Need more money after taking a home loan? Opt for a ‘top-up’ loan!

Already paying EMI, but still need more money? Opt for a Top Up Loan. Take a look at the eligibility criteria, tenure & how you opt this loan with IIFL.

22 Feb,2018 00:45 IST 1202
Need more money after taking a home loan? Opt for a ‘top-up’ loan!

Having taken a home loan, often there are times in life we are in desperate need of funds. In such situations, we try borrowing money from friends and family and if help doesn’t come from them you go for a bank loan. There are many bank loan options available in the market. Personal loans are easily available and they are always at your disposal but personal loans have higher interest rates as compared to other loans available in the market.  There is also a type of loan which we can opt called a “top-up” loan.

What is a top-up loan?

A top-up loan is a kind of loan which is offered to you over and above an existing housing loan. It is different from a personal loan. It really helps you when you have a financial crisis or need money to fulfill your requirements like home renovation, medical expenses or paying your educational fees

When do we need a top-up loan?

When a person buys any property, it generally involves taking a home loan and also exhausting a substantial amount of one’s savings, to fund the margin money. Moreover, homebuyers prefer the maximum possible loan amount, to get the best home. Sometimes, a situation may arise, where you need a substantial amount of money, while you are also servicing an existing home loan. There is an option called a ‘top-up home loan’, to deal with such situations.

Eligibility criteria for a top-up loan:

The Top-up loan can be sanctioned on the ground of repayment track records. You can always approach another lender, to reassign existing loan including a top-up. For, you have to espouse all documentation and KYC formalities with the new lender.

Tenure of the loan amount:

The Top-up home loan tenure generally has 15 years in the upper time-limit.

Loan Amount:

The maximum amount that you can avail as a top-up varies from lender to lender. Some lenders check the combined of the proposed top-up loan and outstanding on your home loan, to the original amount that was approved for the home loan, subject to the margin constraint and your income level. Whereas others calculate overall loan eligibility after taking into consideration your present gross earning and a margin of around 25%, on the basis of current property value.

What are the benefits of a top-up loan?

1. No additional collateral or security requirement

A top-up loan is offered on your existing home loan; hence there is no need to provide additional mortgage and other details again.

2. No precondition on usage of funds

One can use the money form the top-up loan as per your requirement and convenience. The lending housing finance company will not ask you for what purpose are you taking this loan.

3. Low-interest rate as compared to gold loan or personal loan

One can avail a Top-up loan on Home Loan at an interest rate much lower than most , such as on a pure personal loan or gold loan. Moreover, the tenure of a top-up loan is generally higher than on a gold loan or a personal loan.

Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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