Home Loan Co-Applicant: Buying a house is a dream in everyone's life. Many people save a lot of money for this. So many people are not able to save that much money. So in such a situation, they take a home loan. But while taking a home loan, you have to take care of many things.

So that you do not have any problem in repaying the loan. While taking a loan, many times people take the loan alone. So many times they also keep a co-applicant along. What effect does having a co-applicant have on your home loan application? And what is its benefit, let us tell you.

What is a co-applicant?

Co-applicant is that person. When you apply for a loan with a co-applicant in a bank or non-banking financial company, both the co-applicant and the applicant are jointly responsible for the loan taken. If you apply for a home loan with a co-applicant, then your chances of getting a home loan increase.

Who can be a co-applicant?

Banks and financial companies that take more loans have some guidelines for becoming a co-applicant. Like who can join as a co-applicant with the applicant. In this, husband and wife can join as co-applicants. Son and father can become co-applicants together. Unmarried daughters and father can become applicants. So along with this, siblings can also become co-applicants. But no one below 18 years of age can join as a co-applicant with the applicant.

Benefits of having a co-applicant

Chances of getting a loan increase

If you want to take a loan, then if you file a loan application with a co-applicant, then your chances of getting a loan increase. Because the bank or company giving the loan looks at the income of both you and the co-applicant while reviewing your loan application. Due to this, you can also get a higher loan.

A credit score is also beneficial

Almost all banks and loan companies check the credit score while giving a loan. If you have a co-applicant with a good credit score, then it is not very difficult for your application to get approved. And this increases your chances of getting a loan even at a lower interest rate.

The financial burden is halved

According to Paisa Bazaar's Communication Manager Malvika Singhal, the biggest advantage of having a co-applicant while taking a home loan is that there is not much financial burden on you. Both the applicant and the co-applicant are responsible for repayment. Due to this, the EMI is divided equally between the two. And there is no problem in repaying the loan.

Tax is saved

Under Section 80C of the Income Tax Act, the applicant and co-applicant taking a home loan are eligible for tax exemption. According to the rules, both the applicant and co-applicant applying for a home loan get a tax exemption of up to Rs 1.5 lakh under Section 80C. Along with this, an additional exemption of up to ₹ 200000 is given under Section 24 (B).

Female applicants get an exemption

If there is a female applicant with you while taking a loan. So you can get a loan at a low interest rate because many banks and companies give discounts to women. Due to this you can save a lot in the long run.

Loan tenure can increase

If the co-applicant taking a loan with you is young. Then the tenure of your loan can increase. Due to which your EMI will be made. However, due to this you will have to pay more interest on the loan.

Disadvantages of having a co-applicant

While there are advantages of having a co-applicant while taking a home loan, there are some disadvantages too. If two people take a loan together, then the responsibility of repaying the loan also falls on both the people. But if any one of them misses any EMI of the loan. Then the credit score of both is affected. But if you have not made the right person a co-applicant. Then you may have to face the consequences. That is why be careful while making a co-applicant.