With the easier availability of various financing options, you can now address your financial requirements without hassle. However, some loans come with a higher rate of interest and may end up straining your finances in the long run. Hence, it’s better to opt for top-up loans if you carry out a home loan balance transfer.
They are easy to apply for and charge a much lower interest rate.
What is a top-up loan?
You can apply for a top-up loan when you do a you apply for a home loan balance transfer.
The criteria for getting a top-up loan is timely repayment of your home loan EMIs. Financial institutions will consider your top up loan application if you have a good repayment history.
What are the benefits of a top-up loan?
When you require additional monetary assistance while repaying your home loan, a top-up loan is a convenient source of finances. Here are the benefits of a top-up loan:
- If you avail a top-up loan when you opt for a home loan balance transfer, the documentation process and the loan disbursement process are minimal.
- When you’re applying for a top-up loan, you don’t have to disclose the purpose of doing so. You can use it for personal expenses like funding a home renovation or a vacation.
- But, if you invest the loan amount towards home improvement, you can claim a tax deduction on the interest paid under Section 24 of the Income Tax Act.
- Another benefit of taking a top-up loan is that you can utilise the funds to close existing unsecured debts. These debts may have high-interest rates, so if you want to save some money, clear your debt with the help of a top-up loan.
- If your existing home loan has a high rate of interest, you can choose a for a home loan balance transfer facility to lower your payable interest.
What are the benefits of a top-up loan?
Since your top-up loan is an add-on to the home loan balance you don’t have to submit any additional collateral. But, failure to pay instalments of this loan on time has a similar outcome as defaulting on home loan payments.
If Now when you know how convenient getting a top-up loan is, don’t hesitate to take the plunge when you face a financial crunch.
