Joint Ventures: Decoding Joint Home Loan Interest Rates
Individuals with low home loan eligibility or individuals who want a home loan amount higher than they are eligible for are advised to take a joint home loan. Similarly, couples and taxpayers are also advised to take a joint home loan as it helps reduce a family’s tax liability.
What is a joint home loan and what are the benefits associated with these loans?
A joint home loan is a loan availed of by two people together. In such types of loans, the burden of loan repayment lies not with one person but all the co-borrowers. This helps reduce the liability on one person and therefore, the chances of loan default. Further, in the case of home loans, lenders decide the home loan amount to be sanctioned after taking into consideration the repayment capacity of all the borrowers. In the case of joint home loans, therefore, a higher loan amount is easily sanctioned. Further, all the loan applicants can claim tax benefits separately under Section 80C and Section 24b and maximize tax savings.
Joint home loan applicants must however keep in mind that not everyone gets approved for these loans. Certain criteria must be met. Let’s talk about these eligibility criteria.
Eligibility Requirements for Joint Home Loans
You are eligible for a joint home loan if you meet the following conditions:
- An individual can apply for joint home loan only with an immediate family member. They can apply for a joint home loan with their spouse, parents, children and siblings.
- Every individual who has been designated a borrower in the loan agreement must have a separate source of income.
- Only individuals who are also co-owners of the property can apply for a joint home loan.
- All the co-borrowers must meet the age requirements set forth by their lender. Please keep in mind that the maximum age is always the age of the borrower at the time of loan maturity.
If you meet these qualifying criteria, you can apply for a joint home loan. Here are a few more things you must keep in mind if you are planning to apply for a joint home loan.
Things to Keep in Mind When Applying for a Joint Home Loan
1. If you are planning to apply for a joint home loan, know that the lender will check all the loan applicant’s CIBIL scores. To enhance the chances of approval and availing of the loan on the best loan terms and conditions, make sure all the applicants have an excellent credit score.
2. Almost all lenders offer a lower housing loan interest rate to women loan applicants. Therefore, if you are planning to apply for a joint home loan, include a female loan applicant to benefit from lower interest rates.
3. In the case of joint home loans, all the borrowers can claim tax benefits separately. All co-borrowers can claim tax benefits up to Rs.1.5 Lakh on the principal component of their loan and under Section 24b, they can claim tax benefits up to a maximum of Rs.24 Lakh. So, make sure to maximize tax savings by claiming joint home loan tax benefits separately.
Joint home loans offer several benefits. So, if you are planning to apply for a home loan, consider adding a co-borrower to your loan application.
