Top Up Loan - A Good Option than Gold or Personal Loan

First things first!

Do you have an active Home Loan account? Do you have the need of some urgent money to cover many needs of your life? Are you considering taking credits from your friends and family or a personal loan?

Take a pause as your existing Home Loan account can help you solve the issues of urgent monetary needs. Yes, we are talking about the Top-up Loan which is available over and above your ongoing Home Loan.

Let’s know a Top-up Loan is a good option when compared to other forms of finance/debts.

What is a Top Up Loan?

The Top Up Loan is a unique facility offered by leading lenders which can help you cover all financial needs in life. The facility is available alongside your active Home Loan account with the lender. Even if you do the Home Loan balance transfer, the Top Up Loan facility will still be available for you to avail of.

The biggest thing about a Top Up Loan is that it is a big-ticket loan and can award you up to Rs.50 lakh so that you can use it for any needs.

What are the Benefits of the Top Up Loan?

Since a Top Up Loan is given considering your Home Loan account, you need not so many formalities to get the loan offer. Lenders consider your Home Loan collateral as the security for the Top Up Loan which saves the hassle of submitting anything extra.

What’s more, the charged interest rate on the Top Up Home Loan is only 1-2% more than your ongoing Home Loan which is lesser compared to a personal loan (12%-20%).

Another advantage of availing a Top Up Loan is that you can also enjoy an extended loan tenor so that you can repay the loan in smaller EMIs and manage your finances.

However, if your Home Loan has only 7-8 years left, for example, you won’t be able to get a Top Up Loan tenor more than 7-8 years. Therefore, financial experts suggest applying for a Top Up Loan on Home Loan while your Home Loan is still new or a few years old.

Availing a Top Up Loan also helps you serve many purposes in life that demand some decent flow of money. You can utilize a Top-up Loan for purposes such as:

• To consolidate existing debt

• Carry on with repairs and home renovations

• Add a garage or new factory

• To buy new furniture

• Buying an asset for personal and business needs

• Anything else as per your needs

What about the Top Up Loan Application?

Most of your extensive formalities are already in place after you have availed of the Home Loan from a lender or done the Home Loan transfer facility. Hence, you need not worry about the formalities included in the Top Up Loan application.

The documents and formalities done with your Home Loan/balance transfer are enough to process it without hassles. The only thing that lenders want to confirm is whether you have the required repayment capacity to repay the Top Up Loan or not. You need to maintain a higher Credit Score and consistent income to convince the lender.

The Bottom Line

If you need some extra money, you should not avail of a personal loan and pay a higher interest rate. If you have the Home Loan account active, use it to grab a Top Up Loan at lower rates and get set go!