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  • Everything You Need to Know About Top-Up Home Loans

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  • There is very little doubt in the fact that everyone dreams of owning a house. For a vast majority of people, the best way to make this dream a reality is with the help of home loans. Even though a home loan is considered to be a financial liability, the sacrifices made to clear the debt is incomparable to the joy that comes with having your own home.

    At the same time, this liability can also prove to be a blessing. Apart from the tax benefits a home loan EMI offers, you can also avail an additional loan on top of your home loan.

    For example, consider that you have taken a home loan of Rs.40 lakh with a tenure of 20 years. 10 years down the line, you feel like renovating your house. However, owing to a shortage of funds, you may decide to take a personal loan to meet your renovation expenses. But before you do that, remember this - there is a better and cheaper alternative than taking a personal loan to finance your house remodelling.

    Simply go to the lender you have borrowed from and ask for a top-up loan on your home loan.

    What is a Top-Up Loan?

    Top-Up Loan is a financial product offered by housing finance companies, banks and leading financial institutions, that enables the customer to borrow a fixed sum, over and above the home loan they have taken with the lender. That’s why it is called a top-up loan.

    The maximum amount one can get through a top-up loan depends on the lender. For HDFC Bank, the cap on the top-up loan amount is Rs.50 lakh, whereas, for SBI Bank, it is Rs.5 crore. However, as a general rule of thumb, the maximum top-up loan amount cannot exceed 70-75% of the current market value of the house minus the outstanding amount on the home loan.

    For instance, the market value of your property is Rs.1 crore and the outstanding amount of the home loan is Rs. 50 lakh. Therefore, the quantum of your top-up loan will be between Rs.35 lakh - Rs.37.5 lakh.

    Top-Up Loan Eligibility Criteria

    A top-up loan can be taken by anyone who already has a home loan with a lender. They can either approach the same lender (the one they have the home loan with) or go to a different one. In the latter case, balance transfer of the home loan to the new lender may be required before opting for the top-up loan.

    A few other factors are also taken into consideration by the lender while examining your top-up loan application. They are:

    • The ability to repay the loan which is in turn, based on the past repayment records of the existing home loan
    • Credit score, age, income, et cetera

    Benefits of Top-Up Loans

    Top-up loans come with a broad range of advantages. These vary from low interest rates to long tenure, as seen in the paragraphs below.

    • Low Interest Rates

      If you are a home loan customer and are in need of additional funds, then it will be advantageous for you to select a top-up loan rather than a personal loan or gold loan. This is because interest rates offered on top-up loans are low when compared to personal loans.

      If you avail a personal loan, then you may have to pay interest at a rate ranging between 10.65% - 21% per annum, whereas in the case of top loans, the interest rates may be slightly greater than the home loan rate but still significantly lesser when compared to personal loan. For example, if you choose to take a top-up loan with HDFC Bank, then the interest rate will vary between 8.40% - 8.90% per annum.

    • Tenure

      The tenure for a top-up loan varies from bank to bank and is greater than the repayment period offered on a personal loan. It is usually the outstanding period on the existing home loan, which can be 10-20 years, depending on the loan. Needless to mention, this is certainly an appealing alternative to personal loans.

    • Purpose

      Top-up loans come with absolutely no preconditions on usage. These loans can be used for any purpose, ranging from home renovation and personal expenses to fulfilling business requirements, marriage, education, et cetera.

    • No Security Required

      Considering that a top-up loan is offered on top of the existing home loan (which already has the necessary collateral), no additional collateral is needed to secure the loan.

    • Processing Time is Quick

      Top-up loans can be availed in absolutely no time since all the paperwork needed for the loan is already with the bank. However, you may have to furnish those documents once again. Furthermore, the lender would have already performed the necessary background check at the time of sanctioning the home loan.

    How to Apply for a Top-Up Loan?

    If you are looking to apply for a top-up loan, all you have to do is visit your preferred lender. As mentioned earlier, if you are going to a different lender than the one you have your home loan with, then you will have to opt for home loan balance transfer before you avail the top-up facility.

    Hence, as seen here, home loan top-up is a better way to get access to additional funds in the time of need, in contrast to other means like personal loans, gold loan, et cetera. It’s quick, efficient and comes with a very reasonable rate of interest.

    Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

    Home Loan Reviews

    • DHFL Home Loan
      "Quick approval loan"
      0.5 3.0/5 "Satisfactory"
      I have taken a housing loan from DHFL and the loan amount of Rs. 10,50,000 for the rate of interest of 9.8%. I am paying the EMI amount of Rs. 8500 for the tenure period of 15 years since its plot cum construction loan. Bank itself approved a loan within 3 days.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 11, 2019
    • LIC Housing
      LIC Housing Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan directly through LIC Housing Finance .The rate of interest and the processing fee was quite nominal .This loan was sanctioned on exact time frame without any delay.This loan is still active and i have submitted the required documents as well .If EMI is paid on delay basis there will be extra charges.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Dec 10, 2019
    • SBI Home Loan
      "Easy loan"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan from SBI and the loan amount was Rs. 30 lakh. The rate of interest was 8.15% and i am paying EMI of Rs. 25k. Customer service was good. I received this loan instantly and i applied this loan through online channel.There is no pre closure charges.
      Was this review helpful? 1
      , pune
      Reviewed on Dec 09, 2019
    • Muthoot Homefin Home Loan
      "Good Finance"
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan in MUTHOOT HOMEFIN LIMITED on one year before. The amount was offered of 6L which was sufficient as per my requirement. The tenure period of 7 years. My friend has suggested this finance to apply a loan. The process was smooth and sanctioned the loan within 15-20 days. Interest is nominal. Pre closure is applicable and part payment can be done of above 50K. It is nominal to pay for EMI.
      Was this review helpful? 0
      , chennai
      Reviewed on Dec 09, 2019
    • ICICI Bank Home Loan
      "Instant loan approval"
      0.5 5.0/5 "Blown Away!"
      I had applied for a home loan with ICICI Bank. They have taken my documentation and also completed the verification as well. The loan amount was Rs. 8.75 lakhs and the rate of interest was 8.6% i am happy with the interest.I received this loan instantly and i applied this loan through online channel.There is no pre closure charges.
      Was this review helpful? 0
      , jaipur
      Reviewed on Dec 09, 2019
    • HDFC Limited Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken Home loan directly through HDFC LTD .The loan amount was sanctioned on time without any delay .The agent shared all the details about the loan process ,I have submitted the required documents on time ,This loan is still active and there was difficulties faced so far .The loan tenure is for 5 years ,i have completed 1 year successfully and need to pay EMI for another 4 years.
      Was this review helpful? 2
      , nasik
      Reviewed on Dec 07, 2019
    • HDFC Limited Home Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan directly through HDFC LTD .The rate of interest was 8.25% it was nominal and all the details aboput the loan process was clearly explained by the agent .I have submitted the documents through the agent.I have got the loan amount sanctioned on time .I am satisfied with the service so far .
      Was this review helpful? 2
      , thiruvananthapuram
      Reviewed on Dec 05, 2019
    • HDFC Limited Home Loan
      "Best Service"
      0.5 5.0/5 "Blown Away!"
      I have taken Home loan directly through HDFC Ltd.The rate of interest and the processing fee was nominal .The loan amount got on time and there was no difficulties .This loan is still active and paying the premium through EMI basis without any hassle got this loan .I am completely satisfied with the service .
      Was this review helpful? 1
      , pune
      Reviewed on Dec 05, 2019
    • Oriental Bank of Commerce Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan directly from Oriental Bank Of commerce .The rate of interest and the processing fee was very nominal,I have got the loan amount sanctioned on time ,There was no drawbacks faced so far on using this service .From bank end all t he detail was shared and i am satisfied with the service .
      Was this review helpful? 2
      , gurgaon
      Reviewed on Dec 01, 2019
    • HDFC Limited Home Loan
      "Need to decrease the rate of interest"
      0.5 5.0/5 "Blown Away!"
      I had applied for a home loan with HDFC Limited. The loan amount was Rs. 22,00,000 and the rate of interest was 8% when i was applied , but now it increased to 9.4% need to work in rate of interest. I am paying Emi monthly Rs. 18,500 and the tenure was 18 years. They have taken my documentation and also completed the verification as well executive supported me very nicely.
      Was this review helpful? 3
      , coimbatore
      Reviewed on Nov 29, 2019
    • review Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan directly through Home First Finance company India Pvt ltd.I have got the loan on time and the rate of interest was nominal .The documents was less and the agent clearly explained the loan process very clearly . This loan s still active and paying the premium.
