A top-up loan is when you take an additional loan from a lender on an existing loan with the same lender. Now the question you’ve asked is very pertinent given that there are other similar products in the market such as a personal loan or a credit card, etc.
However, there are numerous reasons why taking a top-up loan is advised over either taking a personal loan or maxing out one’s credit card. A few of them are:
- Lower interest rates
Top-up home loan interest rates are substantially lower than personal loans, credit cards or car loans. They range between 9% and 12% for most banks, thereby making them the cheaper option.
-
Longer tenures
You get a top-up loan for a relatively longer tenure (vis-a-vis a personal loan, car loan or gold loan).
- Easy processing Top-up loans are easily approved and disbursed, as you are already a home loan customer with the lender and have been paying your EMIs regularly over the last one year or more. -
Tax benefits
Top-up loans, if used for home repairs, construction or extension, or to fund your or your children’s education, can give you tax benefits.
A top-up loan is when you take an additional loan from a lender on an existing loan with the same lender. Now the question you’ve asked is very pertinent given that there are other similar products in the market such as a personal loan or a credit card, etc.
However, there are numerous reasons why taking a top-up loan is advised over either taking a personal loan or maxing out one’s credit card. A few of them are:
- Lower interest rates
Top-up home loan interest rates are substantially lower than personal loans, credit cards or car loans. They range between 9% and 12% for most banks, thereby making them the cheaper option.
-
Longer tenures
You get a top-up loan for a relatively longer tenure (vis-a-vis a personal loan, car loan or gold loan).
- Easy processing Top-up loans are easily approved and disbursed, as you are already a home loan customer with the lender and have been paying your EMIs regularly over the last one year or more. -
Tax benefits
Top-up loans, if used for home repairs, construction or extension, or to fund your or your children’s education, can give you tax benefits.