Borrowing a home loan doesn’t put an end to your financial commitments. Often, you may have to bear expenses relating to home improvement and renovation or costs related to professional and personal travel, medical emergencies, your children’s education or their wedding. While you are already repaying your home loan through regular EMIs, your monthly outflow may be too strained to finance these needs. So, in order to cater to your immediate needs for cash, and to continue paying home loan EMIs easily, you can take a top-up loan on your home loan. Find out more about it here.
What Is a Top-up Loan?
A top-up loan is an additional loan of up to Rs.50 lakh that you are eligible to take over and above your existing home loan. The best part about it is that you can get a top-up loan with a low interest rate sanctioned and disbursed very quickly. This is because the lender has already checked your home loan eligibility and won’t ask you for too much documentation for a new loan.
This makes it easier for you to acquire finances, especially when you need funds fast. In most cases, the lender will allow you to repay your top-up loan through a long tenor, matching the remaining tenor on your home loan.
Keep in mind that you can assess a top-up loan in two ways:
- When you carry out a home loan balance transfer
- When you have successfully repaid your home loan for 2–3 years
Additional Read: Tax Exemption For Home Loan
Advantages That a Top-up Loan Brings to Your Fingertips
Here are the benefits of a top-up loan on your home loan.
Good Source of Emergency Funds:
A top-up loan is ideal for emergencies as it does not require a fresh loan application. This makes the process of disbursal quicker so you can meet urgent requirements with ease.
Simple Eligibility:
As you already have a relationship with your home loan lender, they will not need to assess your creditworthiness again to give you a sanction. Instead, they will base their judgment on the repayment history of your home loan.
More Affordable than Other Sources of Finance:
Though the interest rate for top-up loans is usually 1.5%–2% more than home loan rates, it is a lower rate of interest compared to other loans such as a personal loan or a loan against property. This helps you save towards the interest obligation while borrowing additional funds.
Easy to Repay:
The long tenor of a top-up loan allows you to have a convenient and relaxed repayment plan in place. For example, a personal loan comes with a tenor of 5; however, a top-up loan can be repaid through a tenor of 15–20 years. The tenor will depend on your existing home loan tenor.
Use It as You See Fit:
In addition to these benefits, you can use a top-up loan as per your needs. There is no usage restriction as to how you need to use your top-up loan. This means you can use your top-up loan to fund home expenses, cater to medical emergencies, purchase a vehicle, or pay for education.
Additional Read: Types of Home Loans
So, you can cater to all your needs in a simple and organised manner with Top-Up Loan from lenders like Bajaj Finserv. You can easily get a top-up loan on your home loan at a low interest rate and enjoy hassle-free sanction via minimal paperwork. When you choose a Bajaj Finserv Top-up Loan, you can also make part-prepayments and foreclose your loan any time during the tenor at no extra cost.
Bajaj Finserv brings you pre-approved offers for personal loans, home loan, business loans and a host of other financial products. Not only does this simplify the process of availing financing, but also helps you save on time. All you have to do is share a few basic details and check out your pre-approved offers on Home Loan.
Need instant financing? Think it. Done with Bajaj Finserv.
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