Top-up loans, as the nomenclature suggests, involves the bank topping up – adding to – your existing loan. So if you already have a home loan with a bank and you have been making regular repayments, then you can apply for a top-up loan. Many banks, private and nationalized, offer top-up home loans to their existing customers.
To be able to get a top-up home loan, you have to:
The following are the salient features of top-up home loans:
Here is why a top-up loan is better than taking a personal loan or maxing out credit cards:
Many banks offer Balance Transfer of Home Loan with Top-Up Loan. Consider the processing charges you’ll be paying on transferring the loan to another bank, the foreclosure charges you’ll incur with your existing bank, and the difference in the rate of interest. Even if the interest rate looks better, if the difference isn’t higher than 1%, then you’ll end up being the loser as you’ll end up spending more on the miscellaneous charges and save very little on the EMI. So analyse your options and choose the one that adds up well for you.