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Tata Capital > Blog > Loan for Home > Pros & Cons of Getting a Joint Home Loan For Married Couples

Loan for Home

Pros & Cons of Getting a Joint Home Loan For Married Couples

Pros & Cons of Getting a Joint Home Loan For Married Couples

Purchasing your dream home is a huge financial investment. If you are funding the expenses with a loan, you can consider taking a joint home loan for couples to improve your repayment capacity.

Let us look at the pros and cons of joint loans.

What is a joint home loan?

A joint home loan for married couples is a housing loan taken jointly by a husband and wife to purchase or construct a residential property. Both spouses share the responsibility of repaying the loan, and the lender assesses their combined income while determining eligibility. This arrangement can help couples qualify for a higher loan amount, access competitive interest rates, and claim tax benefits individually, subject to ownership share and applicable tax laws.

Also, read – Home Loan Insurance Benefits for New Home Buyers

Pros of joint housing loans

#1 Rebate on interest rates and easy repayment

Most lenders offer lowered interest rates for women co-borrowers. Besides, in a joint loan, you can easily share the repayment burden with your co-applicant. So, your EMI obligations weigh less on your individual incomes.

But that’s not all! With two people repaying the loan, you can pay higher EMIs and close the loan over a shorter tenure.

#2 Higher loan amount

Taking a joint loan also means fulfilling home loan eligibility terms for a bulkier loan amount. How? In a joint loan application, you and your spouse pool your incomes together, increasing your EMI affordability and making you eligible for an extended tenure and higher budget. With a higher loan amount, you can buy a house aligning with your housing desires.

#3 Tax benefits

The best thing about a married couples joint home loan is that you receive tax benefits for both the principal amount and the interest paid. Why, yes! Thanks to Sections 24 and Section 80C of the Income Tax Act. And since two borrowers share the loan, you get double benefits and double savings.

But how much can you save? Section 80C enables you to claim a tax deduction of Rs. 1.5 lakhs in a financial year. Moreover, Section 24 allows you to claim an additional rebate of Rs. 2 lakhs on the interest paid.

So as a couple co-owning the property and co-borrowing the loan, you can claim Rs. 4 lakhs under Section 24 and Rs. 3 lakhs under section 80C. That’s a whopping total of Rs. 7 lakhs!

Also, read – What is Home Loan Prepayment and How Does it Work?

Cons of joint housing loans

Now that you know the advantages of joint home loans, let us look at their disadvantages.

#1 Transfer of burden

If one of the co-borrowers loses their job or faces a financial emergency, the repayment burden automatically falls upon the other partner. This can put an intense financial strain which may lead to EMI defaults. Not repaying your EMIs on time will also hurt your credit score.

#2 Death of spouse

If unfortunately, one of the spouses passes away, the burden of clearing the housing loan again falls entirely on the surviving partner.

#3 Separation

If a couple decides to part ways in the future or a co-borrower opts out of repaying the loan, the responsibility to pay the loan rests with one applicant. Inability to repay can lead to legal repercussions for both borrowers.

To avoid this, you can sign an agreement mentioning each partner’s share in loan liability beforehand.

Also, read – What Happens When a Home Loan Borrower Passes Away

Joint home loan eligibility criteria in India

For married couples planning to buy a home together, understanding the eligibility norms is essential before applying. Joint home loan eligibility for married couples is primarily evaluated based on shared financial strength, ownership structure, and individual credit profiles, as outlined below:

  • Spousal relationship: Both applicants must be legally married, with proof such as a marriage certificate if required by the lender
  • Co-ownership of property: Husband and wife must be co-owners of the property being financed
  • Combined income consideration: The lender considers the combined income of both spouses, one of the key benefits of joint home loan applications, as it can increase the eligible loan amount
  • Credit score requirement: Each spouse must meet the minimum credit score criteria set by the lender
  • Age eligibility: Both applicants should fall within the lender’s specified age limits at loan maturity
  • Employment stability: Salaried or self-employed spouses must show stable and verifiable income sources
  • Joint repayment capacity: The loan is sanctioned based on the couple’s combined ability to repay EMIs comfortably

How to apply for a joint home loan: Step-by-step guide

Once you meet the joint home loan eligibility criteria, applying for a joint home loan is a fairly straightforward process. 

Following these steps can help married couples maximise the benefits of joint home loan applications and ensure a smooth approval journey:

  1. Check eligibility of both spouses:

Review age, income, employment stability, and credit scores of both applicants to confirm joint home loan eligibility.

  1. Decide ownership share:

Finalise the property ownership ratio between husband and wife, as this impacts loan approval and tax benefits.

  1. Compare lenders and loan options:

Evaluate interest rates, processing fees, tenure, and repayment flexibility to make the most of the benefits of joint home loan offerings.

  1. Submit the joint loan application:

Fill out a single application form with details of both spouses and submit it to the chosen lender.

  1. Provide required documents:

Submit KYC documents, income proof, property papers, and bank statements for both applicants.

  1. Property verification and credit assessment:

The lender conducts legal, technical, and credit checks to assess risk and confirm eligibility.

  1. Loan approval and disbursal:

Once approved, the loan is sanctioned and disbursed as per the agreed terms and construction or purchase stage.

Conclusion

Joint housing loans are pretty attractive, considering the host of benefits they offer. Whether you are applying jointly or individually, get hassle-free housing finance with Tata Capital. Get extended loan tenures and the most competitive home loan interest rates, starting at 6.90%.

Evaluate your loan eligibility and apply today!

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FAQs

How does joint home loan eligibility work in India?

 

Joint home loan eligibility is assessed based on the combined income, age, credit score, and repayment capacity of all co-applicants. One of the key benefits of joint home loan applications is higher loan eligibility due to shared financial strength.

Can joint home loans be taken by family members other than spouses?

 

Yes, joint home loans can be taken with parents, children, or siblings, depending on lender policies. All co-applicants must meet joint home loan eligibility norms and be co-owners of the property.

What are the risks of applying for a joint home loan?

 

All borrowers are jointly liable for repayment. If one applicant defaults, the others must cover EMIs, which can affect credit scores despite the benefits of joint home loan arrangements.

How to claim tax benefits on joint home loan interest and principal repayment?

 

Each co-owner can claim tax benefits individually based on ownership and repayment share, subject to joint home loan eligibility and applicable income tax limits.

Is it possible to convert an individual home loan into a joint home loan?

 

Yes, some lenders allow conversion by adding a co-applicant, provided the revised joint home loan eligibility criteria are met and documentation is updated.

What happens to the joint home loan if one borrower passes away?

 

The surviving co-borrower becomes responsible for repayment. A loan protection insurance can help manage this risk while preserving the benefits of joint home loan commitments.

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