Many people dream of owning a home and often take out a home loan to achieve this goal. Home loans typically have a long duration, resulting in interest payments over an extended period.
Interest rates vary from bank to bank, so it’s crucial to compare rates before choosing a home loan. Opting for a bank with a lower interest rate can save you money in the long run.
Home loan customers may also require funds for additional expenses related to the home purchase or other purposes. In such cases, some individuals choose to take a personal loan despite the high interest rates.
However, a more cost-effective option is to consider a top-up home loan, especially if you already have an existing home loan.
Here are the key benefits of a top-up home loan:
- It can cover additional expenses beyond the initial home loan amount.
- It provides an affordable solution for managing debt.
- Customers can obtain an additional loan over and above their existing loan.
- It’s beneficial for customers opting for a shorter repayment period.
- Customers may receive a better deal from their current lender, reducing the overall borrowing costs.
- The tenure of a top-up home loan varies by bank, with some institutions offering loans for up to 30 years.
- Interest rates for top-up home loans are usually slightly higher than regular ones and depend on the customer’s profile.
- The difference between home loan and top-up home loan interest rates typically ranges from 1 to 2 percent.
- Customers who have made 12 consecutive EMI payments without defaults on their home loan may be eligible for a top-up home loan.
- The sanctioned amount for a top-up home loan also depends on the borrower’s regular repayment schedule.
Individuals can avoid applying for a separate personal loan by considering a top-up home loan and potentially benefit from lower interest rates.