Home Loan Vs Top Up Loan: All You Need to Know

By Ravish kumar - January 23, 2018

Home Loan Vs Top Up Loan: All You Need to Know

Confused between a Home Loan and a Top Up Loan? Don’t worry because this write-up is going to clear your concept quickly.

What is a Home Loan?

A Home Loan is a fund that a borrower needs or intends to apply while buying a home. Nowadays, you can avail a Housing Loan at a lower rate of interest with a leading lender.

If you have the required Home Loan eligibility and creditworthiness, you can avail a Home Loan between Rs.20 lakh and Rs.10 crore.

Reputed lenders offer an online Home Loan application these where you can simply apply and get an instant approval and get money in your bank in 24 hours.

What are the Eligibility Criterions for a Home Loan?

A House Loan borrower needs to match up with the eligibility conditions of a lender to get the House Loan application approved. They are:
  • You should be a citizen of India
  • Your age should fall under 25-58 years
  • You should be a working professional with at least 3 years of work expertise
What is a Home Loan Eligibility Calculator?

A Home Loan eligibility calculator is an online tool provided by lenders on their websites. It helps you assess your Housing Loan eligibility within a fraction of seconds. 

What is a Home Loan EMI calculator?

A Home Loan EMI calculator is also an online tool which is available free on a creditor’s website. You can use the tool to know an exact amount that you would be paying off as EMIs if you avail a House Loan for a particular amount as per your wish.

What Determines your Maximum Loan Eligibility?

The maximum loan amount that you can avail of depends on the creditworthiness of a borrower. Your maximum loan money which you can get depends on your monthly income, financial liabilities, and other documents.

What is a Top Up Loan?

A Top Up Loan is an extended loan provision made out to existing Home Loan customers who opt to switch their Home Loan accounts from a lender to a new lender.

When an existing Housing Loan customer is unhappy with the customer service or a higher Home Loan interest rate from a lender, he/she can opt for Home Loan balance transfer.

When a housing loan customer goes for balance transfer, the new lender offers them a Top Up Loan to help them cover up numerous other financial needs. A Top Up Loan gets you a loan up to Rs.50 lakh at a reduced rate and an extended tenor when compared to a standard loan.

What are the Benefits of a Top Up Loan?

A Top Up Loan has immense benefits such as:
  • You get to avail a higher amount – the maximum being Rs.50 lakh
  • You get to avail reduced rate of interest – ranging between 8-12%
  • You get to avail a longer loan tenor – you can pay off a Top Up Loan just like your Home Loan tenor
  • It helps you get tax exemption on the loan amount
  • You can use it for many purposes as per your needs
  • Compared to standard loans, it helps you save on interest part and tenor
What are the Eligibility Criterions of a Top Up Loan?

A Top Up Loan has very basic eligibility terms because it comes as a feature of a Home Loan balance transfer for which you have already complied earlier. It has the same eligibility as that of a Home Loan discussed above.

How can you Apply for a Top Up Loan?

You can simply fill up the lender’s online application form, review the loan offer while utilizing the Home Loan top-up calculator and then apply.

The Bottom Line

A Top Up Loan is an extended facility which you avail at a reduced rate and an extended tenor if you have switched your Housing Loan account with Home Loan balance transfer.

If you have some other needs or aspirations to cover such as home renovation, funding child’s education, marriage ceremony and more, it would be advisable to opt for a Top Up Loan and make the most of it.

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