Most people in India opt for a home loan when purchasing a property. Despite the financing, many individuals still have to pay a lot of money from their savings in order to fund the margin amount. However, many individuals still find themselves in need of some extra money to meet the expenses of their property. To finance such needs, there is what is known as a Top Up Home Loan.
What is a Top-Up Loan?
This is an additional loan amount that one receives as a loan over and above the existing home loan. Different lenders have different minimum qualifying period for which the existing home loan should run before one become eligible for a top-up loan. Lenders can also insist on the construction of the real estate to be completed before the top-up loan can be availed.
Furthermore, your payment record of the existing home loan must be good for the lender to fund a top-up loan. This is because no lender will sanction additional funds when the existing loan is already at stake.
However, if under any circumstances, your existing lender is not willing to provide you a top-up loan, you can approach another lender for a top-up loan. In such a case, you will have to comply with all the formalities, eligibility criteria and submit a fresh set of documents as per the requirements of the new lender.
Amount of Loan and Period of Repayment
The amount of top-up loan that you stand to receive varies from one lender to the other. However, most of them just calculate your overall loan eligibility by taking into consideration your present income and the current value of your home.
Read Also: Want a Top-up Loan? Here's Everything You should Know
The repayment tenor of the home loan also varies from one lender to the other. Although, most lenders provide a tenure which is the same as the tenor of the home loan. This ensures that both the home loan and the top-up loan are paid on time.
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.