers can help you get a joint home loan with lower interest rates. Lenders offer lower interest rates to female borrowers as compared to male borrowers.

Conclusion: Before you apply for a joint home loan, you must know its benefits, especially the joint home loan home tax benefit. It will simplify and ease the process of repayment towards the purchase of your new home.





Disclaimer -

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. Please note, loans related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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