To maintain your home in a healthy condition, you must renovate your home after regular intervals. Moreover, home renovation will also give your home a modern look and keep the value of your property intact. It has been observed that a large number of homeowners avail a personal loan or gold loan to renovate their homes. However, apart from these credit products, you can also opt for a home loan top-up to get your house renovated. These loans are additional loans that are added above your existing home loan to finance your need for additional funds.
However, the usage of this fund is not limited to renovating or making changes in your house. You can use this money to fund any personal expenses such as a child’s higher education, business-related needs, or financing business operations. Generally, loan borrowers are approved for a top-up loan facility if they have paid their EMIs on time, and have maintained a reputation of consistent repayment.
What’s a Top-Up Loan?
A top-up loan is a facility provided by banks and other financial institutions that allows a loan borrower to borrow a certain amount of money this is then added over and above your current personal loan, gold loan or home loan.
Who can avail a Top-Up Loan?
Anyone with an existing Home Loan, Gold Loan or a Personal loan can avail a Top-Up Loan. Tax deduction benefits are also available on a top-up loan for the interest portion under section 24. Most banks and financial institutions offer top-up loans readily to their existing customers.
Top-up loan Eligibility criteria
Lenders will allow such a loan only if you have had already taken a loan earlier and have been steadily paying back the loan amount, at least over one year or as mentioned in the document. The repayment track record of your loan is one of the most important factors considered by the lender. This will determine whether you are eligible for a top-up loan.
- A top-up loan will be given only if you have an existing loan facility from the same bank or financial institution
- This loan can be availed for anything between 10-20 years. It also depends on the tenor of the existing gold loan, home loan or personal loan
- Your outstanding home loan will determine the value of your top-up loan. Additionally, the market price of the collateral that you pledge with the lender will also be factored in while deciding the top-up loan amount.
- Your loan credit history and a good repayment track record will impact the top-up loan amount.
Let’s have a look at the difference between a personal loan, gold loan and home loan top-up.
Personal loan top-up vs Gold loan top-up
|Personal loan top-up||Gold loan top-up|
|This loan is an unsecured loan as no collateral is required for personal loan Top-Up
|Gold loans, being a fully secured loan against the gold put up as collateral, are quickly disbursed without laying much emphasis on the borrower’s credit score.|
|Minimal paperwork is required for a personal loan top-up||Gold loans involve probably the least degree of documentation amongst various forms of credit most lenders require basic documents|
|Some banks and financial institutions provide flexible personal loan repayments||Many lenders offer various flexible repayment options for gold loans|
|You can use the funds from a personal loan for any purposes without disclosing any details to the lender.||The pledged gold has to undergo through a valuation and purity check that would help the lender decide upon the loan’s amount.|
Which one should you choose?
The decision to choose between a personal loan and a gold loan is completely depended on your requirements. In case if you wish to avail repayment flexibility and are comfortable in repaying it within a short time period, opting for a gold loan is an ideal option. However, for those borrowers who have a good credit score, stable income and require higher repayment tenure, personal loans would be the right choice to move ahead with.
Home Loan Top-up vs Personal Loan top-up
|Home Loan Top-up||Personal loan Top-up|
|This top-up loan requires higher interest rate||This top-up loan offers lower interest rate|
|The maximum tenure of the loan is more than the Personal Loan tenure. However, it can be extended to coincide with your original Home Loan||Personal loan top-up requires a lengthy documentation process|
|The lender provides home loan top-up only if the borrower has provided collateral for it.||Being a borrower you are not required to provide any collateral|
|A verification process takes place before a home loan top-up gets approved||Quick approval with no verification.|
Which one should you choose?
Most of us are well aware of a personal loan but many of us do not know much about home loan top-up. Both of these are loan categories that are made easy for you to help you in your financial crisis. Whether it is a personal loan or home loan top-up, the use of the loan amount remains the same. The loan amount can be used for various purposes like medical emergency, child’s education, vacations, wedding expenses, business expansion, paying off debts and many more. However, you need to make sure you apply for a loan at a reliable bank or financial institution.
Loans available at Finserv MARKETS come with attractive rates of interest. Whether you want to plan your travel, purchase a home, or finance your wedding expenses. You also get personalized pre-approved offers, instant approvals and flexible tenures of 12 to 60 months on your loan.
The loan repayment process is quite convenient. Before applying for a loan you need to check whether you are eligible for a loan. You can take the help of an Eligibility Calculator to check and calculate your eligibility. For a smooth loan repayment process, you can choose to repay the loan amount in easy EMIs. To calculate the number of monthly instalments you can take the help of an EMI calculator.
All you need to do is enter the desired loan amount, the predetermined rate of interest and the fixed tenure of the loan. The complete your loan application process is carried out online, hassle-free requires minimal documentation. Moreover, loans available at Finserv MARKETS come with top-up facility. Therefore, if you are in need of additional funds for any of your requirements, you can avail a top-up loan and get your work done. Instant approval and quick disbursal of the loan amount are some of the other advantages of loans available at Finserv MARKETS.
“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.”