When you have to buy your dream home, taking a home loan is the best possible option along with a substantial amount of your savings. However, sometimes a situation may arise where you may require a significant amount of money to meet your financial needs while you still service your existing home loan. To deal with such a situation, a top-up loan on your existing home loan may prove to be a cost-effective solution.
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’s handy when you encounter a financial crisis or need money to fulfil your requirements like home renovation, medical expenses or paying your educational fees. So, if you have already taken a home loan and you are paying your EMIs continuously without any negligence and delay, then your lending housing finance company may consider offering an additional loan to you.
What is the eligibility and period to get a top-up loan?
Top-up loans can only be offered to existing home loan borrowers. It can be availed only if you have a good repayment track record and a healthy credit score. Usually, housing finance companies offer a top-up home loan for a time duration of 2 to 3 years, but it depends on one housing finance company to the other.
What are the benefits of a top-up loan?
You will get plenty of benefits by opting for a top-up loan. Few of them are listed below:
1) No additional mortgage
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 of usage of funds
You can use the money from the top-up loan as per your requirements, and the lending housing finance company will not ask you for what purpose are you taking this loan. So, feel free to use the money as per your convenience.
3) Low-interest rate as compared to gold loan or personal loan
As the top-up loan is given on the security of the house, the top-up loan interest rates are lower than that of personal loan or gold loan interest rates.
How to opt for a top-up loan?
To get a top-up loan, you have to request your existing housing finance lending company to consider offering you a home loan top-up. You will be eligible once you fulfil the minimum tenure of the on-going home loan. You can also get a top-up loan from another housing finance company which may offer you lower home loan interest rates and top-up loan interest rates. All you will have to do is, opt for a home loan balance transfer to that company.
Therefore, a top-up loan is like an icing on the cake for you. It can help you to meet your urgent and unexpected financial needs along with having a low rate of interest. Plus, the freedom of using the money as per your convenience and requirement is another reason that makes it attractive and lucrative. To opt for your top up loan with us, contact us here!