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• What about joint home loan EMIs after divorce?
• From whom does the bank collect money?
• What exactly does the rule say? find out

Divorce And Home Loan : Everyone dreams of having their own house but to fulfill this dream they have to take a loan. It takes a long time to repay the loan. If a husband and wife take a loan and later divorce, “ And Home Loan

Even if two people divorce and legally separate, it does not mean that a joint loan agreement or financial agreement with a bank or other financial institution automatically ends with the divorce.

What is the rule of joint loan?

Joint loans are taken jointly by husband and wife; Therefore, both the spouses remain legally and financially responsible for repaying that joint home loan even after divorce. Even if their personal relationship ends, both of them remain 'co-borrowers' in the eyes of the bank. Unless the loan is fully repaid or the bank officially agrees to modify the agreement, the terms of the signed loan agreement remain equally applicable to both of them.

What options are available for loan repayment?

After divorce, either of the spouses can choose to own the house and carry the balance of the loan in their name. For this the bank checks the source of income and 'credit score' of the person and then he is given this permission.
Another option is compromise or settlement. Both spouses can mutually decide to sell the house and use the proceeds to pay off the bank loan in full, ending their debt obligations and also the loan.

Which options are easier?

If there is any surplus left after paying off the loan, it can be shared between both the spouses. Options like these can be used. If both the parties are willing, they can continue to pay the EMIs according to their share till the loan is fully settled.

It is clear that divorce does not change the terms of the loan agreement. Therefore, it is very important to have a mutual legal agreement while taking a joint home loan; It should clearly mention who will pay the EMI and who will have the ownership rights of the house in case of relationship breakdown or dispute. While taking a loan, one should always consider whether one has the financial capacity to pay the entire EMI alone in case of an emergency. Only then can one be saved from such a situation.