With home loans, you can easily purchase your dream home without draining your savings. The best part is that, housing loans come with flexible repayment options, where you can comfortably repay the loan over two decades. However, not many know that if you are servicing a home loan and need more funds during your tenure, you can apply for a home loan top up and fulfil your financial goals.
Learn more below.
What are Top-up Home Loans?
A top-up home loan is a facility provided by lenders where you can avail an additional loan over your existing loan. You need to be an existing housing loan borrower with the same lender.
Tenure of Top-up Loan
A top-up loan is available for the balance tenure of the existing home loan or for the original loan tenure, depending on the lender. However, lenders consider the applicants, repayment history, and loan amount while approving a top-up loan.
Eligibility and Documents
You can avail a top-up loan if you are already servicing a housing loan. However, make sure that you have repaid your EMIs timely for 2-3 years. In addition, you must have a good credit score of over 750 and a similar income level to be able to repay the top-up loan. .
Ensure to keep the required documents handy. Some lenders ask for documents like identity proof (passport, voter ID, etc.), residential proof, salary slip, passport size photograph, income details, etc.
Purpose of Top-up Home Loan
Though there is no compulsion of using the funds for the expenses related to your house, it would be best to confirm with your lender. You can use the top-up loan amount for medical emergency, educational needs, purchasing a car or new shed for your garage, or anything else. If you use it towards your home, you can use the amount for home renovation, furnishing or home decor.
Benefits of Top-up Home Loan
- As the lenders already have all your details, a top-up loan can be easily approved and disbursed.
- The tenure for a top-up loan is longer than a personal loan, gold loan.
- You can claim tax benefits on top-up loan repayment similar to a home loan if you use it for expenses required for your house.
A top-up home loan helps you get additional funds without much documentation and processing. You can avail a top-up loan via offline or online method. To avail it offline, visit the lender’s branch and fill the application form with the required documents. If you want to apply online, you can visit the lender's website, click on apply now and fill the online application form. The lender’s representative will contact you.