Can I get home loan top up instead of personal loan?
It is a good idea to get a Home Loan top-up when you need funds as the interest rates will be much lower than that of a Personal Loan.
Just like a top-up recharge on your mobile when you run out of currency, similarly a top-up loan on an existing Home Loan can be done when you are running low on funds. The usual tenure of a top-up Home Loan is 10 years and it is offered only after the completion of a few years of the actual Home Loan.
Banks consider your repayment track record over the last few years before disbursing a top-up loan on your existing Home Loan.
The current outstanding loan amount, market value of the property and your past repayment history are the major factors banks take into account before they disburse the top-up loan.
The upper limit of the total Home Loan (including top-up loan) usually doesn’t exceed 70% of the current market value of the property. Every bank has its own method of calculating this upper limit and then disbursing the top-up loan.
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