What are top-up loans and how they benefit you?

A facility to avail more funds on an existing loan is known as a top-up loan. Why go for the loan formalities all over again if you need more funds when you have a loan that has been disbursed and already under repayment.

By minimizing time, cost, and efforts, you can get additional funding on the same loan. All you need are your existing basic documentations to provide you with more funds. Just the minimal papers are enough to avail of the top-up loan.

A top-up loan lets you easily fulfill your dreams with a little more financial aid. The housing companies or banks usually provide you with a top-up loan to add to your existing home loan.

These days, real estate is something that everyone wants to invest in and a top-up loan can help you with that by covering your extra charges.

The following example will help you understand the actual meaning of a top-up loan:

For instance, your home loan of Rs. 70 lakhs get approved by your bank for a period of 12 years. After 6 years, the outstanding balance on your loan is Rs. 40 lakhs. So, if you are considering a renovation for your house, you can use a top-up loan (an additional loan that tops-up your home loan). This will help you in financing the renovation instead of going for a personal loan.

A loan that you get over and above your home loan and helps in your housing finance is called a top-up loan. This is similar to you topping-up your mobile balance when you are running low on balance.

Features of Top-Up Loan


This loan isn’t freely available to anyone or everyone who has taken a home loan from a bank. A lot of factors are taken into consideration before the top-up loan is granted. The repayment ability, past track records, etc are checked by the bank. Only if your credit score is favorable, will the banks grant the top-up loan. They will also be charging some processing fees. Many times they waive the processing fee. It depends on the bank.


Usually, top-up loans are given for the outstanding period of the already existing loan or mostly for a period of 10 years. This again depends from bank to bank.

Interest rate

The interest rates are usually higher when it comes to a top-up loan. But, if you compare it to your personal loan, they are quite cheap.

A top-up loan can be used for expenses like home renovation, business expenses, marriage expenses, or any other personal need. Now that you know how easy it is, don’t hesitate to take a top-up loan.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.


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