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Top Up loan in India

Feb 4th 2020 at 4:12 AM

Top-up loans are the loans that you can get on your existing home loan, personal loan and Loan Against Property. These kinds of loans are easy to get only if you have paid EMIs on time on your existing loan. The minimum eligible period to get a top-up loan is 1 year, and the interest rate that can be charged on such a loan ranges from 0.25 to 1% higher than your existing home loan. You can get tax benefits on a top loan if it is for home renovation or expansion. No collateral is required for taking a top-up on the personal loan. Getting a top-up loan requires less or no documents at all. You should only get a top-up loan if you really need one.


Eligible Top-Up Loan Amount

Home loan amount - You can get a maximum of 50 lakhs as a top-up loan for a tenure of 30 years.

Personal loan amount-  You can get a minimum of 1 lakh as a top-up loan for tenure from 3 to 5 years.


Top-Up loan Interest Rates

You can get the top-up loan from your existing bank or from another bank by doing the balance transfer. The interest rates on personal loan range from 8.3% to 12.75% and on home loan it ranges from 10.8% to 25%. There are also processing charges for taking a top-up loan.


Eligibility Criteria

  • Only applicable to a salaried or self-employed person.

  • For home loan or loan against property, you can get the Top-Up loan only after 1 year.

  • For a personal loan, you can get the Top-Up loan only after 3 timely EMI payments of the existing loan.
  • Records showing timely EMI payments on the existing loan amount.
  • The total EMI cost should not exceed 65% of the applicant’s income for a home loan.
  • Your CIBIL Score should be more than 750.
  • You should have a stable job.

Needs for taking a top-up loan

A top-up loan is very useful if you have urgent needs but are lacking funds. It is very much useful for business expansion, home renovation, marriage expenses, medical emergencies and holiday expenses. If you are comfortable paying EMI for a longer period of time, then you must go for a top-up loan.

Tax Benefits

If you are planning to construct or buy a house, then you can get tax benefits under section 80C. If your purpose for taking a top-up loan is home renovation, then you can get tax benefits under section 24C.

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