Govt of India


Why a top-up home loan can be better than business, gold, personal loan

06 Aug 2016

Why a top-up home loan may be better than business, gold, personal loanTop-up home loan better than business, gold, personal loan Taking a home loan is the best feasible way for your dream home. But home loans alone might not meet all of your financial needs. In reality, if you are looking for funds to renovate your home or meet your private or may be business expenses, a top-up loan for your present home loan can also prove to be a cost-effective answer. What are top-up loans? If you have taken a home loan and have made well timely repayments, then your bank may also give you the option of borrowing an additional loan equal to the amount of your current housing loan that you have paid thus far. A top-up loan, thus, is a loan provided to you over and above your house loan. "Top-up loans provide you the advantage to ride any financial crunch you may face while renovating or repairing your private home. You are also free to apply the funds for any other needs, as they come with no preconditions," says Sanjay Bansal, founder & CEO of affordablehomesindia.com. Eligibility Top-up loans may be availed best via current home loan borrowers. There are different preconditions too that you want to fulfill before you turn out to be eligible for such a loan. Minimum period: A top-up loan is available only after you've got started repayment of your private home loan for a minimum duration, depending on your bank. Usually, banks have a minimum compensation duration of 2-3 years before they consider you for a top-up loan. Proper compensation track report: You want to have a good repayment track document and a healthy credit score rating to be eligible for a top-up loan. If your private home loan repayments have been delayed or are erratic, or if your credit score is low, then your chances of getting a top-up home loan will reduce substantially. LTV limits: You are allowed to borrow only a certain percentage of your home loan as a top-up loan. For home loans, the LTV (Loan-to-Value) ratio is constant at 80-85% of the present cost of your private property. "So if you have availed 85% of your home cost as a home loan, you will be eligible for a top-up loan only when your property value appreciates, so that the outstanding loan amount, including the top-up loan, does not exceed 85% of the property value," says Bansal. Tenure: The tenure of top-up loan runs concurrently with that of your home loan. So when you have 10 years closing for your home loan compensation, your top-up loan tenure cannot exceed the remaining time period. Benefits No extra loan: A top-up is offered in your current home loan, as a result there is no need to provide any extra safety or loan. No precondition on utilization of funds: You may use the cash from a top-up loan as in step with your needs. So feel free to apply it for personal or business needs, or closer to home repair and renovation. Quick processing with low rates rates as compared to personal loans: Since top-up loans are offered most effectively if you have taken a home loan too, and as banks have already have done a thorough background check, this speeds up the loan processing time. Also, the interest rates on top-up loans are far lower as compared to those on personal loans, making them more pocket-friendly. Interest rates on top-up loans, however, usually tend to be 1.5 to 2.5% higher than those on home loans provided by the bank or a housing finance company. Still, top-up loans are a far cheaper option than personal and many other loans and also offer the advantage of a longer tenure, which helps reduce the EMIs substantially. As is evident from the table, at the same time as top-up loans are currently available in the 9.45-12% per annum range, banks and FIs charge 11.49-25% p.A. on private loans and 9.60-24% p.A. on gold loans. Even the processing fees are lower in case of top-up loans as compared to those on most other loans, which makes top-up loans a cheaper choice. When to and while not to take a top-up loan A top-up loan may be taken when you, as an existing home loan customer, have other financial necessities. "The amount taken as a top-up loan may be used for raising business capital or for big-ticket expenses such as wedding expenses, children's education or marriage, house maintenance, among others. However, as the processing time of a top-up loan may take several days, it will not be as easy as taking a gold loan, especially in situations like medical emergencies. How to opt for a top-up loan You may request your bank to provide you a top-up loan when your personal home loan fulfills the minimum tenure to be eligible for a top-up loan. You can also get a top-up loan from any other bank which offers home loans at lower interest rates and therefore you're planning to shift to that bank. A top-up loan is, therefore, a good way to raise funds. With low-interest rates and the freedom to use the money as per your requirement, it is, indeed, like a candy cherry at the top of your home loan cake. By Sanjay Bansal | Founder & CEO | Affordable Homes India|  

