Outlook Money
A joint home loan is the initial move towards achieving the dream of owning a home. Opting for a joint home loan can offer shared financial responsibility and enhance borrowing power. Nonetheless, it's important to understand the benefits and possible disadvantages of this option before making a decision.
Higher Loan Limit- Applying for a joint home loan allows applicants to borrow a larger amount due to their combined incomes. Lenders are more likely to approve a bigger loan when they consider the collective financial stability of all borrowers.
Dividing the EMI payments among several borrowers, a joint home loan eases the financial load, making homeownership more attainable. This can be particularly beneficial for individuals with different income levels or those who prefer a more balanced financial strategy, as it can make managing payments more affordable.
When one applies for a joint loan, there are chance of more accepting the loan application. This also maximizes the tax savings.
Joint loans often become a burden, this includes the repayment of the loan. If one borrower fails to repay the loan, or make payments, the other must cover the entire amount, which can create financial strain.
A borrower might be unable to keep up with loan payments due to unemployment or serious health problems. This could jeopardize the financial stability of both borrowers, potentially resulting in loan defaults and causing stress for all involved.
Other disadvantages include relationship issues and impact on credit scores.
Compiled by Syed Muskan