Home Loan – If you’re already paying EMI for a current housing loan and require more cash, you should go in for a top-up loan. Here’s a glance at the eligibility criteria, tenure and the way you can opt for this loan.
When someone purchases any property, it typically involves taking a housing loan and conjointly exhausting a considerable amount from one’s savings, to fund the margin cash. Moreover, home purchasers conjointly try and avail of the maximum credit quantum, to purchase a home. Sometimes, a scenario could arise, wherever you require a considerable quantity of cash, whereas you’re conjointly paying off for a current housing loan. There’s an additional backup referred to as a ‘top-up home loan’, to tackle such circumstances.
Must Know When You Need More Money After Taking A Home Loan
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Sources of a top-up loan?
A top-up loan can be referred to as extra fund that one gets as a loan, over and on top of your existing housing loan. Several lenders have a minimum qualifying tenure that the current housing loan ought to have run before you become eligible for the top-up loan. The tenure typically varies from six months to 1 year. Moneylenders conjointly insist that the house that the loan was taken, be completed.
For availing the top-up housing loan, you ought to have an excellent repayment history on the current housing loan. Otherwise, the moneylender won’t commit any more funds, once the prevailing loan is already at stake.
If your existing moneylender isn’t willing to sanction you a top-up loan, you can look out for another moneylender, to avail a top-up loan. In such a case, you’ll have to adhere to all the documentation and KYC formalities, with the new moneylender.
Quantum and tenure of the loan:
Your earnings might have elevated, once your original housing loan is disbursed. Similarly, the worth of the property might also have appreciated. All these factors raise your overall credit eligibility. The quantum of top-up loan that you can avail, depends highly on the moneylender. Some lenders cap the average of the projected top-up loan and balance outstanding on your housing loan, to the sanctioned amount for the house loan, subject to the margin demand and your earning level. Various lenders could calculate your overall loan eligibility, taking into consideration your current earning capacity and a margin of around 25%, on the present market worth of the house.
The tenure of the top-up loan conjointly varies according to moneylenders. The maximum top-up loan tenure is mostly restricted to 15 years. Some moneylenders might also limit the tenure, to the remaining tenure of the house loan, to confirm that the compensation of the house loan along with the top-up loan is completed at an equivalent time. The maximum tenure of a top-up loan is additionally restricted to the residual lifetime of the house.
A purpose for opting for a top-up loan:
The top-up loan is often used for any personal wants, like wedding or education of kids, holidays and to buy consumer goods, like televisions, refrigerators, laptops, etc. However, the top-up loan can’t be used for any speculative activity, like investing in shares, etc. The moneylender could impose a restriction demanding a proposition from you, stating the proposed use of the loan.
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Final Point – Home Loan
As the top-up loan is given on the collateral of the house, the interest rates are lower compared to a personal loan. Likewise, the interest rate on a gold loan is more than a top-up housing loan. Moreover, the tenure of a gold loan or a personal loan is comparatively lesser than what’s offered on a top-up housing loan. ( Home Loan )