When you’re in need of finances to renovate your home, a Top-Up Loan is the best choice. You can avail a Top-Up Loan on the existing Home Loan on the same property.
Current customers are privy to availing a Top up loan. Avoid going for a Personal Loan, and paying high interest. The Top-Up Loan can finance your home renovations and is offered at a low-interest rate.
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How does a Top-Up Loan work?
This type of loan allows you to take the additional loan over and above your current loan. Existing Home Loan borrowers are eligible to avail a top up loan. The usual tenure of Top Up loans is ten years. You can get one, but only after a few years since taking the Home Loan. Your repayment history of the Home Loan determines whether or not you are eligible for a Top Up Loan.
Top-Up Loans work as margin money. The existing Home Loan borrower has repaid his EMIs. This reduces the outstanding balance. A Top-Up Loan is margin money extended to the borrower.
Who is Eligible for a Top-Up Loan?
You can only take a Top-Up Loan to repay an existing Home Loan. To check the eligibility criteria for a Top-Up Loan, it is best to verify with banks, as each one lays down its own.
A Top-Up Loan can be taken from the bank which has given you a Home Loan. If the Top-Up Loan is rejected, you can change your Home Loan account to another lender. But better terms can be availed only if you have an impeccable repayment history.
The maximum loan amount that you can get on a Top-Up Loan depends on three factors. These are:
The upper limit on a Top-Up Home Loan plus the outstanding Home Loan balance should be more than 70% of the market value of the property.
The advantages of a Top-Up Loan
A Top-Up Loan does offer a good number of benefits in addition to low-interest rate and minimum paperwork.
How to Apply for One
You need to apply to the bank which holds your Home Loan account. You need to submit your salary slips and latest bank statements. Usually, Top-Up Loans are approved and disbursed within 48 to 60 hours.
Banks differ in their criteria for approving Top-Up Loans. Some banks offer Top-Up Loans to existing customers who have repaid 6-month loan instalments. A few banks need you to have paid at least 12 EMIs to be eligible for Top-Up Loans.
Top -Up loans are the best choice if you need cash to finance your home renovation or meet your child’s education expenses. They offer a quick processing time, low-interest rates, and a relatively long repayment period. This makes Top-Up Loans an attractive financing option. If your home renovation is on the cards and you’re midway through your Home Loan, apply for a Top-Up Loan right away.