Home loans are long-term loans that can go on for as long as 30 years. With these loans, you can get cheap money to buy a house. The people who take out a home loan also get other benefits. A top-up home loan is one of these options. A Top-Up Home Loan is a type of personal loan you can get on top of your home loan.
The amount of a top-up home loan could be the same as or more than the total amount of your current home loan. The lender sets this limit based on how well you’ve paid back past loans and your most recent credit score. A top-up home loan is the easiest way to get credit for a wide range of needs, whether they are personal, business, or medical.
You can use the money you get from a top-up home loan for anything you want. No matter what you want to do with the money to furnish your home, take a trip abroad, or pay for a sudden medical emergency, you can get it through a top-up home loan.
1) Simple Criteria for Eligibility
- To get a top-up home loan, you must have an existing home loan with the same lender.
- You also need a home loan amount that doesn’t go over the amount you can get for a top-up loan.
- The bank already knows everything about your home loan, so you won’t have to send in a lot of paperwork.
- Since the age limit is the same as the one on your home loan, you would be eligible.
- You must have a good track record of paying back your home loan.
- The bank will look at your most recent credit score, so make sure you have it.
2) low-Interest rates
Most of the time, the interest rates on top-up home loans are the same or just a little bit higher than the rates on your main home loan. Because of this, a top-up home loan could help you save a lot of money on interest rates. This is especially helpful when you want to buy a new car or fix your house. Especially if the cost was not planned or was a surprise, it usually takes a lot less time to process top-up home loans than other loans to get the money quickly.
3) No Restrictions Regarding Fund Use
A top-up loan is like an unsecured or personal loan in that you can use the money for anything you want. It can be used for business, education, home improvements, vacations, etc. You could get a personal loan, which also gives you a lot of freedom, but a top-up loan is usually a better choice because the interest rates and processing fees are lower.
4) Flexible Repayment Options
Most of the time, the terms of a top-up home loan are the same as those of your original home loan. Other loans, like personal or gold loans, are not like this. The time you have to pay back a top-up home loan is based on how long is left on your original home loan. If you have a 16-year home loan, you can also get a 16-year top-up home loan. This is a great feature because it means you can get the money at a very low-interest rate and pay it back over a longer period.
5) Tax Benefits
Did you know that top-up home loans can give you tax breaks? Yes, you can get tax breaks on a top-up home loan if it was used only to build, fix, expand, or renovate a residential property. If the loan is used to buy a home that the person will live in, they can deduct up to Rs 30,000 from their taxes. If the loan was used to buy a rental property, there is no limit on how much you can deduct. Both are subject to the Rs 2 lakh tax deduction that can be taken on the interesting part of home loans every year.
6) The Overdraft Facility
The overdraft facility is a new feature that most home loans now have. With this service, you only pay interest on the money you use. This is like a credit or debit card where you only pay interest on what you spend. With this feature, you can pay off a home loan without paying a fee. It also might save you from any extra fees for being late. This way, you could use money from the home loan for any expense and pay off the balance when you have extra cash.
The best type of home loan in India is the top-up home loan. It has a lot of benefits for people who want to borrow money at low costs for various reasons. It is also helpful for people who need money in an emergency. Top-up housing loans can help many people because they have low-interest rates and are easy to pay back.