Buying a home or a property is a dream of millions of people. But fulfilling this dream requires money as well as smart planning. Gone are the days when the man of a house had to bear the burden of the debt. Nowadays families are opting for Joint Loan for buying a home or a property. Why not learn more about it to take the benefit out of it.
There are many advantages of taking Joint Loan. But before that
you must know:
What is a Joint Loan?
Who can become your co-borrower?
A joint loan is a shared credit between two or more borrowers. All
the borrowers are equally liable to repay the loan. In a joint loan, the credit
eligibility is increased since the incomes of all the borrowers are considered while
sanctioning the loan.
Who can be your Co-borrower? The co-borrower should either be the
spouse or any person from the blood relation. The co-borrower can be your
parents, children, siblings and spouse.
The co-ownership of the property is not compulsory if the
co-borrower is spouse. However, if the co-borrower is parents or siblings, then
it is mandatory to make them co-owners. A friend or the sister is not
considered as the co-borrower for the joint loan. Even unmarried couples living
together are not eligible for a joint loan. However, they can become co-owners
in the property.
The tenure of the joint loan can be a maximum of 20 years,
considering the retirement age of the eldest applicant. If the co-applicants
are parents or children/ siblings, then the duration of the joint loan is generally
restricted to 10 years.
Major Advantages of a Joint Loan
Tax Return Advantage– If you have taken a home loan, then you can claim a tax deduction on the interest paid on the home loan. In case of a joint loan, both the applicants can claim tax rebates.
Investment Advantages– The investor can claim a deduction upto a threshold limit on the capital gains derived from the sale of the property by reinvesting in specific assets. This limit is extended in case of jointly owned property.
Return Advantages on Rental Income– Individuals can claim tax deductions on the income from the rental property. The loss from the house property is also eligible for tax rebates. If your rental income is lesser than the interest paid on the loan, then it is eligible for tax rebates in the future.
Increased Loan eligibility– An individual can avail different advantages on home loans under various schemes. Although the loan seeking ability increases if the borrower is a woman. In a joint loan the borrowing eligibility further increases as the salary of both the applicants is taken into consideration.
Effect on Credit Score– The joint loan is reflected in the credit information report of all the borrowers/ co-applicants. In case of good repayment track record, the credit score of all the co-applicants increase and vice-versa.
However, there are some disadvantages to a joint loan as well. If
there is a difference among the co-borrowers in future, then the repayment and settlement
of the loan becomes a cumbersome issue.
Here are some of the problems a person can face in
a joint loan:
If there is a
disagreement between the borrowers or there is a split between husband and wife,
then loan repayment turns out to be a bad experience.
In case of the death
of the spouse, the surviving borrower has to repay the whole amount.
If the co-borrower
refuses to repay, then it affects the credit score of both the applicants and
may even lead to the termination of the loan.
Buying a house becomes easy when two
applicants come together and apply joint loan. Since a join loan has numerous advantages,
every couple should take the benefit of it. Now, leave your worry of monthly
rental aside and rush to get your joint loan processed for an owned residence.