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All You Need to Know About Top-Up Loan on Home Loan

michealanderson March 19, 2020

As per reports, the rise in the real estate industry of India is primarily due to the increase in the number of home loans disbursed in the country. In the final quarter of the financial year of 2018, the growth rate of home loans was approximately 17.4%, which indicates that a major portion of the Indian population is opting for these credits to purchase a residential property.

Moreover, homebuyers can also avail the facility of top-up loans, offered by various financial institutions across India. These loans provide additional security and stability to their finances during the vast repayment tenor of home loans.

What is a housing loan top-up?

It is an additional source of financing which homebuyers can avail on their existing housing credits. This type of loan is immune to any end-use restrictions which help customers in using the funds as per their urgent requirements.

You can avail a substantial top-up loan amount of up to Rs.50 lakh at an affordable interest rate from almost every reputed financial institution and NBFC in India.

A top-up loan can be obtained by any individual who has already opted for a housing loan. As an existing borrower, you can contact your financial institution to avail of these loans or consider this form of credit while opting for a housing loan balance transfer.

Benefits of home loan top-ups

NBFC in India.

A top-up loan can be obtained by any individual who has already opted for a housing loan. As an existing borrower, you can contact your financial institution to avail of these loans or consider this form of credit while opting for a housing loan balance transfer.

Benefits of home loan top-ups

Top-up loans comprise various features and benefits which adds to the convenience and financial comfort of a homebuyer, which are –

  • Financial stability

The most popular reason behind borrowers to avail of a home loan top-up is to reduce their financial burden. The repayment tenors of home loans are generally quite long for the substantial amount disbursed. During this period, borrowers might face any financial emergency and might require additional funds to deal with such a crisis.

Hence, availing a top-up loan helps in relieving you off any financial stress. This type of loan does not comprise any usage restriction; so, customers can use the funds to deal with any situations.

  • Zero documentation

As home loan top-ups are additional forms of credit, borrowers are not required to go through extensive documentation or any need to mortgage the property. A major portion of your home loan application process is spent on the verification of your KYC documents and property-related details.

  • Fast disbursal

Your home loan application will not have been approved if you failed to meet the eligibility criteria set by your lender. So, when you apply for a top-up from your existing lender or your new lender during a home loan transfer, you can avail a fast disbursal of the loan.

  • Affordable rates of interest

Financial institutions offer home loan top-ups at affordable interest rates. If you face another financial crisis during your housing loan repayment, it is advised to avail of a top-up loan instead of a personal loan, which has a relatively higher interest rate.

  • Flexible loan tenor

The repayment tenor of your home loan top-up depends on the following factors –

  1. Amount of funds you are yet to repay on your existing home loan.
  2. The top-up loan amount you have applied for.

Moreover, the tenor of your top-up loan will never be more than the repayment period of your existing housing loan.

Hence, from the above discussion, you get to know about home loan top-ups and how beneficial they are compared to unsecured personal loans with relatively high-interest rates.

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