Benefits of taking a joint home loan in India?

Buying a house is among the largest financial decisions one can make in their lifetime. The main reason couples and households in India choose a joint home loan is to increase their purchasing power when buying a house.

In this blog, we will discuss the advantages of having a joint housing loan, particularly focusing on joint home loans with a spouse, including cases where the wife is not working. We will also explore the eligibility criteria for joint home loans.

1. Higher Loan Eligibility

The biggest advantage of a joint home loan is increased eligibility for a higher loan amount. If an individual applies for a loan, then the salary, credit score of an individual and financial history are considered by NBFCs and banks regarding the approval of the loan. In a joint housing loan, both borrowers' earnings are combined. It enhances loan eligibility for the loan significantly. For instance, if you and your spouse earn ₹50,000 and ₹40,000 per month, the joint income which brings you to a total of ₹90,000 will get you a larger loan amount than either could secure on their own. It is beneficial for couples willing to buy a property together.

2. Share the Financial Responsibility

By sharing the financial responsibility, you can reduce the burden on one applicant and make repayment easier, which can benefit families with several costs, such as children's education or medical expenditures.

3. Tax Benefits

Joint home loans are beneficial for availing of tax benefits. Under India’s Income Tax Act, both borrowers can claim deductions on the interest and principal repayments. For interest payments, each borrower can claim up to ₹2 lakh under Section 24, and for principal repayments, each can claim up to ₹1.5 lakh under Section 80C. This means couples can get double the tax benefits compared to a single borrower. For example, if both partners pay ₹2 lakh in interest each, they can together claim a total deduction of ₹4 lakh.

4. Greater Credit Scores

Taking a joint housing loan can also have a positive effect on one's credit score. Thus, if one applicant has a lower credit score, a strong credit history by the other applicant can help get better rates after loan approval. Moreover, paying back a joint loan in a timely manner can help enrich both borrowers' individual credit profiles.

5. Loan Repayment Offers Flexibility

A joint home loan offers better choices for repayment. Since both partners share the burden of repayment, they can work together on a plan that would suit them based on their finances. This promotes better financial planning and lessens the anxiety faced with monthly payments.

6. Joint Ownership of the Property

A joint home loan means that you have both applied for the financing for the property that you acquire jointly. Both parties then have equal rights and responsibilities regarding the property. Such co-ownership thus strengthens the legal ground and creates accountability concerning joint expenses

7. Better Chances of Approval

A joint application for a housing loan is more likely to get approval due to the overall financial strength presented to lenders because of the two individuals who are applying together. If there is a case of an outstanding debt or a lesser income of one applicant, the stronger financial credentials of another applicant would offset these drawbacks and improve overall approval odds.

8. Best for Non-Working Spouses

Joint home loan with non-working wife is particularly useful as it allows the couple to apply for very large loans. All families thus need not worry about borrowing because of the earnings status of the individual.

Taking a joint home loan with wife in India is a good option for couples and families because it provides many advantages when purchasing property together. Eligibility can be increased, financial responsibilities can be shared, and in addition to the fact that women are often entitled to much lower interest rates, there are tax benefits that make it beneficial to take a joint loan. You'll want to think about taking a joint home loan with wife or another family member.

Making use of joint loans can transform dreams into reality for aspiring homeowners while also ensuring that their financial resources are best utilised. With proper planning and teamwork between the co-borrowers, availing of a joint housing loan would be one of the finest decisions you have made toward realising your dream abode in India.