Why to Choose Top-up Home Loan for Meeting Emergencies?

A top-up loan, as its name suggests, is an offer of getting additional loan on an existing home loan. The interest rate applicable to top-up home loan is the same as home loan rate or slightly higher rate.

These loans are not given for any specific purpose and can be used by the borrower as per his own requirements. These loans are available to the home loan borrowers after a few years of the original loan.

A Top-up loan can be utilised in repaying an existing expensive loans, for home renovation, for medical emergency, education purpose, for purchase an asset or even for marriage purpose. You can use it without any hassle.

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Prerequisites for Top-up Home Loan

• You should be an existing home loan borrower
• You must carry a satisfactory loan repayment track record
• You must have the financed property in your name

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Valid Reasons to Choose Top-up Home Loan for Meeting Emergencies

Now a question may come to your mind that when other options such as loan against insurance policy, gold loan, personal loan, loan against PPF, etc. are available then why to choose top-up home loan for meeting emergencies? If you are an existing home loan borrower then you must go through the reasons as to why should you opt for Top-Up Loan instead of any other kind of loan:

(1) Immediately Available due to Quick Processing

Top-up loan is processed very quickly as the lender already has all your data captured in their system. They make fast approvals.

(2) Available at Lower Interest Rate

Top-up Loan is available at lower interest rate as compared to any other kind of loan. You will get this loan at either the same as home loan rate or slightly higher rate. You will have to pay lower interest on loan amount.

While personal loans can be availed interest rate of 11% to 25% p.a. based on your profile, top-up home loan can be availed at the rate of 9% to 12% p.a. only.

(3) Higher Tenure

Top-up Loan is available for longer duration say 15 to 20 years while other loans can be availed for lesser tenure. Top-up Loan's EMIs will be low because of longer terms, while the amount you would be eligible for is higher.

Gold loans are granted for a short term of 1 to 3 years and personal loan is available for a period ranging from 1 year to 5 years only.

(4) Easy Documentation

You have to submit very few documents in order to avail top-up loan as you have already availed a home loan from same lender and you are an existing customer so it will require very rare documentation from you.

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