What is Top Up Loan Know its Meaning and Benefit?Posted by Kaira Turner on February 28th, 2023  Home loans are now more accessible than ever because to declining interest rates brought on by the rising wages. Naturally, borrowers might choose to transfer the amount of their house loans in order to benefit from the current situation and lower their EMI obligations. Through this method, they are also able to obtain a top-up loan, which functions more or less as an extension of their current home loan. Continue reading to know “what is a top up loan” and the associated benefits of this facility. What is a top up loan?People tend to immediately go toward secured credit facilities to finance significant investments. However, despite the fact that a home loan's secured structure enables borrowers to get significant cash, the amount frequently falls short, especially when investing in high-value assets. When you need to meet your financial obligations but don't want to deal with the headache of new papers, a top-up home loan is the perfect solution. It is also helpful when you require quick cash for personal or professional purposes, as well as to pay for any other unforeseen expenses. People also opt for a top up loan for debt consolidation, which is the process of combining all of the current loans into one that is much easier to manage. Due to the variety of uses for this type of loan, borrowers must be aware of its subtle intricacies and close a home loan without any hassle. What are the benefits of a top up loan?People who want to apply for a top up loan, must know the beneficial aspects of this facility:
Top-up loans, unlike home loans, offer the convenience of using the obtained funds to satisfy any financial need. A top-up loan can be used for travel, home improvement, and other significant costs in addition to debt consolidation.
Since these loans are only taken in addition to current ones, all the eligibility requirements are already determined. The qualifying requirements will also be straightforward if you are applying for a top-up loan at the same time that you are transferring the outstanding of your house loan. When sanctioning the loan, lenders do not consider the borrower's creditworthiness; nonetheless, it is advised to maintain a clean repayment record to ensure quick disbursal.
Financial institutions usually do not offer tax exemptions of top up home loans. However, if the borrower needs the money for construction, remodelling, or extension of their home, he or she can be eligible for the tax benefits. The highest tax deduction on a top-up loan, if taken out for a self-occupied residence, is Rs. 30,000. There is no cap on the deduction if the borrowed money is going toward rental property. Before moving forward, however, consumers must have a comprehensive grasp of all the tax benefits and other benefits of current home loans. What are the eligibility parameters to opt for a top up loan?The criteria for eligibility that one must meet are as follows:
Existing borrowers can check the pre-approved offers made available by renowned financial institutions on a variety of financial products, including loan against property and home loans, among others. These pre-approved offers streamline the application procedure and lessen the burden of paperwork. Borrowers can check their pre-approved offers by entering their names and contact number in the required section of their preferred lending partner. Opting for a top up loan instead of a new standalone credit seems to be a better option because a top up loan has "zero processing charges”. You can not only obtain a sizeable sum and meet the requirements during financial difficulties, but you can also save a sizeable sum of money in the process. The maximum top-up loan value that the lenders will often sanction is between 70% and 75% of the value of the property, though this range varies from lender to lender. Like it? Share it! More by this author |