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Know the Benefits and Flip side of Co-Borrower In Home Loan

Benefits and Flip side of Co-Borrower In Home LoanThe earning capacity of the common man in India has not yet risen to extent that allows him to purchase a property with cash funding. Inflated real estate prices make it mandate for a buyer to take the help of a home loan. Getting eligibility for the home loan is not child’s play; you need to have a credit score that meets the threshold of the CIBIL and good repayment capacity to repay the loan comfortably. Missing any of these important credentials will end up in the rejection of the loan; this is the juncture where the necessity of the co- borrower raises in. Adding the co- borrower to your home loan application will enhance your home loan eligibility. Keep reading both the benefits and drawbacks of having the co- borrower in the home loan application and take an informed decision while making a choice.

 Can You Have A Co- Borrower To Avail Home Loan?

Know your co- borrower

You should understand the fact that, not everybody will stand eligible to be co- borrower of the home loan. It could be spouse, sibling or parent and child.  Anyone other than a spouse can become co- borrowers of the home loan only if they are co- owners of the property. Non-married couple and friends will not stand eligible to become co- borrower.

Benefits of having co- borrower

 There is no doubt that the co-borrower will help in a great way in enhancing the eligibility of the home loan. If your credit score is less than 750 points which are CIBIL threshold, your home loan application will be rejected. At this juncture adding a co- borrower with decent credit score will enhance your home loan eligibility for the home loan. If your credit score is 700 and the co- borrower credit score is 650. Your combined credit score will increase your home loan eligibility. Taking the help of the borrower improves your credit score too.

Tax benefits

While the co- borrower helps you by enhancing your home loan eligibility, they will gain a facility to enjoy tax benefits along with you on the home loan. Purchasing the home with the home loan will make you eligible for the tax deduction on the interest paid up to 200,000 and on the principal amount, you will get a tax deduction of 150000. These benefits will be shared to co- borrower in the ratio of the amount they have borrowed.


There is doubt in the fact that you will enjoy great benefits with the help of the co- borrower in the home loan but, when they delay or default the payment of the loan, it is going to affect your credit score too.  The lender has every right to claim the borrowed amount from if the co- borrower fails to pay it.  If there raises a legal dispute regarding the property, it takes very long time to settle down


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