Know the Pros and Cons of top up loan
If you have an ongoing home loan and transfer it to a new lender offering a lower interest rate, you can apply for a top up loan.
Yes, it is one of the best benefits of availing a housing loan and switching to a new lender.
But what are the pros and cons of a top up loan?
Know in this post now!
What is a top up loan?
A top up loan is a loan available to you above and over your ongoing home loan on a home loan balance transfer. Once you have started repaying your home loan EMI and paid some EMIs, then you may become eligible for a top up loan. A top up loan amount may range up to Rs.1 crore or even more depending on your eligibility.
Pros of a top up loan
- A higher amount
You are allowed to borrow up to Rs.1 crore as a top up loan or even more by top lenders in India.
2. Flexibility to use it the way you like
You are free to use the top up loan amount for anything as per your needs and without restrictions.
3. Minimum documentation
The number of documents required for a top up loan is less — making the application process less complex.
Cons of a top up loan
- You need to be an existing borrower
A top up loan facility is available only to an existing home loan borrower. If your repayment history is not good, you may not be given the go-ahead for a top up loan.
2.EMI inflation
Yes, a top up loan lets you cover your diverse needs. But it is a loan, after all, and increases your debt liability.
3. You need to repay more
Once you apply for a top up loan, you need to repay more. The first EMI is that of an active home loan, along with the EMI of a top up loan. Overall, it affects your income and makes you repay more.
The pros and cons of a top up loan are now revealed. You can now decide if you should go for it or not.
