Joint Loan: Nowadays banks offer many types of loans, including personal loans, home loans, and many more. These loans can help reduce your burden of life, but a loan is only right if you are getting it at the lowest interest and easy EMI.
Did you know that a joint loan can give you great benefits on both these fronts? Especially if you take a loan with a woman, its benefits increase even more. This article will tell you in detail about the amazing benefits of a joint loan so that you can make a wise financial decision.
Why taking a loan jointly is better
A joint loan is when two or more persons apply for a single loan and share the responsibility of its repayment. This can include close relatives such as spouses, siblings, parents, and children. It is a powerful tool that provides you with more financial strength than you can have alone.
Higher loan amount
If you opt for a joint loan, you can increase the loan amount significantly. This is because the bank looks at the income of both persons and offers the loan based on this combined income. This increases your loan-giving capacity manifold. If you dream of buying a bigger house or planning a big investment, a joint loan can help you reach that goal, which is not possible alone.
Great discount on EMI and interest
One of the biggest benefits of taking a joint loan is that it can significantly reduce your monthly expenses.
Loan with a woman
If you take a joint loan with a woman like mother, wife or sister, the interest rate is less. Many banks offer special discounts on interest rates on loans taken with women. If you are taking a home loan, taking a joint loan with a woman is even more beneficial. This is also a part of the government’s efforts for women empowerment.
Lower EMI burden
Due to the reduction in interest, your equated monthly installment also reduces. Also, your EMI payment is also divided into two parts, which significantly reduces the EMI burden. This helps you manage your monthly budget better and save for other financial goals.
Improvement in credit score
Timely repayment of a joint loan helps improve the credit scores of both applicants. Even if one applicant has a slightly weaker credit score, the other applicant’s good credit score can increase the chances of getting a loan. Also, successfully repaying a joint loan makes it much easier for both you and your co-applicant to get loans at better interest rates and terms in the future. It strengthens your financial credibility.
Tax Benefits
In the case of a joint home loan, both you and your co-applicant can claim separate tax benefits under the Income Tax Act. For example, the deduction on principal repayment under Section 80C and on interest repayment under Section 24(b) can be availed by both, provided both are co-owners of the property and are contributing to the repayment. This helps reduce your total taxable income, thereby increasing your net savings.