According to a recent survey, most home loan applicants are buying houses at a 20% higher cost than their planned budget. This indicates that several individuals are not taking advantage of the various benefits offered by financial institutions when borrowers involve a co-applicant in home loan applications.

Purchasing a house is one of the most important financial decisions an individual takes in his or her lifetime. Hence, applying for a joint home loan is advised for arranging your finances in the most convenient and relaxing way possible.

Why avail a joint home loan?

Not only your chances of loan approval increase but income tax benefits also play a major role in making joint home loans more advantageous than housing loans availed in an individual capacity.

Financial institutions will approve your joint home loan application where your spouse is the co-borrower only if your spouse is –

• Also the co-owner of the house.
• Salaried or self-employed individual.
• An Indian citizen and possesses the necessary KYC documents.

Benefits of a joint home loan

There are several benefits of availing a joint home loan with your spouse as a co-applicant. These are –

• Improves loan eligibility

As a home loan applicant, you can improve your housing loan eligibility by adding a co-applicant. You will also be able to secure a higher loan amount, which you can assess with an online home loan eligibility calculator.

Since your financial burden and repayment responsibilities are shared with your co-applicant, your creditworthiness also increases, which helps to lower your chances of a loan application being disapproved. The relation between the co-applicants governs the eligibility of a housing loan. So adding your spouse helps to improve your home loan eligibility.

• Substantial loan amount

Since your housing loan eligibility has the potential to increase when adding your spouse as a co-applicant, financial institutions will not hesitate to offer a higher loan amount. Moreover, with improved loan eligibility, borrowers can also negotiate with the lender for a lower home loan interest rate.

Financial institutions offer home buyers with the facility of applying for a joint home loan with a maximum of 6 co-applicants. Hence, along with your spouse as a co-borrower, you can add other eligible co-applicant such as parents, siblings, daughters, sons, etc. Higher the loan eligibility, greater will be your loan principal offered by your financial institution.

• Tax benefits on joint home loans

The tax benefits offered by the Income Tax Department of India for home loan applicants are –

• Under Section 80C, borrowers are eligible for a tax deduction of up to Rs.1.5 lakh on the principal component of their loan repayments.

• As per Section 24(b), home loan borrowers can claim a tax deduction of up to Rs.2 lakh on annual interest payments on their home loan EMIs.

All the tax deductions, which can be claimed under Section 80 C and Section 24(b) of the Income Tax Act are available in full to each of the co-borrowers in case of joint home loans. Hence, while applying for a home loan with your spouse as a co-borrower, you can avail twice the benefits compared to being a single home loan applicant.

Financial institutions and Indian Government initiatives such as PMAY offer more preference for home loans when the owner of the house is female. Hence, home buyers can enjoy substantial benefits if their spouse co-owns the property and is a co-borrower on the home loan as well. When you avail a loan at a lower interest rate, your EMIs will also decrease, which you can estimate by using the Bajaj Home Loan calculator. This calculator helps to determine how much loan EMI you can afford.