What Are the Liabilities of a Co-Home Loan Applicant in a Home Loan?

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oi-Sunil

By Sunil Fernandes

Published: Monday, February 2, 2015, 8:44 [IST]

Today, with several couples working and managing the family, especially young couples, several of them have joint home loans. Joint home loans come with several advantages including ability to get an extra loan based on the income of the spouse.

It also gives both the co-applicants of the home loan tax benefits. In fact, you get tax benefits under Sec 80C of the Income Tax Act for the principal amount paid to the tune of a maximum of Rs 1.5 lakhs, while you get tax benefits of up to Rs 2 lakhs for the interest paid on the home loan. Both the limits were enhanced in the Union Budget of 2014-15.

This is wny many individuals choose co-home loans.

What are the liabilities in a home loan for a co-applicant?

Home loans while coming with tax benefits, also come with liabilities. For example, in case of death of one of the holders, the other co-applicant has to make sure that he bears the entire responsibility for payment of the balance of the loan. Therefore, when taking a loan it is very important that the co-applicants ensure that they are able to pay the entire amount in case of absence of one of the applicants.

Now another important thing to note is that if you are a co-applicant as well, your CIBIL score will be accounted for. So, in case you fail to pay up, due to the demise of the co-applicant or for whatsoever reason, you are likely to have a bad credit score. What this means is that you would face challenges in taking loans for the future.

Conclusion

The most important thing to remember when taking a home loan is that in case there is a difficult of one of the applicants to honours the commitment the other co-applicant should be able to shoulder the responsibility.

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