Updated: Aug 18, 2022, 15:17 ISTShare:
When you are already servicing a Home Loan, there might be times when you face a sudden financial crunch or urgency. Dealing with such circumstances becomes easier, when you avail a Home Loan Top-up or Personal Loan. But, which one is the most suitable funding option? In this article, let’s get to know which one you should opt for.
Financial urgency may arise anytime. When you have a liability like a Home Loan, it can add to more stress. To overcome the crunch, you may tend to choose loan options, like a Top-up Home Loan or a Personal Loan. It is obvious to get confused, when you do not have much information about the financing options. Both these loan categories can help you get out of the financial crisis, be it a medical emergency, child’s education, business expansion, paying off debt, among others. Both these loans have their specific features, but now the question arises: Which loan does one choose between a Personal Loan and a Home Loan Top-up?
What is a Home Loan Top-up?
If you avail a Home Loan from ICICI Bank, you could also be eligible for a Home Loan Top-up. This is an additional loan that customers can get only over and above an existing Home Loan. The funds can be used to fulfil various requirements, such as higher education, medical expenses or any other personal need. At ICICI Bank, you get the Top-up Home Loan with a combination of Overdraft facilities.
Features of a Home Loan Top-up:
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You can avail a Top-up Loan of up to 100%, of the original loan amount sanctioned
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The tenure of the loan is up to 20 years
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The documentation is simple and less time consuming
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Quick processing of the loan along with an Overdraft facility.
What is a Personal Loan?
A Personal Loan is an unsecured loan, which means you don’t need to pledge any collateral to avail the funds. One of the reasons why several people opt for this type of loan is because it gets disbursed quickly, and it can be used for different purposes. It is the best option in case of personal urgencies that can crop up anytime in your life.
Features of the Personal Loan:
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No need to provide a collateral or security to avail the loan
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Minimum documentation required
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No restriction on the end use of the loan
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Once the Personal Loan is approved, get instant funds credited into your account.
Top-up Home Loan versus Personal Loan:
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It is a good option to take a Top-up loan on the existing Home Loan as the Home Loan interest rate is much lower as compared to a Personal Loan
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In terms of the tenure, Top-up Home Loans usually have a longer tenure. On the other hand, Personal Loans have shorter tenure. Due to longer tenures, the eligibility to secure a Top-up loan is much higher as compared to a Personal Loan
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When you apply for a Personal Loan with ICICI Bank, the processing time and disbursement is quicker. Similarly, the processing time of a Top-up Home Loan is also quicker, as the bank already has your documents and verified details.
Which one should one choose? A Top-up Home Loan or a Personal Loan?
When you are going through a financial crunch, both Top-up Home Loans and Personal Loans serves a specific purpose and can be a good option. If you already have an existing Home Loan, it is much easier to apply for a Top-up Home Loan, as it requires negligible paperwork. Choosing a Personal Loan can be extremely useful, in case of emergencies, child’s education, home renovation, among others.
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