With the Reserve Bank of India slashing its repo rate by 40 basis points in May 2020, home loans are slated to become more affordable than ever. While it is good news for potential borrowers, those with an existing loan can also benefit from an expected lowering of interest rates caused by the dip in repo rate.
Further, they can also utilize the benefit of lowered rates by opting for a home loan balance transfer and shifting their existing loan liability from one lender to another. In doing so, they will also be eligible to avail of a top-up loan on their existing loan amount.
What Does a Top-up Advance Entail?
Available as an additional amount over and above the existing loan, a top-up loan can aid the borrower to meet any unforeseen expenses that may arise during their home loan tenor.
While most individuals utilize it to meet home renovation or allied expenses, the loan available as top-up does not impose any end-use restrictions. By its virtue, the loan amount can also be utilized to consolidate existing debt, purchase a new car or even pay for a holiday.
Furthermore, since this amount is available over an existing home loan, an individual does not have to undertake a separate application process to avail it.
Following is an elaboration on all you need to know about top-up loans on home loans before applying for one.
Who Can Avail of a Top-upon Their Home Loans?
Individuals can avail of a top-upon their existing loan amount only if they opt for a home loan balance transfer facility. Nonetheless, the criteria to avail a top-up might vary from one lender to another. With financial institutions like BHFL, however, merely satisfying the above requirements can allow a borrower to avail a high top-up loan amount.
Furthermore, the HFC also provides pre-approved offers that make the process of availing the advance trouble-free and prompt. Such offers are available on a plethora of financial products, including home loans, loans against property, etc. You can check your pre-approved offer easily by providing your name and phone number.
What Are The Benefits of a Top-up Home Loan?
There are several reasons that make a top-up home loan the better option to avail instead of applying for a fresh loan. Few of these are as follows –
A High Loan Amount
Borrowers can avail up to Rs.50 lakh as a top-up advance on their existing loan amount, and utilize it to meet any number of financial requirements. From medical emergencies to renovation requirements, higher education to travel plans, this amount can help meet diverse financing needs with ease.
Eliminates The Hassle of Multiple Loan Applications
A top-up home loan allows borrowers to consolidate their debt without making a separate loan application. This way, one can avoid making multiple applications and raise finance without going through lengthy procedures and paper works.
A top-up loan is processed much faster than a fresh loan option. As a result, individuals can fulfill any urgent financial need with a top-up loan conveniently.
Attractive Interest Rates
The interest rate levied on a loan top-up is often lower than other forms of credit. This makes repaying the borrowed amount much easier. It is one of the most significant ways through which you can benefit from a top-up loan.
No Additional Charges
One of the typical benefits of a Home top-up loan is that it can be easily availed without paying any additional charges or by paying a minimum fee amount. This makes it a much more cost-effective option as opposed to availing a fresh loan, wherein the borrower will be required to pay several one-time charges and a processing fee.
Option to Choose a Longer Tenor
Since opting for a top-up loan over and above the existing amount increases one’s overall repayment liability, he/she can negotiate for a longer tenor for loan repayment. It allows the borrower to lower their EMIs and makes repayment significantly easier.
Applying for a top-up advance does not require any additional documentation on the borrower’s part. It, thus, makes for an extremely beneficial and convenient option when it comes to meeting unforeseen and sudden financial requirements.