A Home Loan top up can help you to incur additional expenditure like buying a car or going for a vacation. This can be very helpful since you need not go for Personal Loans or Car Loans, that come at high interest rates. The benefits of top-up loan are many; transfer your Home Loan Balance now.
When you are already beset with a huge Housing Loan, you may need to make sacrifices on several fronts. It becomes difficult to procure a car or even going for a expensive vacation. You may even need to meet sudden expenditures, like medical emergencies.
In such circumstances people usually opt for Personal Loans. But Personal Loans come with high interest rates. If you are already repaying a Housing Loan, you may be eligible for a Top Up Loan on the Home Loan amount, if you do a Home Loan Balance Transfer. Not only your Housing Loan interest rate reduces, you get the benefits of a Top Up Loan as well.
How to get Additional Top-up Loan on Balance Transfer
Banks and financial institutions usually reward their new Home Loan Balance Transfer customers with Top Up Loans.
So, if you find a lender who is offering a lower interest rate compared to your new lender, opt for a Home Loan Balance Transfer, however, only if the new lender is giving you a Top Up Loan.
This is a process that most of the lending institutions follow, to attract House Loan customers from other banks or financial institutions.
Benefits Of Top Up On Home Loan.
There are many benefits of a Top Up Loan which you can avail:
Low Interest Rate
Home loan top up is an amount that is offered over the Home Loan Balance Transfer amount. It is a kind of concomitant amount to the Home Loan amount. Therefore, the interest rate treatment for such loans is equivalent to Home Loan interest rates.
You opt for a balance transfer only if you get a lower interest rate. Even if the new interest rate is 0.5% lower, it’ll make a lot of difference in the long run. However, a balance transfer is only recommended during the initial tenor of your House Loan.
Use a top up calculator to find out the new EMI amount that you’ll need to pay with your new lender. There will be change in the tenor as well. Make sure to do all the relevant calculations like saving in interest and new EMI amount, before taking the final call.
Long Repayment Tenor
It is not like a Car Loan or similar loans, that involve short repayment periods like 5 or 7 years. You can pay the interest along with the regular Housing Loan interest, for the duration of the Home Loan tenor. Since the Top Up Loan is concomitant to the Home Loan, you can repay the amount throughout the balance repayment period of your House Loan.
If you have 10 years of repayment period left during your Home Loan transfer from your previous bank, you get 10 years to repay the House loan top up as well. Some lending institutions also offer customised repayment options for top up on Home Loan.
At some point of time in the middle of your tenor, you might want to repay your Home loan top up entirely. Choose a lender who lets you do this without a penalty. Most banks and NBFCs let you make part-prepayments up to a limit without any penalty.
Documents Required For a Home Loan Top Up
The lender will ask for some documents to provide you with the Home loan top up. You need to submit proofs of identity, residence, and income. Along with these you also need to submit documents related to the Home Loan Balance Transfer.
These are the basic requirements. Some lenders may ask for some additional documents like bank account statements of the previous 6 months, signature identification from present banker, statement of personal assets, and liabilities.
Balance Transfer Documents
●A letter from the present lending institution, detailing the list of property documents that are with them.
●A letter from the present lending institution denoting the latest outstanding balance on the Home Loan.
●Copies of property documents.
●Copy of IT returns of the last two years.
If you are self employed, you need to submit IT returns for the past 3 years along with copies of challans, as payment evidence for advance income tax.
Overall, a Home loan top up is a great facility to avail, if you transfer your Home Loan balance to a new lending institution. You can meet additional expenditures easily without opting for expensive loans like Personal Loans, Car Loans, etc.