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Planning to take a joint home loan, know its pros and cons

When you take a home loan in association with someone else, it is called a joint home loan. Often people take a joint home loan with their spouse or siblings. If a person is not able to repay the entire loan amount on his own, then he can take a joint home loan.

Benefits of joint home loan

  • You can also get a higher home loan if your partner has a good credit score and your combined income is enough to cover the EMIs.
  • In the case of a joint home loan, both the people can claim income tax benefits under section 80C. The condition for this is that both of them must be co-honors.
  • Both can take advantage of Rs 2 lakh on interest and Rs 5 lakh on principal.

Disadvantages of Joint Home Loan

  • If your co-applicant is unable to pay the EMI, it will affect your credit score.
  • The joint applicant can easily get the loan but it is not a guarantee of getting the loan. The reason for this is that providing home loans are very risky. 

These things to keep in mind

  • Your co-applicant should have a good credit score otherwise your application may be rejected.
  • Lenders sanction Joint Home Loans only if both the primary and co-applicants have good repayment capacity.
  • Many times the lender does not reject your application outright but gives you a loan at a higher rate of interest. The debt-income ratio between you and the co-applicant should not exceed 50-60 percent.

Female co-applicant

  • Many lenders keep the home loan interest rate low for women home loan buyers.
  • This rate is about 0.05 percent (5 basis points) lower than the normal home loan rate.
  • If there is a woman co-applicant in the home loan, then the benefit of a lower interest rate will be available only if the woman is the first applicant for the joint home loan. Or the woman should own or jointly own the property.


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