Home Loan, Home Loan With Family or Other? Is It Really Worth It?

Research says that more than 70% of people looking to buy a home in India exceed their initial budget of expenses to the residential purchase by at least 20%. The additional 20% can then proceed to become a burden in the later years if the individual has no sound plan to pay it off.

While home loans make life considerably easier for people looking to purchase a house, when you avail a joint home loan, you can even cover the extra 20% unplanned expenses. Taking joint loans also comes with several additional benefits that can be quite advantageous in the process of availing a loan and paying it off.

Apart from tax exemption benefits under Section 80C and Section 24, availing home loans also become significantly easier when you opt for it jointly.

What Is a Joint Housing Loan?

A joint home loan is where more than one individual jointly applies for the home loan with the lender. Financial institutions are more willing to extend joint loans because there are two or more people involved in it, making it less risky. Thus these loans are easier to avail. Few financial institutions even offer home loan jointly to up to six family members, minimizing repayment liability.

Who Can Avail Home Loan Jointly?

You can avail the home loan jointly with the following people –

  • Parents
  • Spouse
  • Siblings

However, most lenders insist that the property must also be co-owned by the co-applicant. You can also apply for the loan jointly with a friend with the same features and benefits.

Benefits of Availing a Joint Housing Loan

Applying for a joint housing loan has numerous benefits over standard home loans. Some of them are –

  • You can avail a higher loan amount

Most financial institutions offer a higher loan amount in the case of joint loans. The loan amount depends on the repayment capabilities of each person.

  • Tax Benefits

You can avail tax benefits on joint home loan under Section 80C and Section 24 of the Income Tax Act. However, it is essential to note that these benefits can be availed if each co-applicant has joint ownership of the property, and each of them is contributing to the loan repayment. The tax benefits on joint home loan include –

  1. According to Section 24b of the Income Tax Act you and each co-borrower can avail tax benefits of up to Rs. 2 Lakh on the interest paid per annum. The maximum tax benefit you can avail cannot exceed Rs. 4 Lakh and cannot be more than the interest payable.
  1. Under Section 80C of the Income Tax Act, you can also claim tax deductions of up to Rs. 3 Lakh cumulatively on your EMI’s principal component.
  • Lower Rates of Interest with a Female Co-Applicant

If the primary applicant of the joint loan is a woman, the lender will be compelled to offer lower home loan interest rates. However, that individual has to be either the sole or at least the joint owner of the property.

How to Know If You Are Eligible to Apply for the Loan?

The primary eligibility criteria to apply for a joint home loan are to know how much you can borrow with your co-applicant. Knowing the amount you are eligible to borrow gives you scope for better planning and also reduces the chances of loan application rejection.

The easiest way to calculate the amount you are eligible to borrow is by using a salary home loan calculator. You can avail this online calculator from financial institutions like Bajaj Finserv to calculate your eligibility. After knowing the amount you are eligible to borrow you can opt for the joint housing loan and safely venture into the process of investing in property.

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