Importance of Top-up Home Loan Comparison

Home sales in India increased to 33,403 in September 2020, as per a report from the top 8 cities, including Bengaluru, Hyderabad, and several others. The home sales boom can be attributed to affordable mortgage loans, reduced price of residential property, availability of home finance, etc.

It is the best time for intending home buyers to invest in their dream property, owing to the current lowest ever repo rate at 4%. Nevertheless, existing borrowers can also reap the benefits of low interest rate by opting for a top up loan.

Besides lowering the EMI burden, it also offers added benefits that help in addressing any financial obligations. However, to settle for the best deal, it is imperative to compare different lenders to raise the maximum funds through this facility.

Importance of top up loan comparison

By comparing different top up home loan, individuals can benefit in the following ways.

• It helps in availing of the maximum loan amount on top of their existing loan.
• Borrowers can negotiate for a better interest rate on both outstanding loan balance and top up amount.
• They can settle for the lender who offers better service terms.
• Borrowers can reduce their EMI burden by choosing a lender who offers the lowest rates and minimal charges.

However, first, individuals need to know what a home loan top up is.

What is a home loan top up?

A top up home loan is an additional fund that borrowers can avail on top of their primary home loan. For instance, if an individual already has a sanctioned home loan of Rs.50 lakh and he/she requires an additional fund of Rs.20 lakh, a top up loan can fulfil this requirement.

Individuals can avail this credit from their current lenders without pledging any additional asset. However, the eligibility of this fund depends primarily on the repayment pattern and creditworthiness of the borrowers.

Individuals can also use a home loan eligibility calculator to check if they can avail of this fund or not.

In another instance, lenders offer this additional fund when one decides to apply for home loan balance transfer. It allows borrowers to shift their outstanding loan balance to a new lender to service the remaining amount at a lower interest rate. Hence, a top up home loan comes as an additional benefit of a home loan transfer.

What are the benefits of top-up loans?

Following are some of the advantages of availing a top up loan.

• Instant access to funds

While applying and disbursing a new loan takes a lot of time, a home loan top up process is fast and takes only a few hours. Hence, you can fulfil your urgent financial needs with a top up loan.

• No end-use restrictions

Borrowers can use this fund for any purpose without any restrictions. For instance, they can use it for home renovation, furniture purchase, etc.

Top HFCs offer high value top up loans with competitive home loan interest rate. They also provide pre-approved offers that simplify and expedite loan processing. Besides home loans, such offers are also available for various financial products like loans against property and several others. You can check your pre-approved offer simply by entering your name and contact number.

• Minimal documentation

Since this fund is available on an existing home loan, you do not have to offer additional documents to get the funds. It makes the home loan top up process even more convenient and faster.

Besides, a top up home loan does not affect the credit score as it does register as a new loan. Hence, individuals can avail of additional funds, keeping their CIBIL score intact.