Learn what a home loan top-up is, along with its eligibility criteria, benefits, drawbacks, and application process on Bajaj Markets.
A home loan top-up allows you to borrow additional funds over and above your existing home loan amount. It is useful for financing renovations, repairs, or unexpected property-related expenses. This option offers flexibility and can help manage costs that arise after the initial purchase of your home.
In addition to covering renovations or repairs, a top-up loan can be used for expenses not included in the original loan, such as registration fees, brokerage, or maintenance charges. It provides a convenient financial cushion and comes with several advantages for homeowners seeking additional support without applying for a separate loan.
A home loan top-up allows existing borrowers to secure additional funds over and above their current home loan balance. It is designed for individuals who require extra financing without undertaking the process of applying for a new loan.
Only existing home loan borrowers with a strong repayment history are generally eligible. Lenders assess eligibility based on factors such as the outstanding loan amount, loan-to-value (LTV) ratio, and the borrower’s credit profile.
The sanctioned top-up amount depends on the remaining equity in the property and the borrower’s repayment capacity. The tenure usually runs alongside the existing home loan, helping to keep repayments aligned and manageable.
Top-up loans typically carry slightly higher interest rates than standard home loans but remain significantly lower than those for personal loans. Repayments are made through revised EMIs that cover both the original and the additional borrowed amounts.
Top-up loans offer flexibility in utilisation. The borrowed funds may be used for home renovation, medical expenses, education, business needs, or debt consolidation, providing borrowers with versatile financial support.
The interest paid on a home loan top-up is eligible for tax benefits under Section 24(b) of the Income Tax Act. This allows borrowers to claim a deduction of up to ₹2 lakh per year on the interest paid on the top-up loan, provided the funds are used for the purchase, construction, or renovation of a residential property.
If you are considering a home loan top-up, comparing interest rates across lenders on Bajaj Markets can help you make an informed choice. Below is a list of leading financial institutions offering competitive home loan top-up rates along with their maximum repayment tenures.
| Lenders |
Starting Interest Rates |
Maximum Tenure |
|---|---|---|
| Bajaj Housing Finance Limited |
7.40% p.a. |
384 months |
| ICICI Bank |
9% p.a. |
360 months |
| Truhome Finance |
11.5% p.a. |
300 months |
| L&T Finance |
7.65% p.a. |
300 months |
| LIC Housing Finance |
8.65% p.a. |
360 months |
| Home First Finance Company |
9% p.a. |
240 months |
Disclaimer: The details mentioned above are subject to change at the lender’s discretion.
By providing details such as loan amount, tenure, and interest rate, you can instantly view the EMI, total interest payable, and overall repayment amount. This free tool offers a convenient way to plan finances effectively and compare lender offers without the need for manual calculations.
This loan option provides financial flexibility and helps you make the most of your existing home loan relationship. Here are some key benefits you can enjoy:
You can secure a home loan top-up at an interest rate already applicable to you, or even at a lower borrowing rate
You can use the funds for various purposes, from renovating your home to covering registration or transaction costs
Depending on your lender, you may also be able to use the top-up amount for personal or business-related expenses
If the funds are used specifically for construction or renovation, you can claim tax benefits under the relevant sections of the Income Tax Act, 1961
Given that you will be dealing with the same lender for a top-up, your approval will come in relatively quickly and easily
A home loan top-up provides convenient access to additional funds, but it also comes with certain limitations. Understanding these drawbacks is essential to ensure the facility aligns with long-term financial objectives.
