4,80,000 people visited this section in last 30 daysApply Online

Get Cashback of Upto ₹ 1,000* on Loans Apply Online

MyLoanCare Customer Ratings - 4.5/5.0 Apply Online

5 reasons why Home Loan Top-up is better than a Personal Loan

2021-06-23
3 Min Read
Author - Sanyam Jain
5 reasons why Home Loan Top-up is better than a Personal Loan
210 views

At some point in time, we all need some funds for expenses that are either unforeseen or are unplanned. Although there are numerous options, it is important to know what is the best option available. For an existing Home Loan borrower, the best option to get extra funds is to secure a Top-up loan rather than opting for a new personal loan.

There are several reasons why Top-up loans are better than Gold Loan or Personal Loan .

Let us look at the top 5 benefits of Top-up Home Loans:

  • Funds with no restriction on end usage

Top-up Home Loans do not have any sort of restriction on usage. A borrower can use this loan amount for whatever purpose he/she needs to - buying a car, remodelling the house, education costs, etc. This absence of end-usage restriction provides flexibility and makes it a much more desirable option than a loan against credit cards or a personal loan.

  • Lower interest rate

The interest rate of Top-up Home Loans is comparatively much lower than a personal loan or gold loan. The interest rate is almost equal to the interest rate on Home Loans, thus making it the cheapest credit option for an existing home loan borrower. While Personal loan interest rates range between 10.25% and 24% p.a., Gold Loan interest rates range between 9.5% to 26%. Compared to these, Top-up Home Loan interest rates range between 6.85%-9.4%.

  • Longer repayment tenure

Another major benefit of availing a Top-up Home Loan is the longer tenure of repayment. The tenure of a Top-up loan depends on the remaining tenure of the underlying home loan. For instance, if an existing home loan has a tenure of 12 years still remaining, then the borrower can avail a top-up loan with a tenure of up to 12 years. On the other hand, alternate options like personal loans have a tenure of up to 5 years. Since you get a longer tenure with Top-up loans, it reduces the EMI burden and lowers the EMI to quite some extent.

  • Higher loan amount

In the case of a personal loan, you can borrow an amount in the range of Rs 50,000 to Rs 40 lakhs, depending upon your income and repayment capacity. While the loan amount in Top-up Home Loans can go even over Rs 50 lakhs. So, if you want a large amount of money at an affordable rate, then a top-up loan is the best option.

  • Tax benefit

While the interest and principal repaid on a personal loan, a gold loan , or a loan against credit card are not qualified to give you any tax benefit, a home loan top-up can. Along with all the other benefits, a Top-up loan also provides tax benefits. This is especially effective if the loan proceeds are used for the construction or purchase of a new property.

A Top-up loan is undoubtedly a much better option than all the other credit alternatives. But one thing that goes against it a bit is the longer processing time.

While Loans against credit cards are usually disbursed within the same day and personal loans within 2-5 days, the processing time of top-up home loans takes about a week or so.

Despite a long time in processing and documentation, the benefits of top-up loans far outweigh the other options. Also, if you are a bank's home loan loyal customer (i.e. you are not a defaulter in paying the EMIs), your top-up loan application would be easily approved and disbursed.

Now that we know why Top-up loans are better, let us see what is the eligibility criteria for availing a Top-up Home Loan:

  • Consistent repayment record
  • Have already paid a minimum number of home loan EMIs

If your existing home loan lender does not give you a home loan top up, you can transfer your loan with some other bank offering a top-up loan facility along with a balance transfer.

Now, another question is: What are the documents required to apply for a top-up loan?

Let us find out:

  • Identity Proof: Passport, Aadhaar card, voter ID, PAN card, driving license
  • Income Proof: Salary slips for 3 months (in case of salaried applicants), bank statement and Passport-size photographs.
  • Address Proof: Rental agreement, passport, utility bills, etc.

Of all the options available, a Top-up home loan is the best. Since all the other options are far more expensive and do not offer the kind of benefits that Top-up does, it is probably time for you to go from What is a top-up loan to How to get a top-up loan. To know more about Top-up loan and/or to apply for a Top-up loan, click here: https://www.myloancare.in/loan/top-up-loan/

About Author

Sanyam Jain
Highly motivated and utterly skilled, a young and zealous writer trying to follow his passion for the love of English language.An actor, a singer and above all a writer, has written over 500 poems till date and wishes to publish his own works soon. With an experience of almost three years in content writing, Sanyam is working as an integral part of the content team at MyLoanCare.

What are you Looking for? Looking for a Loan? Looking for an Investment?

Trending Articles

Exciting Features Expected from WhatsApp in 2021
Exciting Features Expected from WhatsApp in 2021
READ MORE 2,456 VIEWS
WFH v/s WFO- Professional Life in the times of Covid
WFH v/s WFO- Professional Life in the times of Covid
READ MORE 1,835 VIEWS
Best YouTube Channels for Investments in 2021
Best YouTube Channels for Investments in 2021
READ MORE 1,736 VIEWS
How would you rate this Article?
Notification ×
  • Home Loan

    Home Loan at all-time low rates starting at 6.65%. Cashback of up to ₹ 1,000

    Apply Now
  • Personal Loan

    Instant Personal Loan starting at 10.25% with Cashback of up to ₹ 1,000.

    Check Offers
  • Gold Loan

    Instant Gold Loan starting at 9.50% with Cashback of up to ₹ 500

    Apply Now
  • Loan Against Property

    Best Loan Against Property Offers starting @ 7.20%. Cashback of up to ₹ 1,000*.

    Apply Now
  • Business Loan

    Collateral Free Business Loan Rates starting at 14.00% with Overdraft facility.

    Apply Now
  • Fixed Deposit

    AAA rated FDs with returns as high as 6.95%.

    Invest Now
*Terms and conditions apply. Credit at sole discretion of lender, which is subject to credit appraisal, eligibility check, rates, charges and terms. Information displayed is indicative and collected from public sources. Read More
Loader
Please wait while your information is being processed...