What are the Benefits of Joint Home Loan?

What are the Benefits of Joint Home Loan?

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You can consider of availing home loan by making a joint application.

Benefits of Joint Home Loan

  • Income tax benefits
  • Home loan eligibility
  • Ownership advantages.

In these days, joint home loan has become a component of the household financing sector.

Your borrowing capacity increases with a joint home loan application. The lenders consider the repayment capacities of both the applicants. As the incomes of both the applicants create repayment capacity, the lenders approve the loan quickly. You can avail the income tax benefits under the act by joint home loan. Let us discuss the benefits of joint home loan in greater detail.

Increase in the borrowing capacity

This is the biggest advantage of securing home loan by making a joint application. This benefit can be witnessed at the loan application stage itself. While others struggle to get their loan approved, you can get it easily and quickly by making a joint application. Your borrowing capacity increases as the lender considers the repayment capacities of both the applicants.

After loan approval, you become a co-borrower from a co-applicant. Let us understand the benefits of joint home loan after becoming a co-borrower.

Income tax benefit under Section 80C

If you have availed joint home loan, then you can claim deduction of the principal amount repayment up to Rs.1.5 lakhs on individual basis. Each co-borrower can avail this benefit. In case to two co-borrowers, the deduction of amount Rs. 3 lakhs can be availed.

Let us study an example. If a husband and wife and currently paying principal amount of home loan up to Rs. 1 lakh. Then, they can avail tax exemption of Rs. 50,000 on individual basis.

Income Tax benefit under Section 24

The home loan co-borrowers can claim interest deduction up to Rs. 2 lakhs. In case of two co-borrowers, then the maximum deduction limit of Rs.4 lakhs can be claimed.

For example, a husband and wife are paying interest component of the home loan amounting to Rs. 2.5 lakhs. Then, on individual basis, they can avail exemption of Rs. 1,25,000.

It is suggested that you must decide the property ownership ratio properly and well in advance. For that, you need to evaluate your repayment capacities in order to avoid confusion in future.

Property Ownership

You need to keep this aspect in mind if you want to acquire the tax benefits for a joint home loan. If you are the co-borrower, then you must also be the co-owner of the applicant. Get this aspect clarified at the time of application itself. Suppose, you are a co-borrower but you do not have ownership rights in the property, then you are not entitled to avail the income tax benefits. Thus, being co-borrower and co-owner simultaneously of the same property is important to claim deduction under Income Tax Act.

Share in ownership denotes the share in tax exemption

The ownership ratio in the property reflects the share in tax exemption of the co-borrowers. Hence, you must always enter into an agreement of ownership sharing in the property. It must be on the requisite stamp paper and must serve as a legal evidence of your ownership in the property.

Thus, joint home loan is advantageous for a person at the time of loan application and repayment.

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1 COMMENT

  1. Buying your dream house can become a reality, even if you can’t afford to pay the entire amount. You don’t have to compromise on your dream anymore. You can apply for a home loan easily. Also, instead of going for an individual home loan, you can opt for a joint home loan. You can add up to 6 co-applicants while applying. By doing this, you not only share the amount to be paid but also get a loan of a higher amount.

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