The most significant advantage of a joint home loan is the increase in home loan eligibility. Incomes from all joint home applicants are pooled in to enable the applicants to obtain a higher loan amount towards purchasing their dream home. All the joint home applicants are eligible for tax rebates under Section 80 C for principal repaid and under Section 24 for interest repaid. However, these tax deductions are capped at 1 L for the principal repaid and 1.5 L for the interest repaid.
There are a number of advantages when you combine incomes and apply for a joint home loan. A bunch of these advantages are detailed here for your reference.
a. The most significant advantage of a joint home loan is the increase in home loan eligibility. Incomes from all joint home applicants are pooled in to enable the applicants to obtain a higher loan amount towards purchasing their dream home.
b. All the joint home applicants are eligible for tax rebates under Section 80 C for principal repaid and under Section 24 for interest repaid. However, these tax deductions are capped at 1 L for the principal repaid and 1.5 L for the interest repaid.
c. Another advantage of jointly taking a home loan is that all the borrowers can simultaneously avail these income tax rebates, thus maximizing the tax benefits of the home loan.
d. The number of people who can avail a joint home loan can be anywhere between 4 and 6, depending on their individual credit profiles.
e. The one criteria banks insist on is that all co-owners of the property should also be co-applicants but the reverse need not be true.
Who can take a joint loan?
– A married couple or a parent and child can take a joint loan.
– Some banks allow brothers to take a joint home loan provided they will both be co-owners of the property. Banks insist that all co-owners of the home must be co-borrowers in a joint home loan.
Exceptions: Sisters, friends or unmarried couples living together are, generally, not allowed such loans by banks.
Do both borrowers get tax benefits?
Yes. You as well as the co-borrower can avail tax rebates on the principal and interest repaid on the loan.
This way you can maximize your tax benefits.