What is a Top Up Home Loan and How this Works ?

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% of the principal value of the property. While the remaining 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.
• Few customers also get to enjoy Instant 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 and renovate your home.

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.