Joint Home Loans

A joint home loan is a housing loan that is taken by more than one person with shared financial responsibility. Any of your immediate family members, including your spouse, parents, and siblings, can be co-applicants for a joint home loan.

There are many advantages of taking out a joint home loan with a co-applicant. Here are some of the benefits that joint home loans offer:

• Tax Deduction

All the co-borrowers can claim a tax deduction separately on both, the principal, as well as the interest portion of the loan EMI. This is as per Sections 80(C) and 24(B) of the Income Tax Act, 1961.

• Improved Eligibility

If you apply for a home loan with a co-applicant who also has a regular source of income, you can become eligible for a higher loan amount. You can also negotiate for better loan terms with the bank/NBFC. For example, you may become eligible for a longer loan tenure.

• Lower Registration Fee and Stamp Duty

If you are applying for a joint loan with a female co-applicant, you can get a concession on the stamp duty and registration fee.

By applying for a joint home loan, all co-applicants can enjoy tax benefits as per the Income Tax Act, 1961. These include:

• Section 24 (B) - A borrower can claim a deduction of up to ₹2 Lakhs on the interest portion of the EMI

• Section 80 (C) - A borrower is eligible to claim a tax deduction of up to ₹1.5 Lakhs on the principal portion of the loan EMI

• Section 80 (EE) - A first-time home loan borrower can get a deduction of up to ₹50,000 on the interest paid over and above the deductions claimable under Section 24 (B)

Note that each applicant is eligible to get a deduction of up to the maximum amount allowed under each section. For example, both co-applicants can get a tax deduction of up to ₹2 Lakhs each on the interest paid for the home loan, as per Section 24 (B). 

Provided below are some common conditions you should fulfil before applying for a joint home loan to have a better chance of getting your application approved:

• You can have a maximum of 6 co-applicants and a minimum of 2 co-applicants for a joint home loan

• You cannot avail a joint home loan with any random individual, including your friend/s or business partner/s

• Each co-applicant has to fill in a separate application form and provide individual documents for the same 

• Repayment for a joint housing finance plan can be done through a joint account of the co-borrowers or by splitting the EMI equally or proportionally among them

The eligibility criteria for a joint home loan vary across lenders in India. The general eligibility conditions for a joint home loan are as follows:

• Borrowers must be citizens of India

• Borrowers should be aged between 22 and 62 years (for salaried applicants) or 28 and 70 years (for self-employed applicants)

• Work experience should be a minimum of 3 years (for salaried applicants) or 5 years (for self-employed applicants)

• Borrowers’ CIBIL score should be over 750 

All the co-applicants need to provide the following documents to the bank/NBFC along with their joint home loan application:

• Proof of Identity - Aadhar card, PAN card, Voter ID, Passport, etc.

• Proof of Residence - Aadhar card, Voter ID, Passport, rent agreement, utility bills

• Proof of Income - Bank account statements of the last 3 months, ITR of the last two years, salary slips of the last 3 months, and/or Form 16

• Property Documents - Past title claims, sales deed, conveyance deed, allotment letter, possession letter, latest property tax receipt, and copy of approved construction/extension

• Recent passport- size photographs