One of the biggest liabilities of an individual's life is Home Loan. That is why it must be achieved carefully. Sometimes it happens that you aspire to buy the house of greater value, but you may not be eligible for such a large amount. This is where Joint Home Loans can come to your rescue.
What is joint home loan?
A finance, which is taken by more than one person is known as Joint Home Loans. Here are some of the feature and advantages of these loans:
Features of Joint Loan:
- Co-Borrower: An individual is the person with whom a person takes a loan for his home jointly. It is different from the term co-owner. Co-owner is the person who has the share of his property. In India, there can be around 5-6 co-borrowers while taking the loan. Joint Loan can be taken by the spouse, parent and the child.
- Tenure of the Loan: Depending upon the financial institution, a tenure period varies from 20 to 25 years. It happens in the case when the co-applicants are spouses. In the case of co-applicants who are in parent-child relationship, the maximum term restricted to 10 years.
- Documentation: In Joint loan, certain documents are required from both of the co-applicants. The most important Documents For Joint Home Loan includes residence proof, ID proof, income proof, and last three-month bank statements and proof of the co-ownership of the property.
- Repayment of the Loan: Though the loan has to be repaid by one of the persons, it can be made by the joint account of one of the persons. All of the co-borrowers are equally liable to repay the loan amount. Thus, if a person fails to repay the loan, the other borrower is likely to pay the loan amount.
Why a person must go for Joint Home Loan?
- Ability to borrow a higher amount: If you want be Eligible for a larger loan amount, you can avail this loan. For instance, you want to purchase a house that costs about Rs 1 Crore and your salary is not enough to be eligible for such a larger loan amount. In that case, you can use your wife, parent and children as a joint applicant for the loan.
- Tax Benefits: There has been a trend in availing the joint loans among young couples today. As this facility contains an exciting feature of Tax Benefits. According to the Income Tax Act, both of the principal and interest payments are exempted from your income. It falls under Section 80 C of income tax act. One can claim up to Rs 1 lakhs for the principal payment.
Thus from the above details, it is shown that the joint home finance results in substantial savings collectively.