Home Loan not enough? Take a Top-Up Loan
January 23, 2020
If your Home Loan isn’t sufficient to meet all the financial requirements of your home, you can apply for a top-up loan over and above your existing loan. Here is everything about top-up loan and Home Loan.
What are Home Loans?
Home Loans are generally taken to purchase a house, construct a house or to renovate/rebuild your existing house. Your Home Loan eligibility depends on your income and your repayment capacity. Higher your income, higher will be the approved loan amount. Most lenders approve a loan amount between 75-90% of the principal value of the property. While the remaining 10-25% is expected to be paid by the borrower. The amount that is paid by the borrower is known as ‘one’s own contribution’. Even if a person is eligible for a higher loan amount, it is advised that the person makes some kind of down-payment as that will lower the interest rate on the Equated Monthly Instalment (EMI).
What are the features of a Home Loan?
- Home Loan interest rates are reasonable and can be negotiated with the bank/financial institution.
- Easy loan application and documentation process.
- You can select smaller EMIs with longer tenure.
- It also offers ‘Balance Transfer’ feature which allows you to transfer your existing Home Loan from one bank to another.
- The top-up Home Loan is a feature that is offered on the existing Home Loan.
- Eligibility calculator tool and EMI calculator tool that tells you the pre-approved amount and the EMI applicable on your Home Loan.
- Few customers also get to enjoy pre-approved Home Loans.
What is a Top-Up Home Loan?
Top-up Home Loan is given over and above the existing Home Loan. This loan can be used to furnish your home, renovate your home and even towards personal expenses.
What is the Top-Up Home Loan eligibility?
Anyone is eligible for a top-up Home Loan if they have taken a Home Loan. But you have to wait for at least one year before applying for a top-up loan. The top-up loan amount is calculated based on the principal Home Loan amount and approved accordingly.
What is the Top-Up Home Loan interest rate?
The commonality between a Personal Loan and a top-up Home Loan is that both get disbursed quickly and require minimal documents. The contrast between the two is the interest rate - Personal Loans have a higher interest rate as they are unsecured and top-up Home Loans already have a property pledged which makes them cheaper. This difference in the interest rate leverages top-up Home Loan above Personal Loans.
The interest rate in top-up Home Loans varies between 8.70 – 9.55% per annum, whereas the Personal Loan interest rate starts at 10.50% per annum. Almost every banking and financial institution offers top-up Home Loan on their Home Loans.
Under top-up Home Loans, ICICI Bank offers benefits such as – attractive interest rate, low EMI, repayment period of up to 20 years, minimal documents and quick
processing. These features make the top-up Home Loan convenient and the go-to option during a financial crunch. So, if you find yourself in an emergency and need urgent cash, your Home Loan will be there to aid you with a top-up loan.
Click here to apply for Top-up Loan .
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