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Applying for a joint home loan with a spouse, sibling, or parent is becoming a popular choice among homebuyers in India. The main attraction lies in the increased loan eligibility, shared repayment responsibility, and additional tax benefits. However, financial experts advise that before taking this step, borrowers must carefully evaluate the responsibilities and potential risks involved.

Why Joint Home Loans Are Gaining Popularity

In recent years, more families have started opting for joint home loans. Couples and siblings often choose this route as it not only boosts the loan amount but also helps distribute the repayment burden. According to financial experts, the biggest advantage of applying jointly is that both applicants can claim separate tax benefits, which reduces the overall financial load.

Moreover, having two borrowers gives lenders greater assurance of repayment. If one applicant has a strong credit history, the chances of securing a better interest rate also increase. This helps reduce the overall cost of borrowing in the long run.

Shared Responsibility Until Loan Closure

Atul Monga, CEO of Basic Home Loan, explains that applying jointly with a family member such as a parent or sibling reflects mutual trust within the household. However, this comes with added responsibilities. Both co-applicants are equally accountable for the repayment until the loan is fully cleared.

Banks and NBFCs also evaluate whether the co-borrowers share similar financial goals before approving the loan. Clear documentation, open communication, and financial transparency are key requirements to ensure smooth repayment without conflicts.

Be Cautious If Parents Are Close to Retirement

Experts strongly recommend avoiding joint loans with parents who are nearing retirement. This is because their post-retirement income may not support long-term repayment. Instead, borrowers should choose co-applicants whose future goals align with theirs and who have stable financial conditions.

Munish Jain of Capri Global highlights that joint home loans offer multiple benefits: higher loan amounts, better interest rates, and savings on EMIs. When spouses apply together, the loan tenure can extend up to 20 years, allowing more flexibility in tax planning and repayment.

Interest Rate Discounts with Strong Credit History

One of the major advantages of joint loans is the possibility of reduced interest rates. If the co-borrower has a strong credit score, lenders are more likely to offer lower interest, thereby cutting down the total repayment amount. This benefit makes joint borrowing especially attractive for couples looking to buy their first home together.

Sumit Sharma, founder of Radian Finserv, notes that applying with a spouse or parent is the most common option. Along with better repayment flexibility, this also provides a sense of financial security to lenders.

Risk of Default by One Borrower

While the advantages are compelling, borrowers should also understand the risks. In case one co-borrower fails to contribute due to financial constraints, the other must take full responsibility for the EMI payments. Failure to manage this can lead to defaults, affecting both applicants’ credit scores.

This is why financial advisors stress the importance of clear discussions before signing up for a joint loan. Borrowers must ensure they are ready to handle the repayment even if their co-borrower cannot contribute.

Final Word

A joint home loan can be an excellent tool for increasing loan eligibility, saving on taxes, and reducing overall costs. However, it requires strong financial discipline, clear agreements between co-borrowers, and long-term planning. Before applying, carefully assess the repayment capacity of both applicants, consider future financial changes such as retirement, and ensure complete transparency.

Only after weighing both benefits and risks should you decide whether a joint home loan is the right step for your home-buying journey.

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