Home Loan top-up is a facility offered by banks or housing finance companies that allows you to apply for additional finance over your existing Home Loan. At times, the Home Loan might not suffice all your financial needs while building your dream home. This top-up can be utilised to furnish or renovate your home at the same interest rate as a Home Loan.
In this article, we will discuss everything about what is a Top-Up Loan on a Home Loan, its eligibility, benefits and how to apply for the same.
What is Home Loan Top-Up eligibility?
Housing Loan eligibility depends on many factors. It is offered to those applicants who fit the income criteria and can repay the loan on time. Other than income, other factors like age, profession, investment history, credit score, etc.
However, applying for a top-up on existing loans has a separate set of eligibility criteria. Since you already have a Home Loan, it is implied that you have cleared the basic home loan criteria. So apart from those, below are the criteria you must fulfil if you want a Top-Up Loan on a Home Loan:
- You must have an existing Home Loan.
- Existing Housing Loan borrowers must have a clear repayment history.
- Not more than one EMI should have bounced within the last year, and it should be cleared before the next EMI date.
- You are eligible for a top-up after repayment for 6 months is clear.
- In case you are transferring your Home Loan from another bank and applying for a Top-Up, you will be required to have a clear repayment history.
Advantages of Top-up Home Loan
Top-Up Loan facility serves as a great monetary instrument, helping homeowners not worry about taking additional loans while fulfilling their home necessities. Since it is added to an existing loan, you don’t have to submit additional collateral or income proofs. Here are some of the benefits that explain why top-up is the best option while you build your dream home:
1. High-value loans: You can get additional finance of up to Rs.50,00,000 along with your existing Home Loan.
2. Tax benefits: Similar to any Home Loan, interest paid on the Top-Up Loan is available for tax deduction under Section 24(b) of the Income Tax Act. With these benefits, you can save a lot of your hard-earned money.
3. Utilisation of loan for multiple purposes: Top-Up Loans can be availed for main purposes, such as permitted construction of residential or commercial premises and personal or business premises.
4. Repayment along with Home Loan: With Top-Up Loan plans, you don’t have to worry about paying additional EMI. Instead, it will be repaid along with the existing Home Loan. Additionally, the tenure of the Top-up loan will be the same as the existing Home Loan.
5. Low interest rates: You do not have to pay higher interest rates when you borrow extra money to complete the construction of your home. In fact, the interest rate remains the same as the home loan interest rate, saving you lots of money.
How to get Home Loan Top-Up: Application Procedure
If you have a Home Loan with Axis Bank, we already have your personal and financial information required to process your loan.
You can apply for the Top-Up Loan online by following the process below:
- Visit Axis Bank’s Home Loan Top-Up page.
- Click on “Get Instant Funds”
- Enter your registered mobile number or alternate information.
- Enter OTP and proceed with the process.
- Select the purpose of the loan and enter the other necessary details.
- You will receive the disbursement update via email or SMS.
Also Read: Top 10 advantages of taking a Home Loan
What is the Home Loan interest rate for Top-Up Loans?
Depending on your existing loan amount and the additional loan amount, your EMI will vary. Your interest rate for the Top-Up Loan will be the same as your parent loan interest.
Click here to check
Home Loan interest rates.
Additionally, you can use our Home Loan EMI calculator to determine your EMI and go for the best-suited plan.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
