Top-up Loans on Home Loans: Your Guardian Angel
When looking to refinance your Home Loan, you may have come across lenders suggesting that you apply for a top-up loan. But what is this top-up loan they talk about? Here is a detailed article about top-up loans that explains everything you need to know about these handy financial products.
A top-up loan is a loan that functions like an extension of your current Home Loan, i.e., you can sink it into the same property. But to start with, you’ll need a Home Loan. Many lenders like Bajaj Finserv, for instance, offer you loans with instant approvals and part-prepayment facility. Now that you’re clear on the meaning of a top-up loan, it’s time to decide if you need one.
Is Opting for a Top-up Loan a Good Option?
A top-up loan comes with a long tenure for an easy repayment schedule. This also means that you will have to shell out lower EMIs due to the extended duration of the loan. You can even avail of tax benefits if the loan is used to renovate your current home.
While most people rush toward a personal loan when they need immediate finance, a top-up loan on your Home Loan works out better for you since the interest rates are lower. Additionally, you can get up to 70% of the value of your house when you opt for a top-up loan.
Do You Qualify for a Top-up Loan?
Home Loan top up eligibility is largely based on your ability to repay the loan. Lenders will take into account your credit history, and the outstanding amount on your current Home Loan and any previous loans to ascertain your eligibility. In order for you to qualify for a top-up loan, you need to have a good track record of managing your finances well. In case, you’d like to find out whether you are eligible, financiers like Bajaj Finserv offer you a list of requirements.
Interest on Home Loans
Home Loan interest rates in India differ from lender to lender, NBFCs like Bajaj Finserv offer you Home Loans with terrific interest rates. Interest rates also depend on a few important factors like your age, income, living expenses, and repayment capability. Keep in mind that there are both floating and fixed interest rates available. You can also choose a partly floating or a partly fixed interest rate depending on your financial condition. The loan amount you usually get is up to 80% of the total value of your home.
So, whenever you need additional finance to build your dream home and you see no options, choose a top up loan which will offer easy payments and be less burdensome in the long run.