Eligibility is restricted to existing home loan borrowers with a strong repayment history, making it unavailable to new applicants or those with poor credit records
Adding a top-up increases the overall outstanding loan amount, which may result in higher EMIs or an extended repayment tenure
The sanctioned top-up amount is limited and varies by lender, thereby reducing flexibility in meeting larger financial requirements
Extending the tenure of a top-up loan can lower immediate EMIs, but significantly increases the total interest payable over time
Lenders have a set of basic conditions that applicants must meet to qualify for a home loan top-up. While exact requirements may vary, most financial institutions follow similar guidelines:
You must be an Indian resident and an existing home loan borrower with a satisfactory repayment history
You must be either salaried or self-employed
For salaried applicants, lenders expect 2-3 years of work experience
For self-employed applicants, a business track record of 3-5 years is usually required
You must be at least 21-23 years old at the time of application
The maximum age at loan maturity usually ranges between 60-70 years, depending on the lender and employment type
You should have made at least 6 to 12 months of timely EMI payments on your existing home loan, with limited flexibility for minor delays
You must maintain a good credit score, typically 725 or above
As an existing home loan borrower, the document requirements for a top-up loan are generally minimal. In most cases, submitting updated income proof is sufficient to process the top-up, as the lender already has the necessary documents on file.
Applying for a home loan top-up is a simple process. You can choose from one of the two following ways:
Visit the bank or NBFC branch with which you currently have a house loan account and apply for the top-up loan directly.
Log in to the bank or NBFC website and apply for the home loan top-up online. All you have to do is leave your contact details, and a bank representative will contact you.
When a home loan top-up is used specifically for constructing, renovating, repairing, or extending a residential property, it can offer significant tax benefits.
Interest payments on a top-up loan can be claimed as a deduction under Section 24(b) of the Income Tax Act, 1961.
For a self-occupied property, the maximum deduction on interest for renovation or repair is typically ₹30,000 per year. If the property is rented out or let, there is no upper limit on the interest deduction.
If the top-up loan is used for purchasing or constructing a property, both the principal and interest components qualify for deductions.
The principal repayment can be claimed under Section 80C, up to ₹1.5 Lakhs annually. The interest component is eligible under Section 24(b), usually up to ₹2 Lakhs per year for self-occupied homes.
When applying for a home loan top-up, it is important to keep a few factors in mind:
Existing home loan borrowers with a consistent repayment record can secure a home loan top-up. Typically, lenders allow this facility after at least 6 to 12 months of regular EMI payments. Salaried, self-employed, and NRI borrowers may also be eligible.
The loan amount depends on factors such as the property’s current market value and repayment history. Most lenders offer a percentage of the property’s value, based on their policies.
The tenure for a home loan top-up typically matches the remaining term of your existing home loan. On Bajaj Markets, some lenders offer top-up tenures as long as 32 years, depending on your profile and loan terms.
No additional security is required for a home loan top-up. The existing property that serves as collateral for your home loan also secures the top-up loan.
Yes, you can use a home loan top-up to cover emergency medical expenses. It is a quick and convenient way to access funds without taking a separate personal loan or liquidating your investments.
Yes, if you apply for a top-up loan with a co-applicant, that person essentially becomes a co-borrower and, as such, is liable for loan repayment and other responsibilities. If the debtor cannot repay the loan, the co-applicant is held equally responsible.
A home loan top-up is considered a good choice for existing borrowers. It offers lower interest rates than personal loans, requires no additional security, and can be used for various purposes. The repayment period is also longer, making EMIs more manageable.
Top-up loans usually carry slightly higher interest rates than your original home loan. However, they are still cheaper than personal loans, and your EMI will increase based on the new total borrowed amount.
Usually, the tenure of a top-up loan matches the remaining term of your existing home loan. Some lenders, however, may set a shorter repayment period based on their internal policies. Longer tenures help keep EMIs affordable.
Applying for a top-up loan can cause minor changes in your credit score. A hard credit enquiry may slightly lower it, but timely EMI repayments can offset this effect. Managing the loan responsibly will help maintain a stable credit profile.
Yes, you can transfer both your home loan and top-up loan to another bank through a balance transfer. Many lenders offer lower interest rates and may provide an additional top-up facility during the transfer for extra financial flexibility.
Approval typically takes 3 to 7 working days, depending on how quickly documents are submitted and verified. As an existing borrower, you may benefit from faster processing.