How Can You Benefit From A Top Up Loan?
For those who need more financing after purchasing a home via a home loan, a top up loan is the best solution. With its sizable loan amount and affordable interest, a top up loan may be used by you to carry out home repairs, additions and renovations or for any other purpose like funding a child’s education, buying an asset, putting a down payment on your second home purchase, etc.
A home loan top up is also substantially easier to apply for when compared to other loans. It also pre-empts the hassle of applying for and managing multiple loans apart from your home loan. Given to you by the same lender who has sanctioned your home loan, a top up loan is offered over and above your home loan. Since all your documents are submitted during the time of application for a home loan or a balance transfer, you do not have to submit them again when availing a top up loan. This loan is also offered at times as an incentive for borrowers seeking a home loan balance transfer.
How You Can Gain From Top Up Loans?
Here are a few benefits that top up loans can offer you:
- Low and Nominal Interest Rates: These loans have low interest rates as compared to other loans such as personal loans. Where the interest rates for personal loans range from 17% to 20%, top up loans offer you an interest rate from 8% to 12%. This makes top up loan cheaper for you then other loans.
- Absence of Additional Collateral: Top up loans do not need you to pledge additional assets as security.
- Easy and Convenient Application: Since a top up loan is offered exclusively to home loan borrowers, it doesn’t require a long and ardours application process. Since you are an existing home loan customer, you have already submitted all your eligibility documents. This keeps the paperwork required for a top up loan to a minimum, thus makes it even more expedient for you.
- Suitable Tenor: Top up loans usually have a long repayment tenor to match the tenor left on your home loan. This makes it easier for you to handle and make your EMI payments. A longer tenor spreads out your EMIs and makes the amount very manageable, and a shorter tenor works for you too since the interest charged is low.
- Application is Quicker than Applying for a New Loan: This type of loan doesn’t require you to go through the whole application process from scratch. You do not have to fill a lengthy application form or wait for weeks to get your top up approved. If you have applied for a home loan and the lender is satisfied with your past repayment, you are automatically eligible for this loan.
- A Viable Source of Finance: You need funding for various instances in life, and your requirements do not end with a home loan. But you may find that taking another loan once you already have a home loan may prove to be difficult for you. This is when a top up loan works as the perfect source of finance for you. You can use this loan amount for any purpose like painting your home, purchasing a new car, financing a wedding, or even going for a vacation-all at affordable interest.
When you use a top up loan for purchasing property or renovating your home, you will also receive tax deductions under Section 80C or Section 24 of the Income Tax Act. Check out the various benefits of applying for a top up loan from Bajaj Finserv, which offers not only low interest but also an important that is greater than your home loan if your property’s value is high enough.