Often, people struggle to arrange extra funds for their household needs after availing of a home loan. If you have been going through a similar problem, you can now easily solve things by applying for a top up loan on your home loan.

Let’s assume you’ve applied for a home loan of INR 50 lakh to buy a property. You gained possession of the house and have settled in as well. After a few months, you get your hands on an amazing deal for a car. Now you have to buy the parking space for your swanky new car, but are short on funds. What should you do in such a situation? Simple! You can opt for a top-up loan on your home loan and overcome your financial crunch.

If you haven’t understood the meaning of a top-up loan yet, here’s what you need to know.

What is a Top-Up Loan?

A top up loan is issued on your existing loan. If you suddenly face a situation where you are in need of cash, you can ask your lender to top-up your existing loan. There are many benefits of top-up loans, but the biggest is that there are no restrictions on how you utilize the amount. You can use the funds for buying furniture, going on a holiday, clearing off other debts, or even to finance an education.

How Can You Apply for a Top-Up Loan?

You can apply for a top-up loan only when you have already availed of a home loan or a personal loan. For example, if you have taken a home loan from a particular bank, you can approach them for a top up loan after you have cleared a few EMIs. Usually, banks disburse top-up loans within a short period of time if you have been paying your EMIs on time and have a good credit score. For instance, if you have already taken a Home Loan from Bajaj Finserv, you can contact them for a top-up loan.

How Does a Top-Up Loan Work?

A top-up loan on personal loan or home loan will be sanctioned once your eligibility has been confirmed. The tenure of a top-up loan depends on the existing loan. Usually, it can be extended up to 10 years. If you use this loan to renovate your house or buying add-ons, you can even claim tax benefits on the loan amount.

When Should You Apply for a Top-Up Loan?

You should apply for a top-up loan only when you don’t have any other source of funding. If you have investments in the form of gold, fixed deposits, or debentures, you should use them to meet your requirements.

However, if you feel that you would rather opt for a personal loan than a top-up loan, you can approach lenders like Bajaj Finserv. They offer personal loans at attractive rates and if you’re a salaried professional you can avail a personal loan online for an amount of INR 25 lakh within 5 minutes.

Top-up loans can definitely help you fulfil your needs within a short period of time, so check out these convenient beauties.

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