As the name suggests, joint home loan is availing a credit with another person, usually a family who earns a steady income. Read on to know more about the benefits of taking a joint loan with your sibling.
Today, many home loan borrowers understand that it is a big-ticket loan and repaying the same alone can be challenging. So, to ease the repayment burden and avail a higher amount, nowadays, many people prefer applying for a joint loan.
Joint home loan is a facility offered by the financial organisations that allow you to avail a credit with another person, usually a family member and share the repayment responsibility with them. You can apply for a joint loan with anyone, but it is better to choose a co-applicant who earns a steady income. Generally, most people apply for a joint home loan with their sibling.
Benefits of applying for a joint home with your sibling
One of the significant benefits of applying for a joint home loan is that you can apply for a higher amount. The lender will consider both the applicants’ income and determine the eligibility accordingly. Thus, with a higher loan, you can afford to purchase a bigger home and share the repayment burden. This will help you easily pay off the EMIs without any hassles and disturbing your financial planning.
If you are applying for a joint home loan with your sister, you can expect the loan to be more affordable. This is because most financial organisations in India offer special discounts on the interest rate for women borrowers.
Apart from the benefit of lower interest rate, if you apply for a joint home loan with your sister, you can also get a discount on the stamp duty. To encourage the women in India to be homeowners, the government of India offers a lower stamp duty for women home loan borrowers. Remember, stamp duty is a statutory fee, and it is a significant amount. And, when you get a discount on the amount, it can help you save a sizeable sum.
It is a known fact that when you apply for a home loan, you are eligible to enjoy tax benefits. But, when you apply for a joint home loan, both the applicants can get the tax benefits, which means you can have additional savings in the family. Just like the usual home loan you apply individually, the principal amount you repay is eligible for a tax deduction up to a maximum limit of Rs. 1.5 lakhs in a financial year under Section 80C of the Indian Income Tax Act. The deduction is applicable for you and your sibling, which means together you can get tax benefit up to Rs. 3 lakhs.
In addition, the interest amount you repay is eligible for tax benefit under Section 24 of the Indian Income Tax Act. You and your sibling can get a deduction up to Rs. 2 lakhs individually in a financial year.
Thus, there are more than one benefits of applying for a joint home loan with your sibling. Make sure that you do your research well, know your rights and make the most out of your joint home loan.