Top-up is a provision that allows you to add or top up a specified amount to your existing home loan amount. Those who currently have a house loan and make on-time payments can apply for a top-up loan. Various private and nationalised banks provide top-up loans to their loyal customers.

Top up loan

A top-up loan is a service offered by banks, housing finance firms, and other financial organisations that allow you to borrow money in excess of your house loan.

Procedure of applicant

To apply for a fast personal loan, you must provide or upload the necessary documentation. The lender evaluates the documentation you supplied and determines your eligibility. Your loan amount is disbursed once they have determined your creditworthiness.

When you should opt for a top u loan?

• When you currently have a personal loan and want more finances. To be eligible for extra funds, you must have paid a certain number of EMIs on your present loan.
• You want to pay your financial obligations without having to go through the effort of obtaining new papers.
• When you demand quick finances for personal, business, or incidental expenses.
• Top-up loans are also favoured when seeking debt consolidation rather than maintaining several loans.

Pros and Cons of top-up loan

PROS

Fast Loan - Because the bank already knows your repayment history and other personal qualifications, the lender does not demand any more documentation. As a result, top-up loans can be provided promptly and without the need for any further documentation.

Low-Interest Rates - The main advantage of a top-up loan is that it may be obtained at a lower interest rate than a personal or gold loan. The interest rates on ordinary personal loans range from 11 to 24 percent, while the interest rates for top-up loans are the same as those on house loans.

Tax Advantages - Under Sections 80C and 24 of the Indian Income Tax Act, the top-up loan gives additional tax advantages on funds used for house reconstruction or restoration.

Reliable source - When more funds are needed, a top-up loan is a dependable financial source. In an emergency, it is a quick and dependable answer.

CONS

Only for Existing House Loan Clients - This loan is only available to existing home loan customers. Furthermore, if a person has a terrible credit history or a default under the name, a top-up loan cannot be obtained.

Hefty EMIs - By withdrawing more funds from the house loan, the usual EMI will also rise. It will have an additional negative impact on the budget.

Limited - A top-up loan may only be used for a set amount of money, which varies per bank.

What are the requirements for obtaining a top-up loan?

The qualifying criteria for applying for a top-up loan are listed below:

• You already have a house loan with a bank.
• You should not make a sloppy mistake. Your EMI payments history from the previous year should suffice. Payments must be received on time.
• The credit report must be favorable to you.
• You have a legitimate mortgage in the name of the bank.

What is the tenure of a top-up loan?

The top-up loan is accessible for up to 20 years, or until the initial house loan's total is paid off.

What are the documents required for a top-up loan?

• KYC
• Address proof
• Income proof
• Property papers
• Business proof
• Bank statements

An updated bank statement confirming your current home loan payments is a necessary document for a top-up loan. Before you apply, gather information on the papers necessary for a Home Loan and submit them as soon as possible to expedite the approval process.

How will be my EMI calculated on home loan top-up?

Your EMI for the home loan top-up is computed using the interest rate specified at the time of loan approval. Every month, you will be assigned an EMI payment amount, which will be debited straight from your bank account.

Will a home loan top-up affect my credit score?

All loans, no matter how little or large, have an impact on a customer's credit score. However, whether a consumer has excellent or bad credit is determined by their repayment behaviour, not the number of loans they have.

In conclusion:

Most lenders provide top-up loans as a popular option. While the eligibility and paperwork criteria differ, these loans are unquestionably beneficial. Money View provides top-up loans to prestigious borrowers that have demonstrated an outstanding credit history and loan payback. While the interest rate and paperwork requirements are lower, in order to be eligible for a Money View top-up loan, you must have previously obtained and repaid a Money View personal loan.