Everything You Need to Know About the Home Top-Up Loan
Lenders offer a home top-up loan to existing borrowers. Some lenders specify that the top-up loan can be used only for home-related purposes. But other banks might not have that restriction.
The ideal time to get a home top-up loan is when you go for a home loan balance transfer. Lenders consider your application for a top-up loan only when you have a good repayment history. Dig deeper into this detailed guide to know its benefits, eligibility criteria, and more.
Eligibility Criteria
The eligibility criteria for home top-up loans differ from one lender to another. But some common eligibility criteria across all banks are as follows:
- No more than one missed EMI during the previous year
- Any EMI bounce must be cleared before taking the next loan
- Repayment of six months of the current home loan
- Top-up home loans with balance transfer must have one year of clear repayment history
Some other general criteria include:
- 21 to 65 years of age
- Indian resident or NRI
- Self-employed or salaried individuals
Benefits of a Home Loan Top up
The different benefits of opting for a home loan top-up are as follows:
Fast Approval Process
Top up loans are offered to existing borrowers of a home loan. The lender has already evaluated the trustworthiness of the borrower. In most cases, you don’t have to provide additional documents for approval.
If you opt for the top-up after two to three years of taking the original home loan, you might have to submit documents like address proof, income proof, and bank statements. But the approval process is pretty fast and straightforward.
Favorable Interest Rates
The interest rate of your home top-up loan will depend on the following:
- Your eligibility
- Your relationship with the lender
- The lender’s policy
Usually, the top-up loan is offered at the same interest rate as your original home loan. Sometimes, the lender might agree to provide a lower interest rate. If you have a good rapport with the lender, they might even waive certain additional charges.
Longer Loan Tenure
The tenure of the top-up loan will depend on your original home loan. For instance, your top-up loan tenure can go as high as 20 years. Sometimes the top-up loan tenure is the same as the remaining tenure of your home loan.
Is Home Loan Balance Transfer Necessary While Getting a Top-up Loan?
When you apply for a top-up home loan from your existing lender, they might sometimes demand a high interest. A high-interest rate will mean having to bear a higher EMI amount. Using a home EMI calculator, find out how much you need to pay each month.
Compare the interest rate of top-up home loans offered by different banks. You should opt for a home loan balance transfer when you find a bank with a reduced interest rate. Sometimes, a home loan balance transfer enables you to get a higher amount than the home top-up loan.
Wrapping up
A home top-up loan comes with tax benefits when you use it for renovation, repair, construction, or extension. While the tax deduction has no limit for let-outproperties, a maximum of Rs 30,000 tax deduction is available for self-occupied homes.
If you are looking for a top-up home loan, come to Standard Chartered Bank. The bank offers favorable top-up home loan terms to both new and existing customers. StandardCharteredBank is offering faster processing, reduced login fees, best rates in the market, and more. Contact right away!