Top-up Loan or Car Loan

Car Buyers, Wait and Think, before opting for a car loan. Taking a car loan to buy a car may not be the best option for you. For customers who have an existing home loan running, availing a top-up on their current home loan to finance their car has multiple benefits. The benefits are even higher for second-hand car buyers.

• You get lower interest rates than that on a car loan: Top Up on home loans are relatively cheaper than car loans even as they are available at 0.5-1% higher interest rates than that on the home loans.
• You pay low and affordable EMIs: Top up on home loans are available at home loan repayment tenure which can go up to 25 years. Car loans are shorter tenure loans of up to 7 years. Lower interest rates and longer term reduce your EMIs and monthly obligations.
• No need to hypothecate your car: The property that you pledge for a home loan acts as collateral security for the top-up loans as well. You do not need to hypothecate your car to get a loan.
• Easy loan processing:Top-up home loans are quickly processed as your loan is already approved, and the bank will do only a few additional checks.
• Best Option for Used Car Buyers:You save more if you are buying a used car where financing is available at even higher rates.

Choosing a home loan top-up over a car loan sounds like a smart and plausible idea that would prove to be easy on your pocket in more ways than one!

✅Which one is better top-up on a home loan or new car loan?

Home Loan Top-up can be considered a better choice for financing a car as it offers a lower rate of interest than car loans.

✅What are the benefits of a top-up loan?

A top-up home loan has a lower interest rate, has longer repayment tenure and fast processing.

✅Should I take a car loan or a top-up loan for the financing of a used car?

Top-up loans can help you save more as the interest rate for used car loans is much higher if you avail a car loan.

✅Can I get tax benefits on a top-up home loan?

No, under sec 24 of the Income Tax, you can only get a tax benefit on top-up home loan if you have taken a home renovation loan or extension.