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Joint Loan Eligibility 2023: Joint Home Loan 2023: Eligibility, Tax, Benefits & Repayment

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In This Article We Know Joint Home Loan , Joint Loan Eligibility 2023, Benefits On Joint Home Loan, Repayment Of Joint Home Loan 2023, Joint Loan Eligibility 2023 Shared Home Financing: The universal aspiration of owning a home prompts individuals to contemplate securing a home loan. Amidst the array of loans available in various banks and financial institutions, joint home loans stand out as particularly popular. Their appeal lies in the capacity to apportion the debt among multiple applicants and the substantial maximum sanction limit. Additionally, all members of the loan benefit from deductions under the income tax act for both loan repayments and interest payments. For further insights into joint home loans, continue reading below.

Joint Home Loan

A joint home loan is a loan approved for multiple individuals collectively.

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Co-applicant:

In the group of applicants, one is designated as the co-borrower to another. By opting for a joint loan, the responsibility of repayment is distributed among the applicants. A joint home loan can involve up to six members, typically including siblings, spouses, or parents. Banks permit joint loans for siblings if they share co-ownership of the property.

Joint Loan Home Eligibility
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Joint Loan Eligibility 2023

Joint Loan Eligibility 2023:

  • Minimum two persons are required.
  • Co-borrower is not obligated to be a co-owner of the house, but it is advisable to have a co-owner as a co-borrower to increase the likelihood of loan approval on the first attempt.
  • Married couples generally face no issues in obtaining joint loans from the lender.
  • Lending institutions require KYC details, proof of identity, proof of address, and proof of co-ownership as necessary documentation.

Tax Benefits On Joint Home Loan

  • Section 80C of the Income Tax Act 1961 enables an assessee to claim deductions for the repayment of the principal amount, while deductions for interest on the loan can be claimed under Section 24 of the same act.
  • In the case of a joint home loan, all co-borrowers can benefit from deductions for both the repayment of the principal amount and interest on the loan. The tax benefits will be proportionate to their respective shares in the home loan.
  • Currently, a maximum tax benefit of Rs 1,50,000 is available for the repayment of the principal amount under Section 80C, and Rs 2,00,000 can be availed for interest payments.
  • To qualify for these tax benefits, co-borrowers must also be co-owners of the property; otherwise, the deductions cannot be claimed.

Repayment Of Joint Home Loan 2023

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Repayment Of Joint Home Loan: The responsibility of co-borrowers is both collective and individual. In the event of disputes or divorce between spouses, the party willing to retain the loan benefits becomes liable for the entire loan repayment. Hence, it is advisable to establish a clear agreement specifying the share of each co-borrower.

Strategic Planning:

Given that all co-owners are eligible for tax benefits, it is recommended to allocate their respective shares of the loan in a manner that assigns the majority amount to the individual in the highest tax slab. This strategy facilitates the maximization of tax benefits.

Read Also: Bank Of Baroda Home Loan Interest Rate 2023: BOB Home Loan Eligibility Criteria, Documents, Fee?: जाने सारी यही से की कैसे मिलेगा आपको होम लोन

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Three Compelling Reasons to Opt for a Joint Home Loan

1.Qualify for a Larger Loan Amount

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By including a co-applicant who is an earning member in your home loan application, the lender takes into account both incomes when determining the loan amount. Consequently, opting for a joint loan increases your eligibility for a higher home loan amount compared to applying as an individual. This provides home loan applicants and their families the advantage of securing a more substantial loan amount, allowing them to purchase a home that aligns with their requirements and expanding their budget through the joint loan application.

2. Low-Interest Rate

To leverage the advantage of reduced interest rates on a home loan, the individual borrower may contemplate including their spouse or mother as co-applicants in a joint home loan application, also designating them as joint property owners.

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In India, female customers enjoy an additional benefit, as loans are extended to them at a lower interest rate, typically 10 to 25 basis points lower than the standard home loan interest rate for male borrowers. To avail of this advantage, a female borrower must be the sole or joint owner of the home and must act as an applicant or co-applicant in the home loan application.

3. Higher Tax Benefits

An additional significant advantage of opting for a joint home loan is the increased tax benefits, accessible to each co-applicant individually. To qualify for these tax advantages, co-applicants must also hold ownership of the property and actively participate in making EMI payments for the home loan repayment. The individual tax benefits that home loan co-applicants can claim include:

  • Repayment towards the principal amount of a home loan qualifies for deduction under Section 80C of the Income Tax Act, 1961, with a maximum limit of Rs.1.50 lakhs.
  • Interest payment on home loans is eligible for tax deduction under Section 24 of the Income Tax Act, 1961, up to a maximum of Rs. 2 lakhs for a self-occupied property.
  • In the case of a let-out property, the entire interest payment towards a home loan is eligible for tax deductions.
  • Each co-applicant can individually claim the above deductions based on the proportion of their contribution towards monthly EMIs, considering both principal and interest. This is subject to the specified limits mentioned above.

Conclusion

Acquiring a home is a significant lifelong milestone for many individuals. Consequently, making a wise investment in this once-in-a-lifetime asset is essential. Opting for a joint home loan application can make realizing this dream more attainable, thanks to the potential for a higher loan amount, a potentially lower interest rate (especially with a female co-applicant), and increased tax benefits available to individual co-applicants, provided specific conditions are met.

FAQ?: Joint Home Loan 2023

Q1. Is it possible for an individual with a low credit score to apply for a home loan?

It is advisable for an individual with a low credit score to refrain from applying for a home loan, as a low credit score increases the likelihood of the loan application being rejected. Even if the application is approved, the interest rate is likely to be unfavorable. Therefore, it is strongly recommended to focus on enhancing the credit score before considering a home loan application.

Q2. Is it possible for an individual who is not a co-owner to avail tax benefits for a joint home loan?

To claim tax benefits for a home loan, ownership or co-ownership of the property is a prerequisite. Even if you are a co-applicant for a home loan, you cannot avail tax benefits if you are not the owner or co-owner of the property.

Q3. Is it possible for me to seek tax benefits on a house property that is still under construction?

To avail tax benefits on a home loan, it is crucial that the construction of the house or property is fully completed. Tax benefits can only be claimed in the financial year when the construction reaches completion. Consequently, tax benefits cannot be obtained for an under-construction property. However, the Income-tax Act allows the consideration of prior completion expenses in five equal instalments as deductions, beginning from the year in which the construction of the house is finalized.

Q4. Is it possible for a co-applicant who does not contribute to EMI payments to still claim tax deductions?

Tax deductions can be claimed by a co-applicant only if they have consistently contributed to EMI payments. Their eligibility for tax benefits is determined by the proportion of their contributions towards both home loan interest and principal during a financial year.

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