Everything about A Top-Up Home Loan:
Once you have taken a home loan and acquired your home, you would now need funds to make it livable. Not only that, if the home you have bought comes without certain basic amenities you would need hefty amounts to install those amenities. Now since you have already taken a loan and spent all of it on the house you’re desperately in need of some more money to cover additional costs.
Well there’s no need to worry. There could be a help around the corner, it would just take you some careful decisions are to be taken and you could be complete furnishing your home. A top up loan is the answer to your problems. A Loan taken as Top-up allows you to take on top of your existing Home Loan and the tenure of repayment is around 10 years which allows repayment to be easy on your pocket.
The loan could be made available to you a few years into the home loan disbursal and because of this you will have already gauged how your repayments are going. The whole idea of taking a Top Up Loan is that since you have already started paying back your home loan, the outstanding loan amount will be decreasing and you could use that margin to take another loan to fulfill some of your requirements.
A top up loan comes as a blessing for those who need to cover urgent expenses and is just like a Personal Loan, the only difference is that the interest rates are lower. These rates may not be as low as that of your home loan but not as high as that of personal loans. For any purpose the top up loan can be used and for paying as an ideal for that extra parking space or to cover expenses of your children’s higher studies.
You could be eligible to take a top up loan only when you have a home loan. The criteria for this loan are different in every bank. While some banks readily give you a top up over your home loan, some reserve the right to provide you with the Loan. In that case you could shift you loan to a bank where they will provide you with a top up. You need to have a completely good repayment track record to be granted a top up loan. The loan amount that is pending with the bank is outstanding, the property of the market value and to repay ability your top up are all considered by the bank when they evaluate whether you are eligible for a top up.
Tax rebate for this loan depends on what purpose you are using the loan. All loans liable for a rebate will be offered tax exemptions as this will be treated like any other loan. For example if the top up loan has been used to purchase some more property then the principle amount of the top up and the tax that was repaid will be liable for a rebate.
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