Benefits of taking a joint home loan

 Purchasing a home has always been a major financial decision and is even more considerable one during the current scenario. But with the property rates going down, the home buyers, especially NRIs, are opting for NRI housing loans from banks that will help them in the entire process of owning a home.

However, the eligibility for NRI housing loan depends on many factors such as the age, income levels, and/if there are any other loans that you are still repaying, among others. The last factor, though, affects your eligibility the most, as your home loan EMIs combined with other EMIs cannot exceed a certain level of your monthly income.

This leads us to list out the benefits of taking a joint home loan.

These are:

1. Enhances loan eligibility

A joint home loan is worth considering as it enhances the eligibility to get a higher loan amount. This can be done by adding co-applicants having independent income source. This, in turn, would make you eligible to apply for a higher loan amount.

Co-applicants can be an immediate family member; they can be either salaried or self-employed; and even Indian residents or even NRIs.

2. Enjoy tax benefits

When you apply for a joint NRI home loan, you also enjoy huge tax deductions separately, provided both the co-applicants are also co-owners of the property and are contributing to the home loan repayment.

The principal repayments are eligible for deduction under Section 80C of the Income Tax Act up to a maximum limit of Rs.1.50 lakh while the home loan interest payments are eligible for the same under Section 24 up to Rs 2 lakh in case the property is self-occupied. But if the property is let out, there is no maximum limit on the tax deduction.

In a joint home loan, collective tax benefits are much higher as the co-applicants are individually eligible for it. However, the actual amount of tax benefit enjoyed by each co-applicant relies upon the ratio in which they individually contribute to the repayment of the loan.

Therefore, you can plan how much tax benefit you can avail by determining the proportion of the loan each co-applicant is going to repay.

3. Special benefits for women co-owners

Another benefit of applying for a joint home loan is that women customers get a differentiated home loan interest rate, which is usually a few basis points lower than the normal ones. But for that, the woman has to be the sole or joint owner of the property under consideration. She also needs to be the applicant or at least co-applicant for the home loan.

Few points to note:

• The repayment responsibility of home loans can be the collective and individual responsibility of the co-applicants, where they choose to separately pay the EMI or do so through a joint bank account.
• All co-applicants- earning or non-earning- have to submit the home loan documents such as KYC (proof of identity and address), income and property documents to the lender.

Therefore, taking a joint NRI housing loan is beneficial at many levels. SBM Bank offers loan facilities to resident Indians as well as NRIs and helps you in buying your dream house, even during the pandemic.