You Should Know How Top-up Loan Works on a Home loan

When you need a large amount, it is common to avail of a loan to cater to your needs. But when you already have a home loan or have recently opted for the home loan balance transfer, you may avail of a top up loan. 

A top up loan is offered above and over your current home loan. 

Based on your home loan eligibility, you can know about an available housing loan amount. Using the top up home loan calculator on a lender’s website, it is possible to know about a precise amount. 

Let’s know how a does top up home loan works and its benefits!

Here’s how a top up home loan works 

Suppose if the home loan value is Rs.50 lakh over a tenor of 20 years. After 10 years, the outstanding amount is Rs.33 lakh; you may be entitled to a top up home loan. If you have paid your home loan EMIs on time, you may find no issues in getting the approval. 

What are the benefits of a top up home loan?

1. A higher loan amount 

You may be able to enjoy up to 70-80% of your property’s market value as a home loan. 

2. Extended tenor 

It is possible to repay the top up home loan over a longer tenor. The loan duration could be 10-30 years or the remaining period of your current home loan. 

3. Lower top up home loan interest rate

The top up home loan interest rate is only a few points higher than your ongoing housing loan. 

4. No restrictions on usages

You can use the top up home loan as per your preferences and without restrictions. 

The documents required for applying for a top up home loan is also less cumbersome. 

If you need a higher amount on your current housing finance, you can opt for a top up home loan.

Read more: Consider these things Before Opting For Top Up Home Loan