Pareena Laxmi Homes

Pareena Laxmi Homes

Discuss on this Topic

Pareena Laxmi Homes

Latest Real Estate News

Final hurdle on Dwarka e-way off, to be ready by March 2018 13 Jan 2017
New Delhi: The Northern Peripheral Road, the 24-km long 8-laned expressway awaiting completion since 2012, seems to be finally on the home stretch Read More
PM Awas Yojana: Realtors hail increase in carpet area for houses; stocks up 17 Nov 2017
The Centre on Thursday approved the enhancement of the carpet area of houses for the middle-income group (MIG) category under the Pradhan Mantri Aw Read More
Cabinet nod for Rs 25,700 crore convention centre at Dwarka 11 Nov 2017
NEW DELHI: The Cabinet on Friday approved Rs 25,703 crore for development of an Exhibition-cum-Convention Centre at Dwarka here to put the national Read More
Get your home custom-made the way you want In Gurgaon. 16 Sep 2017
PAREENA Developers offering an option to get one’s home custom-made the way one desires. Customisation in India is no more restricted to Read More
Create jobs to boost commercial real estate 16 Jul 2017
Realty consultants want the state to do whatever it takes to attract big names in the IT sector as that will create more job opportunities Read More
Realtors must enroll under Madhya Pradesh RERA to get land registered 16 Jul 2017
  The local stamp and registrar office has received fresh instructions to ‘discourage’ property registration by builders and c Read More
Under Real Estate Regulation Rules state cabinet excludes realty projects that are complete 60% 09 Jul 2017
  The state cabinet on Wednesday cleared the long-awaited Real Estate (Regulation and Development) Rules, framed under the Real Estate Reg Read More

Trending News

Signature Global Synera Sector-81 Draw Results 09 May 2015
Yesterday ( 8th May 2015 ) Signature Global announced the draw results of their affordable housing project  Synera located at Sector - 81 NH-8 road Gu Read More
Govt funding for 60 smart cities may be increased by Rs 6,400 crore 07 Oct 2016
NEW DELHI: In the second year of the Smart Cities Mission, the Ministry of Urban Development (MoUD) is looking for  Rs 6,400 crore push to one of Prim Read More
Now ED registers case in Rs 1,500-crore land acquisition scam in Gurgaon 08 Sep 2016
CHANDIGARH: The Enforcement Directorate has registered the case of Rs 1,500-crore land acquisition scam in Gurgaon that caused a big loss to farmers. Read More
Gurgaon selected to be first of '100 smart cities' project 01 May 2015
Union Power Minister Piyush Goyal and Haryana Chief Minister Manohar Lal Khattar announced that Gurgaon has been selected as a model for the '100 Read More
Next set of smart cities to be announced today 20 Sep 2016
Gurgaon : The Center has decided to declare the next set of smart cities for financing under the Modi-government flagship Smart City Mission on Tuesda Read More
Vivek Oberoi's firm launches affordable housing project 16 Sep 2016
NEW DELHI: On Thursday, Actor Vivek Oberoi declared the launch of Karrm Infrastructure Pvt. Ltd's. affordable housing project at Shahapur in Maharasht Read More
Maharashtra government will give incentive to affordable housing developers 14 Apr 2015
To buy a home in Mumbai & nearby is out of pocket of the common man. BJP led Maharashtra government in state will provide relief to middle class Read More

Lotus Homz Affordable Housing

Pareena Laxmi Homes

Zara Rossa

Value Added Services


Government Housing Scheme



  • Prime Minister Awas Yojana
  • Prime Minister Awas Yojana ( Gramin )
  • Samajwadi Awas Yojana
  • Deen Dayal Jan Awas Yojana
  • Mukhya Mantri Awas Yojna Rajasthan
  • Affordable Housing Policy 2013
  • Smart Cities Mission
  • DDA Land Pooling Policy 2018

Banking Partners



  • Corporation Bank
  • HDFC
  • IDBI Bank
  • LIC Housing Finance
  • Oriential Bank of Commerce
  • Reliance Home Finance
  • Bank of Baroda
  • SBI Home Loan
  • ICICI Bank Home Loan
  • India Bulls Home Loan
  • Axis Bank
  • PNB Housing Finance