How can a co-borrower increase your home loan eligibility?

Common loans can be taken to increase the chances of getting a loan on a dual basis. A co-owner is an additional person in the joint loan which the borrower takes. Adding a co-owner helps an individual borrower reduce their burden and thus increase the eligibility of the loans. Also, the credit score of both individuals is taken into consideration for the approval of the loans. If one of the borrowers is falling short of the credit score, then the credit score of another borrower can be considered, and based on that, the loans can be approved. The loans can be jointly taken to share the burden of the loans. Thus the answer is yes, co-owner can increase the eligibility of the home loans. In the case of joint loans, the combined salary of both the applicants is considered, and accordingly, the loan amount is approved as per the eligibility. The loans can be taken by a co-owner on a joint basis for a tenure, depending on the age of the second borrower. The loans can be availed for a maximum tenure of 30 years. The loans are approved up to the age of 60 or else retirement ages of the salaries person, whichever is early.

The EMI calculator helps to find the eligibility of the loans for the borrower by entering the details related to the age of the borrower, the salary of the borrower, interest rates being charged by the lender & the tenure for the loans. The loans eligibility increases on the basis of the joint basis of the application being given to two working persons. The applicants have to provide income proof like a salary slip or bank statement for the approval of loans. The loans can be approved with higher eligibility in the case of co-owner as both the person’s earnings are considered. The payment of the installments can be made by any of the borrowers either or after being approved. Also, the tax benefits can be taken by both the borrowers under income tax act 80C. The combined joint loans help in ownership of both the persons like say the husband & wife together can enjoy the ownership of the property. The loans help the borrowers buy a house in an early stage without having sufficient savings. The interest rates on joint home loans are the same as that of the loan taken on a person.

Following are the benefits in which the eligibility of the borrower can be increased due to co-owner

· Increase in the eligibility of loan amount

Bank prefers to provide loans up to 40-50% of the monthly salary as loans. Thus when two persons are applying for the loans, then in that case, the salary of both the persons is taken into consideration, and accordingly, the loans can be approved. For example, if one person of the family is earning an income of Rs.60,000 per month and the other is earning Rs.40,000, then, in that case, the bank may consider both person’s joint income and accordingly may approve loans of around 40-50 thousand as monthly installment.

· Lower age is taken into consideration

If the age of the person is 45 years and the other person’s age is 42 years, then, in that case, the lower age is taken into consideration. Accordingly, the loans can be approved for tenure, and accordingly, the loan is being approved for the age up to 60 years or the retirement age, whichever is early.

· Tax benefits

In the case of the joint loans, both the applicants can take benefits of the income tax exemptions under income tax act 80C as both the persons have the liability of the repayment of loans.

· Higher chances of loan approval

The bank is taken into more confidence of repayment of loans in case of joint owners as in case of job loss, death of the applicant or else default due to other financial problems cannot happen as in case of loss suffered by one applicant another may compensate.

Hence, if the co-borrower is present, the eligibility of loans can be increased as the income of both individuals is taken into consideration. The loans jointly taken can thus help in availing a higher amount of loans from the lender. Also, the bank has security for the loans as in case of one person is unable to pay the loans, another may compensate.