      Was this review helpful? 1
      , jaipur
      Reviewed on Nov 28, 2019
    • ICICI Bank Home Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan directly through ICICI Bank.The rate of interest and the processing fee was medium.I have got the loan sanctioned on time .The documents was very less and each and every detail was shared clearly by the agent .This loan is still active and there was no difficulties faced so far.
      Was this review helpful? 2
      , salem
      Reviewed on Nov 26, 2019
    • DHFL Home Loan
      "Average Service"
      0.5 2.0/5 "Expected more"
      I have taken home loan directly through DHFL .The rate of interest and the processing fee was very high since had a requirement at that time taken this loan .This loan is still active and the loan got sanctioned on time .There was proper callback and follow up as well.Everything was ok but the service was average according to my point of view.
      Was this review helpful? 1
      , ahmedabad
      Reviewed on Nov 26, 2019
    • Union Bank of India Home Loan
      "Not Satisfied"
      0.5 5.0/5 "Blown Away!"
      I have taken home loan which was taken directly through Union Bank of India .The rate of interest was less it was 8.5% and still this loan is active .I have got the loan amount without any delay .All the required details about this loan was shared by the agent. According to me the service is not satisfied .
      Was this review helpful? 3
      , cuttack
      Reviewed on Nov 25, 2019
    • Axis Bank Home Loan
      "Good Service"
      0.5 4.5/5 "Excellent!"
      I have taken home loan directly through Axis Bank .The rate of interest and the processing fee was nominal and the got the loan amount on exact time frame .I am paying the premium through EMI basis .All the detail about the loan process was clearly shared by the agent .I have submitted the required documents and the process was really satisfied .
      Was this review helpful? 2
      , chennai
      Reviewed on Nov 23, 2019
    • IIFL Home Loan
      "Good Service"
      0.5 4.0/5 "Great!"
      I have taken India Infoline Housing Finance Limited directly .I have got the loan on delay basis it took 2 months of time and not got the reason for the delay .This loan is still active and there was no callback and follow up from India infoline .I have submitted the required documents and there was no drawbacks faced so far.
      Was this review helpful? 3
      , new delhi
      Reviewed on Nov 23, 2019
    • BAJAJ HOUSING FINANCE LIMITED HOME LOAN Home Loan
      "Misleading & dangerous"
      0.5 0.5/5 "Unacceptable"
      Bajaj Housing Finance tries all tricks to loot me - 1. Just before disbursement day, they hiked the Processing fee and increased the interest rate 2. After EMI stated, they suddenly hiked the EMI for one month by 20,000 due to a system issue at their end. 3. They arbitrarily deduct charges from your bank account in small amounts without telling and authorizations and randomly through a month. 4. Customer service and its Head are completely nonchalant and they fake ignorance. 5. It takes 5-6 months to resolve one issue. By that time, they will create another issue and you spend the next 5 months chasing them for its resolution. Beware the NBFCs for housing finance. Its always better to go to the leading banks.
      Was this review helpful? 1
      , kolkata
      Reviewed on Nov 23, 2019
    • HDFC Limited Home Loan
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      I have applied for Home loan directly through HDFC Limited .The rate of interest was very less it is only 8.35 or 8.55% criteria but i am not sure about the exact percentage .The premium is paid on EMI basis and got the loan amount on time and not faced any difficulties .I am totally satisfied with the service.
      Was this review helpful? 1
      , mumbai
      Reviewed on Nov 22, 2019
    • HDFC Limited Home Loan
      "HDFC is giving a good service"
      0.5 5.0/5 "Blown Away!"
      I have taken my home loan from HDFC Limited. Purchased my loan more than 5 years back. I got the loan amount of Rs. 20 lakhs and they have taken 3 months to sanctioned the loan and the delay from my side to provide the documents. I'm satisfied with the interest rate of 8.5%
      Was this review helpful? 2
      , malegaon
      Reviewed on Nov 21, 2019
    • HDFC Limited Home Loan
      "DO Not applly HDFC Home loan"
      0.5 0.5/5 "Unacceptable"
      There are lots of cheaters in HDFC home loan and Credit department, They all are just wasting time, never confirmed status of any query, I have a bad experience with HDFC, As salesperson I m eligible for home loan, and interest rate is 8.25. after applying 20 days later they confirmed me to u are not eligible for loan due to ur Company is in LLP firm. They asking for the company balance sheet. also he told me to ur interest rate will be 8.55. How can is it possible. before applying salesperson called me more than 20 times but after apply I called him more than 50 times but he never receives my call. many time I message him to meet me but no luck.
      Was this review helpful? 7
      , pune
      Reviewed on Nov 21, 2019
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