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General Article
19 April 2018

How Top-up Loans Help You Purchase Your Dream House or Office Space?

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Everyone has a dream of owning his/ her own house. But with rising prices of real-estate, not many can afford to pay for it from their own pocket. Hence it is wise to consider loan against property. The lenders assess the property, check your credit score, your salary, and other determining factors to fix a loan amount as per your repayment capacity. Sometimes, banks tend to offer a lower interest loans based on your current income. Still, you may fall short of funds to purchase the property. This is where top-up loans come into the picture.

What are top-up loans?

A top-up loan is a loan that is offered as an extension to an existing housing loan or commercial property loan. Being different from a personal loan, it helps you when you during a financial crisis or to meet other needs like home or office renovation, purchase of furniture, installation of equipment etc. in your house or office, when you do not have sufficient funds to purchase them on your own. It can also be used to pay off debts of moneylenders; medical expenses etc. Top-up loans have a tenure of up to 15 years.

When are top-up loans needed?

While buying a property, one’s funds tend to get exhausted, especially if that person is a young individual or if he doesn’t have sufficient funds.  It can also happen that the loan against property granted by the bank is not sufficient and more funds are required to pay for the property.

When does one qualify for a top-up loan?

A top up loan can be sanctioned by the bank based on the repayment history of that individual. If the bank sees that the existing loan against property is being paid on or before the due date regularly, the bank sanctions a top-up loan. You do not necessarily have to take up a loan from the same bank. You can take a loan from any bank of your choice. The bank you will verify with the bank that you have taken your loan against property, and whether you have made your payments on time.

Benefits of a Top-up loan

  • No additional guarantee required: A top-up loan is based on your existing loans. So there is no need of taking additional details all over again. The bank uses the same details for your top up loan.
  • No limitation on the usage of the funds: When you take up a top-up loan, there are no restrictions on when and where you use the cash. No bank or financial company can question you on the usage of the funds granted.
  • Low-interest rate: Interest rates of top-up loans are much lower than gold loans or personal loans. The tenure of top-up loans is also higher as compared to gold and personal loans.

This is all you need to know before taking up a top-up loan. It is a useful benefit, especially in the recent times where individuals want to be more independent and wish to settle down.

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