What Is Top Up Loan?
As the name refers to, this specific type of loan is an additional loan that is charged particularly on your existing home loan or a personal loan. If you are in the procedure of repaying the amount of your loan and if you are already paying the EMIs timely every month, then you are eligible to avail a top-up loan at the same interest rate similar to your loan that is already ongoing or existing. It will take a little documentation and a quick approval process. It’ll be good to go in no time!
Let’s get into insight and know more about the Equated Monthly Instalments:
Features And Benefits Of Top-Up Loan
Reduce The Burden of Loan
It is no doubt why Indians are fond of top-up loans. Majorly the reason being that it allows oneself to pay in a consolidated form. You can easily pay the amount of your loan and the rate of interest that is applied to that will also be reduced. The individual is eligible to get this top-up loan and that will be applicable on home loan and personal loan or on any other debts that are pending. This will also help you in getting rid of all the crises and the burden that multiple loans have created pressure, all at the same time.
Minimal Documents Required
There is not a lengthy process in between, as many banks in India rather have a simple and minimal documentation for easy-going top-up loans. Why? Certainly, because the customers usually have a well established relationship with the previous banks. They are loyal and maintain a good credit history with the respective banks. If you are still not sure of what amount of top-up you must apply, don’t worry as you can take help from the top-up loan calculator. This will give you a rough idea of the approximate amount, how much you need and what will be the exact EMI amount. You can also contact HDFC top up loan for understanding their policies.
The banks have a close-knit relationship with the top-up loan applicants. Although, this process is quite simpler and the approval methodologies are quite simpler. You don’t need to worry about a single thought as it is effective for a personal loan and a home loan. The banks are aware of the credentials of the applicant, and so, the procedure also does not take much time to resolve. It is smooth to access the funds quickly for people who are in need. Yes, it can be known as emergency funds too!
Make sure that you understand and know the interest rate of the loan, be it any type. This is one of the most crucial fundamentals that one must be aware of before the application! Most of the lenders in our country attract the interest rate of the top-up loans in comparison with the other unsecured loans. This stands as the primary reason why many people opt for a top-up loan as it helps them manage their repayment in the most effective and efficient ways possible. While many people have an option between the floating or a fixed interest rate as the lenders allow them to choose amongst the top-up loan applications.
No Collateral or Security Needed
Many Indian lenders do not allow the top-up loan applicants to provide any security or a collateral against the amount they have borrowed. Nor they need any guarantor in between. This helps in easy, and a streamlined process of the loan and also tasks less time to process the application. IT is better in disbursing your funds. Ultimately, you don’t need to worry about losing any assets while applying for a loan.
Longer Repayment Duration
In most case scenarios, banks are the party that decides upon the duration of the repayment for top-up loans. It actually depends upon the remaining balance that one is applying for. Also, the time period is a bit longer as compared to the personal loan. This is yet another reason why people go after this loan. However, you must be aware that the tenure time of the top-up loans is more than the authentic loan. For more details, you can choose the top-up loan EMI loan to acquire accurate results. This will clear all your doubts and what amount would you need to pay every month until the duration of the loan ends.
Balance Transfer Facility
There can be a possibility that the lender from which you have chosen your personal loan or home loan may not offer top-loan, so in such cases, you can shift your loan from one lender to another who assures and provides the facility of a top-up loan. As that is not just a mere benefit, but an advantage that you will be able to meet all your financial requirements. It will give you an additional loan which is full of advantages!
What is the eligibility criteria to obtain a top-up loan?
We have created a list of all the factors that are desired in the eligibility criteria, where one can apply for a top-up loan. Have a look at few!
- You already have a home loan with a bank
- You should not be a defaulter. Your EMI repayment record of the past one year should be good enough. Timely payments should be made
- The credit report must be in your favor
- You have made a valid mortgage in the name of the bank
Now, it’s time for some FAQs:-
Here are a few common questions that are usually asked about top-up loans:
Who can apply for a top-loan?
Those who are looking for an extension of home loan, home improvement loan or an existing personal loan.
What is the tenure of a top-up loan?
The time duration can range up to 20 years or until the balance tenure of the original home loan.
What are the documents required to apply for a top-up loan?
- Proof of identity: Passport, Aadhaar card, voter ID card, PAN card, driving license
- Salary slips for 3 months (in case of salaried applicants)
- Proof of address: Rental agreement, passport, utility bills, etc.
- Income details in the bank statement for 3 months
- Passport-size photographs