Why should you choose a top-up home loan? Here are 6 benefits
Home loans are long-term loans that can be extended for up to 30 year. These loans can be a great way of getting affordable financing to purchase a home. The borrower also gets additional benefits from a home loan. The top-up loan is one such option.
A top-up home loan is a personal loan that you can get on top of your existing home loan. The amount of a top-up loan could be equal to or greater than the total limit of your current home loan. The lender will decide the limit based on your credit history and repayment history.
A top-up loan home loan is the best way to get credit for different needs, whether it’s personal, business or medical. A top-up loan home loan is available to anyone. You can use the funds to furnish your home or travel abroad, or for an emergency situation.
1. Simple Eligibility Criteria
To be eligible for a top-up loan on your home, you must have a current home loan from the same lender.
- A home loan amount must not exceed the amount available for a top up loan.
- The bank already has all of the information necessary to process your home loan.
- You would naturally be eligible if your age is the same as that of your home loan.
- A solid repayment record is essential for a home loan.
- Banks will verify your credit score to make sure you are current.
2. Low Interest Rates
Top-up home loans have interest rates that are almost identical to or slightly lower than existing home loan interest rate. A top-up loan can help you save a lot of money on interest rates. This is especially useful for large-ticket expenses such as a new car or house renovation. This is especially true if the expense was unexpected or unplanned. You can also get the funds fast because the processing time for top-up loans to home is typically much faster than other loans.
3. There are no Restrictions on Fund Usage
A top-up loan can be used for any purpose, including personal or unsecured loans. You can use it for business, education, home renovations and vacations. A personal loan may be an option, as it offers the same flexibility. However, a top-up loan is often a better choice due to the lower interest rates and processing fees.
5. Flexible Repayment Options
A top-up loan to your home usually has repayment terms similar to the original loan. This is not true for other loans such as personal loans and gold loans. The repayment term for a top-up home loan is determined by the tenure of your original home loan. If you have a 16-year home loan tenure, the top-up home loan tenure can be extended to 16 years. This is a great feature because it allows you to get the funds at a lower interest rate and a longer repayment term.
5. Tax Benefits
You can receive tax benefits from top-up home loan loans If the loan was used for construction, renovation, extension or repair of residential properties, then you can get tax benefits. The maximum tax deduction allowed for a loan used to buy a home that is not occupied by a person is Rs 30,000. If the loan was used for the purchase of a rental property, there is no limit on the deduction. These are subject to the Rs 2 lakh per year total tax deduction on home loans interest.
6. Overdraft Facility
The ‘overdraft facility is a new feature in most home loan products. This facility allows you to pay interest only for the amount that you use. Similar to a credit card, you only pay interest on the amount that you use.
This feature allows you to make home loan payments without any penalties. You can also avoid additional late fees.
You can then use your home loan funds for any purpose and repay the balance when you have enough money.
The best home loan product in India is the top-up loan. The loan offers many benefits for borrowers who are looking to get low-cost funding to fund a variety of purposes. This loan is ideal for those in urgent need of funds. A large number of people can benefit from top-up home loans because they have low interest rates and are easy to repay.