{"id":316969,"date":"2019-11-22T13:59:34","date_gmt":"2019-11-22T13:59:34","guid":{"rendered":"http:\/\/tehelka.com\/?p=316969"},"modified":"2019-11-22T16:54:54","modified_gmt":"2019-11-22T16:54:54","slug":"everything-you-need-to-know-before-taking-a-top-up-loan","status":"publish","type":"post","link":"https:\/\/tehelka.com\/everything-you-need-to-know-before-taking-a-top-up-loan\/","title":{"rendered":"Everything You Need to Know Before Taking a Top-Up Loan"},"content":{"rendered":"

\"\"<\/span><\/p>\n

Housing loans in India are one of the most feasible financing options for purchasing a property.<\/span><\/p>\n

This long-term advance may continue for up to 20 years, making repayments convenient and affordable. Sometimes, however, the fund becomes inadequate to meet all financial commitments of a borrower. Renovating the house, medical emergencies, child\u2019s education, foreign trip, etc. call for significant funding. This is when a\u00a0<\/span>home loan topup<\/a><\/span>\u00a0emerges as a viable solution.<\/span><\/span><\/p>\n

Top-up loan highlights<\/span><\/b><\/span><\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span>Top-up loans qualify for exclusive tax benefits under the IT Act.<\/span><\/span><\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span>Being\u00a0add-on finance, no extra documentation is required.<\/span><\/span><\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span>No additional collateral is required to pledge against the top up loan.<\/span><\/span><\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span>Freedom to utilize funds at the borrower\u2019s discretion.<\/span><\/span><\/p>\n

Understanding a housing loan top-up\u00a0\u00a0<\/span><\/b><\/span><\/p>\n

A top-up is an additional loan availed over and above an existing home loan. This facility is available for customers who opt for\u00a0<\/span>balance transfer<\/a><\/span>.<\/span><\/span><\/p>\n

During a financial emergency, individuals usually liquidate assets, draw funds from savings or break investments to avail instant cash. Some even opt for loans, adding on to their financial burden of home loan EMIs. Instead of these, taking a home loan top-up is a more convenient and easily available option.<\/span><\/p>\n

There are various wayshow you can benefit from a top-up loan, viz. \u2013<\/span><\/p>\n

\u25cf\u00a0\u00a0<\/span>An all-purpose loan with no end-usage restriction<\/span><\/b><\/span><\/p>\n

While home loans are only for the construction or purchase of a property, a top-up loan can be utilized for both personal and business requirements. It is not compulsory to expend the funds on home improvement. As a borrower, you can address all bigger to smaller expenditures without any hassle.<\/span><\/p>\n

<\/div>\n

\u25cf\u00a0\u00a0<\/span>Tax benefits<\/span><\/b><\/span><\/p>\n

As per the Income Tax Act of India, a housing loan top-up also qualifies for tax benefits.<\/span><\/p>\n

\u2794\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span>Under Section 24, borrowers can claim deductions up to Rs. 2 Lakh on the payable interests. It is applicable for self-occupied properties that have completed within 5 years. In case your property doesn\u2019t meet this criterion, the claim amount comes down to Rs. 30,000.<\/span><\/span><\/p>\n

\u2794\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span>Under Section 80C, up to Rs. 1.5 Lakh can be claimed on the principal repayment.<\/span><\/span><\/p>\n

\u25cf<\/span>The longer tenure\u00a0for flexible repayment<\/span><\/b><\/span><\/p>\n

Top-up loan tenures can go up to 20 years or till the existing housing loan tenure. It usually depends on factors like borrower\u2019s profile, lender\u2019s policies, age, net income, and property value. Select a repayment schedule as per your convenience and financial commitments.\u00a0<\/span><\/p>\n

\u25cf\u00a0\u00a0<\/span>Competitive interest rates<\/span><\/b><\/span><\/p>\n

Top-up loan interest rates are lower and affordable compared to alternatives like gold or personal loan. It may be 1.5% to 2% higher than your home loan but feasible enough to bear than interests of new credit.<\/span><\/p>\n

\u25cf<\/span>Speedy approval with no documentation<\/span><\/b><\/span><\/p>\n

Being an add-on, these advances require no such additional documents to process. The lender may ask for some updated papers to check the latest data. For example \u2013 recent bank statements may be needed to check repayment of the home loan. It also speeds up the approval process so that you can meet your urgent financial needs easily.<\/span><\/p>\n

Check the amount you can avail using a top-up loan calculator online and plan out your finances accordingly.<\/span><\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span>Easy application process<\/span><\/b><\/span><\/p>\n

Either call your lender or apply for a housing loan top-up online.\u00a0 \u00a0<\/span><\/p>\n

Some reputed lender comes with customized pre-approved offers on a range of financial products including home loans, business loans, personal loans and more. These pre-approved offers make the loan availing procedure hassle-free and time-saving. You can find your pre-approved offers with your contact number and name only.<\/span><\/p>\n

Unlike fresh loans with a list of eligibility criteria, top-ups only require the borrower\u2019s repayment history to be sanctioned. If you have maintained a clean payment history of your existing home loan, you can qualify for a top-up loan easily. Go through the lending institution\u2019s terms and conditions and assess your requirements to make the funds\u2019 best utilization.<\/span><\/p>\n

\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Housing loans in India are one of the most feasible financing options for purchasing a property. This long-term advance may continue for up to 20 years, making repayments convenient and affordable. Sometimes, however, the fund becomes inadequate to meet all financial commitments of a borrower. Renovating the house, medical emergencies, child\u2019s education, foreign trip, etc. […]<\/p>\n","protected":false},"author":59,"featured_media":316970,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2818],"tags":[],"_links":{"self":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/316969"}],"collection":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/comments?post=316969"}],"version-history":[{"count":5,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/316969\/revisions"}],"predecessor-version":[{"id":316977,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/posts\/316969\/revisions\/316977"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/media\/316970"}],"wp:attachment":[{"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/media?parent=316969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/categories?post=316969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tehelka.com\/rest-api\/wp\/v2\/tags?post=316969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}