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Home Loan
What is a Home Loan Top-Up and How It Works?
2 mins Read | 6 Years 6 Months Ago
If your Home Loan isn’t sufficient to meet all the financial requirements of your home, you can apply for a top-up loan over and above your existing loan. Here is everything about top-up loan and Home Loan.
What are Home Loans?
Home Loans are generally taken to purchase a house, construct a house or to renovate/rebuild your existing house. Your Home Loan eligibility depends on your income and your repayment capacity. Higher your income, higher will be the approved loan amount. Most lenders approve a loan amount between 75% of the principal value of the property. While the remaining 25% is expected to be paid by the borrower. The amount that is paid by the borrower is known as ‘one’s own contribution’. Even if a person is eligible for a higher loan amount, it is advised that the person makes some kind of down-payment as that will lower the interest rate on the Equated Monthly Instalment (EMI).
What are the features of a Home Loan?
- Home Loan interest rates are reasonable and can be negotiated with the bank/financial institution.
- Easy loan application and documentation process.
- You can select smaller EMIs with longer tenure.
- It also offers ‘Balance Transfer’ feature which allows you to transfer your existing Home Loan from one bank to another.
- The top-up Home Loan is a feature that is offered on the existing Home Loan.
- Few customers also get to enjoy Instant Home Loans.
What is a Top-Up Home Loan?
Top-up Home Loan is given over and above the existing Home Loan. This loan can be used to furnish your home and renovate your home.
What is the Top-Up Home Loan eligibility?
Anyone is eligible for a top-up Home Loan if they have taken a Home Loan. But you have to wait for at least one year before applying for a top-up loan. The top-up loan amount is calculated based on the principal Home Loan amount and approved accordingly.