What is a top up loan?

After taking a home loan, there are times when we are in desperate need of funds. In such circumstances, we often try borrowing money from family and friends and if help doesn’t come from them you go to a financial institution or a bank. There are numerous loan options available in the market. Personal loans are easily available and have higher interest rates as compared to other loans available in the market. There is also a type of loan available at banks which most people are not aware of called as top up loan.
What is a top up loan?
A top up loan is a type of loan which can be availed over and above an existing housing loan. Top up loans really help you when you have a financial crisis or need money to fulfill your requirements like home renovation, medical expenses or paying your educational fees
Eligibility criteria:
The Top-up loan can be sanctioned on the basis of your credit history. You can always approach an alternative lender, to reassign existing loan including a top-up. However, all the necessary documents have to be submitted as requested by the vendor or bank.
Tenure of the loan amount:
The top up home loan tenure is generally granted for a period of 15 years in the upper time-limit.
Loan Amount:
The maximum amount that you can avail varies from one lender to another. Some lenders cross check the combined loan - proposed top up loan and outstanding on your home loan. Your income factor also plays a major role. While some calculate the overall loan eligibility after taking into consideration your present gross earning and a margin of around 25%, on the basis of current property value. You can always use an EMI calculator to check your eligibility.