Difference between a top up loan and home improvement loan
Both these provisions are specialised offerings available to borrowers. A top up loan is available to anyone in need of funds, but only if they are already servicing a home loan. This funding can be used freely to meet any obligations such as repaying another debt, paying education fees, addressing medical expenses, or renovating a house.
On the other hand, a home renovation loan is an unsecured offering. Borrowers may utilise the sanction for creating a false ceiling, plumbing and electrical work, tiling and flooring, waterproofing and roofing, external and internal repairs or painting, repair work, upgrades, or complete renovation of an already owned residential property. Depending on what kind of expenses you want to address, you can choose the one that suits you best.
A benefit of opting for a top up loan is that lenders charge only an additional 0.5% to 1% over their home loan interest rates. This greatly adds to the overall affordability and may even end up being a more cost-effective option between the two. However, do note that in both cases, the lender will charge an additional processing fee, which may differ based on the profile of the borrower.
