Do you already have an ongoing home loan? Are you facing a shortage of funds and looking for financing alternatives? Do you want to renovate or repair your home? If yes, you don’t need to go for expensive financing options like unsecured personal loans as your home loan can adequately meet your financing needs. You read that right! Home loans come with a top-up facility that allows you to avail of extra financing over and above your existing loans. But what is a top up loan on Home Loan exactly? Let’s find out!
Top-up loan facility is an additional financing facility that you can avail of over and above your existing home loan. You don’t need to provide additional security to avail of a home loan top-up facility. While you can apply for the top-up facility on your home loan with your existing lender, you can also opt for a balance transfer with the top-up facility with a new financial institution in case your existing lender denies the same.
Following are some of the crucial benefits of top-up loans on existing home loans:
No Additional Documents Required: You don’t need to provide any additional documents to avail of the top-up facility on your existing home loan if you avail of this facility with your existing home loan lender. As the lender already has all the required documents, it eliminates the documentation requirements.
Affordable Interest Rate: Home Loan top-up interest rates are quite affordable and similar to your existing home loan. Being a secured loan, home loans are one of the most affordable financing facilities. Top-up loans are affordable options as compared to other unsecured lending arrangements like personal loans or credit cards.
No Additional Security Required: You don’t need to provide any additional collateral security to avail of a top-up loan on home loans. Your home acts as a collateral security for your home loan top-up facility as well. This makes financing seamless for the borrowers.
Quick Processing: Your top-up loan facility gets processed faster than you can imagine. Your existing lender already possesses all the required documents and information like your KYC, income proofs, bank statement, loan statement, property documents, credit score and repayment history. Therefore, they will decide on the approval or rejection in most cases, which doesn’t take much time.
Flexible Tenure: Most financial institutions provide flexibility in selecting the tenure for repayment of the top-up facility on your existing home loan. While home loans have long repayment tenures like 15 years or 20 years, the repayment tenure for housing top-up loan facilities depends upon the amount and other terms.
Unrestricted Use: It’s not necessary to use the top-up facility on home loans for the purpose of home improvements only. They come with unrestricted end-use. Therefore, you can use the top-up facility for any purpose like meeting emergencies, travel, education, purchase, home improvements, etc.
Follow the steps below to avail of top-up loans on your existing home loan facility:
1. Visit your existing lender and ask whether you are eligible for a top-up facility.
2. Inquire about the limits and terms and conditions for obtaining top-up loans on your existing home loans.
3. Fill and submit the application form for the home loan top-up facility.
4. Provide any additional document, if required by the lender.
5. The lender will process your application and decide on the approval or rejection thereof.
6. Once approved, the funds will be disbursed within a few working days.
Housing top-up loan facilities are a great financing facility for people who are in urgent need of funds. It can help save a lot of interest costs that otherwise can be incurred in the case of an unsecured financing facility. Further, the top-up facility is processed quickly as the lender is already in possession of the required documents and information. If you find it difficult to avail of the top-up facility with your existing lender, then you can opt for a balance transfer plus top-up facility with IIFL Home Loans.
IIFL Home Loans provides you with affordable and flexible home loans and top-up facilities. You can calculate your home loan EMIs in advance using the IIFL Top Up Home Loan calculator. By entering the loan amount, tenure and interest rate, you can know your monthly EMI as well as the total interest payable over the loan tenure. Visit the IIFL Home Loans now!
Ans: Top-up loans on home loans are better than personal loans as interest rates are lower and these loans are processed quickly.
Ans: Top-up loan EMIs are like any other EMI. However, in most cases, it is not clubbed with your home loan EMI.
Ans: No. Home loan and top-up loan tenures are different. You have the flexibility to choose the top-up loan tenure at your convenience.
Ans: It depends on how much loan you have repaid and your repayment history. In most cases, the top-up loan amount and existing outstanding amount of your home loan cannot exceed your original home loan sanctioned amount.
Ans: No, you can use top up loan for any purpose and not only for home-related purposes.
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