What to Know Before Co-applying for a Home Loan in India

Many borrowers choose co-applying for a home loan to increase approval chances and get a higher loan amount. But banks have strict rules on who can apply together, and both applicants share full responsibility for repayment.

With home prices rising in major Indian cities, many buyers depend on joint home loans to match eligibility requirements. Co-applying for a home loan allows the lender to consider both applicants’ income and credit history. This helps when one applicant alone cannot meet the bank’s income limit, credit score expectations or EMI servicing ratio. 

However, banks only allow certain relationships, and improper co-application can lead to tax issues, legal complications or loan rejection. Borrowers must therefore understand eligibility, ownership rules and repayment responsibility before applying jointly.

Who Does Banks Accept as Co-applicants in India?

Most Indian lenders allow only close family members or verified co-owners to join a home loan application. This reduces conflict risk and ensures clear property rights.

Read More – Here’s How Couples Can Exit Joint Home Loans in India
 

Banks follow these rules because co-applicants share equal repayment responsibility. Also, only co-owners can claim tax benefits under the Income Tax Act. A 2025 guide on home-loan approval by LoansJagat confirms that lenders prefer co-applicants with stable income and good credit history to support higher eligibility limits.

How Co-applying Improves Eligibility, Interest Rates and Tax Benefits?

When two people co-apply, their income is combined, and this directly increases loan size and repayment tenure flexibility. Financial studies from platforms like Paisabazaar (updated 2025) show that adding a second income can raise eligibility by 25 to 50 percent, depending on the lender.

Here are the key benefits:

Many Indian banks also offer special women-only interest rates, encouraging female co-ownership.

Important risk: All co-applicants are jointly and individually liable. If one person misses an EMI, both credit scores fall. Lenders may initiate recovery from either borrower.

How Joint Home Loans Have Evolved in India?

Joint loans became more common in the last decade with dual-income households increasing. Older guidelines published by The Economic Times in 2010 and updated in 2024 explained that only a small group of family relationships qualify for joint applications. 

Over time, lenders tightened rules, linking co-ownership directly with tax claims. Borrowers were advised that unless both names appear on the property deed, tax benefits cannot be claimed.

From 2023 to 2025, advisory platforms reported a rise in first-time buyers taking joint loans with spouses or parents due to loan eligibility pressure in metro cities. Reports also noted that many rejections happened because applicants tried to add non-owners or distant relatives, which banks do not accept.

Also Read – Kerala’s New Home Protection Law

What Lenders and Experts Say About Co-applying

Banks repeatedly state that co-applicants should be “close relatives with a stable financial relationship”. Home-loan advisors interviewed across 2024–25 financial publications also emphasise that co-owners must decide EMI contribution clearly to avoid disputes. 

They advise borrowers to discuss repayment responsibility, future changes such as relocation or income loss, and the possibility of ownership division before signing documents.

Conclusion

Co-applying for a home loan can boost eligibility, bring better interest rates and double tax benefits, but only when both applicants understand the rules. Borrowers should review lender eligibility, ensure both names appear on property papers and check credit health before applying jointly.
 

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LoansJagat Team

‘Simplify Finance for Everyone.’ This is the common goal of our team, as we try to explain any topic with relatable examples. From personal to business finance, managing EMIs to becoming debt-free, we do extensive research on each and every parameter, so you don’t have to. Scroll up and have a look at what 15+ years of experience in the BFSI sector looks like.