Owning a home is a dream of every individual and family in India. Buying a house is a personal milestone and an important financial decision. A home loan helps you realise your dream without taking a huge financial setback. Easy monthly instalments help you stagger your payments over the long term while saving you from a large cash payout. (You can calculate your home loan EMI using a home loan EMI calculator.)
Have you considered the thought of what if your home loan could also help you meet your other financial commitments? Yes! A home loan top-up can be your answer to your quest for a quick and affordable source of funds.
What is an instant home loan top-up?
Planned or unexpected, immediate cash requirements can arise anytime. It can be in the form of a much-needed home renovation, a destination wedding, or overseas education expenses for your child. A home loan top-up is a suitable solution to meet all such needs. Home loan top-up is an add-on loan provided by a bank or a lender on a home loan already running with them. Let us see why you should opt for an instant home loan top-up.
Lower interest payout
A home loan is a secured loan. Your property is mortgaged to the bank till the loan is active. Due to this reason, the interest rates are quite low on home loans. Personal loans, credit card loans, and gold loans are unsecured loans that attract a much higher interest rate, ranging between 9 and 25 per cent per annum. Home loan interest rates range from 6.5 to 12 per cent, depending on your credit score, income and home loan eligibility. Undoubtedly, you can save a good amount of money with a home loan top-up option.
Minimal documentation and faster processing
Since you are an existing borrower with the lending institution, your documentation and credit assessment are already in the bank’s records. Your repayment history on your home loan works in your favour to make you eligible for a top-up.
On the basis of your existing relationship with the lender, a top-up loan is processed with minimal paperwork within a day or two. Some lenders even offer a pre-approved top-up loan on the basis of your home loan eligibility. The loan processing time is much longer when you apply for an unsecured personal loan, which takes about 3–7 days. It means that in case of an emergency too, you can avail a top-up without any delay.
Longer loan tenure
Home loans are long-term loans that last for 5–25 years. An instant home loan top-up is also disbursed for the same tenure as your base loan. It means you have the flexibility to repay the loan at your convenience. The EMI is much lower for a long-duration loan. The tenure of a personal loan or credit card loan is 1–5 years. Hence, the EMI burden is much higher, and it can constrain your finances.
Unlike a home loan, vehicle loan, or education loan, there is no restriction on the end-use of home loan top-up. It is a significant advantage as you can avail of a long-term loan to meet any financial need, e.g., an overseas family trip, a premier educational course, a luxury car, or a destination wedding!
Higher loan amount
There is a ceiling on loan amounts in the case of personal loans and credit card loans. However, in the case of a home loan top-up, you can avail a higher quantum, especially when you have repaid a portion of your pre-sanctioned home loan. On the basis of your home loan eligibility, you can avail of a top-up to your base home loan amount.
An instant home loan top-up is a convenient way to secure funds at short notice, attractive rates, and comfortable repayment tenure. It also helps build your credit score with the lender.