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Blog
2 mins Read | 4 Years Ago

Everything You Wanted to Know About Top-up Loans

What Is Top Up Loan?

The top up loan, as the name suggests, is the additional loan you take on your existing personal loan or a home loan. If you are in the process of repaying your loan and if you have been paying your EMIs (equated monthly instalments) diligently, you can easily avail a top-up loan by agreeing to the terms of the lender. Most lenders in India offer top-up loan at the same interest rate as your existing loan and it has simple documentation and quick approval process.

Features And Benefits Of Top-Up Loan

Reduce The Burden of Loan

One of the main reasons why many people in India opt for top up loans is that it allows you to consolidate all your existing loans and thus help you minimise the overall interest rate on loan. You can avail a top-up loan on your personal or home loan and pay off other debts, which in turn can reduce the burden of paying multiple loans at the same time.

Minimal Documents Required

Most banks in India have simple and minimal documentation for top-up loans. This is because the customers usually have an existing relationship with the bank and the banks are also aware of their credit history. If you are unsure how much top-up loan you can apply, you can use the top up loan calculator to know exactly the amount you need and how much would be the EMI amount.

Quick Approval

Since the banks have a relationship with the top-up loan applicants, the process of approval is quicker than a personal loan or a home loan. Also, the disbursement of the amount is faster as the bank is aware of the credentials of the applicant. Thus, a top-up loan is a great way to get access to funds immediately and meet emergency needs.

Interest Rate

One of the most important things people look for while applying for any type of loan is the interest rate. Most lenders in India offer attractive top up loan interest rate as compared to other unsecured loan. This is also one of the major reasons why several people opt for a top-up loan as it helps them manage their repayment easily. Some lenders in India allow the top-up loan applicants to choose between a floating or fixed interest rate.

No Collateral or Security Needed

Most lenders do not require the top-up loan applicants to provide any security or a collateral against the amount they borrow. Neither do they require any guarantor. This not only makes it easy to avail the loan, but also considerably reduces the time taken to process the application and disburse the funds. Thus, you don’t have to worry about losing any asset while applying for a loan.

Longer Repayment Duration

The banks usually decide the repayment duration for the top-up loan based on the outstanding balance and the loan amount you apply for. Usually, the duration is much longer than the personal loan, which is why people opt for this loan. However, you must know that the tenure of the top-up loan cannot be more than the tenure of your original loan. You can use the top up loan EMI calculator to know exactly the amount you must repay every month till the end of the loan term.

Balance Transfer Facility

If you have availed a home loan or a personal loan from a certain lender and if that lender does not offer you a top-up loan, you can transfer the loan to another lender. This will not only help to get the additional loan, but also help you meet the financial requirement.

 

DISCLAIMER

The contents of this document are meant merely for information purposes. The information contained herein is subject to update, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment. Any investment decisions that may be made by you shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient’s own risk. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith by lClCl Bank and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. ‘lClCl’ and the ‘I-man’ logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.

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