20 APRIL, 2022

If you are unable to accomplish something all by yourself, taking help can help finish the work faster and even in a better way. Home loans are no different. A home loan can help you buy your dream house while keeping your savings intact. However, it is important to get a home loan at competitive interest rates and a substantial amount that helps you buy a decent house in today’s inflated economy. Unfortunately, you cannot get a home loan if your eligibility or income is low, unless you have a co-borrower. If you opt for a joint home loan, availing and repaying your loan can get much easier. Take a look.


What is a joint home loan?

In a joint home loan, the burden of repayment is shared by the co-borrowers. It also enhances home loan eligibility and helps repay the loan faster. You can take a joint home loan with your earning spouse, parents or siblings. However, not all lenders allow siblings to be co-borrowers. A co-borrower can be self-employed or salaried. A minor cannot take a home loan with you.


How can availing a joint home loan help you?


  • You can avail a higher loan amount

The lender can reject your application or offer you a lower loan amount if you have low income or poor eligibility. However, when you avail a joint home loan, lenders consider the eligibility of all co-borrowers while processing your application. The eligibility and income are clubbed, which can help you get a higher loan amount and buy a better house. 


  • You can get better interest rates

If you avail a joint home loan with your mother, sister or wife, you can enjoy lower interest rates. Many lenders offer differentiated interest rates for women borrowers. Moreover, many states levy lower stamp duty if the owner or co-owner of the property is a woman.


  • You can avail higher tax benefit

In a joint home loan, everything is divided between the co-borrowers, making it easier to repay and manage. However, it does not divide the benefits so that you get the maximum out of them. For example, tax benefits on a home loan are available individually to all the co-borrowers. You can avail a tax deduction on the principal amount of up to Rs. 1.5 lakh as per section 80C of the Income Tax Act. Similarly, you can avail a tax deduction of up to Rs. 2 lakhs on the interest repayment under section 24 (b). Co-borrowers can enjoy the tax benefit in proportion of their contributed repayment amount.              


When you avail a joint home loan, you can repay the loan with the co-borrower individually or collectively. The co-borrowers need not pay an equal amount and can repay as per their comfort. However, you must know that if your co-borrower defaults on repaying the loan, it could affect your credit score.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.