Things to Know About a Top-up Loan

What is a Top-up Loan?

A top-up loan is a loan option extended by lenders to existing borrowers who already have a Home Loan or opt transfer their Home Loan balance. Top-up Loans enable borrowers to access extra funds over their current loan amount without the necessity of a separate, lengthy application. The eligibility for a  Top-up Loan Loan is generally contingent on the borrower's repayment history and the current market valuation of the property. These loans often come with competitive interest rates and can be used for additional housing purposes, such as home renovations.

Features of Top-up Loans

Top-up Loans come with several beneficial features such as: 

Competitive Interest Rates

Top-up loans usually have interest rates similar to existing Home Loan rates, or they may be a few points higher than the original loan rates. Even then, Top-up interest rates are comparatively lower than the rates of unsecured loans.  

Flexible Tenors

The maximum Top-up loan amount availed on a home loan can vary as per the lender’s policies and discretion. Generally, one may get funds worth Rs.1 Crore*, or higher, basis eligibility.

High Loan Amount

The maximum Top-up loan amount availed on a home loan can vary as per the lender’s policies and discretion. Generally, the net balance does not exceed 70%* - 80%* of the property’s value against which the original house loan was availed.  

Eligibility Criteria for a Top-up Loan

The Top-up loan eligibility parameters on a Home Loan may differ among lenders but the usual requirements are for salaried applicants typically are:

• The applicant should be between 23 and 75 years** of age.  
• Salaried employees should have a minimum work experience of three years
• They should possess an excellent credit report and CIBIL score of 750 +

**The upper age limit is considered as age at the time of loan maturity. Additionally, the upper age limit for applicants is subject to change, depending on the property profile.

Benefits of Top-up Loans

A Top-up on your Home Loan extends the following advantages: 

• A Top-up allows you to meet any housing requirement. 

• It entails minimal documentation.   

• Since you already have an existing house loan, the application process and eligibility parameters are less rigid. 

• Top-up repayments are relatively easier due to lower interest rates and flexible tenors. 

*Terms and conditions apply.