Updated: Aug 18, 2022, 16:15 ISTShare:
When you need more money after taking a Home Loan or a Loan against Property, it's best to opt for a Top-up Loan. It's cheaper than a Personal Loan. You can use it to finance other needs, like medical expenses, education, home renovation/extension and marriage.
Here are five things to remember before you take a Top-up Loan:
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Documentation is simple when you apply for a Top-up Loan, since you have an existing loan from the same lender. You may be able to apply for the Top-up Loan online, which makes the process even more convenient
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Some banks offer Top-up Loans, up to Rs 1 crore, and for tenures of up to 10 years
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Top-up Loans have quick disbursals. It could be instant or within 24 to 72 hours
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The interest rate on Top-up Loans is significantly lower than the interest rate on Personal Loans
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You may be able to take a Top-up Loan in combination with an Overdraft, which offers various benefits, like quick disbursal, paperless procedure, and lower interest rate. Moreover, you pay interest only on the amount you have borrowed from the Overdraft facility.
There are a few more things to keep in mind. As in the case of interest rates on Home Loans, the rate for a Top-up Loan will be determined based on your profile as a borrower.
