Benefits of a Top up Loan
Some of us purchase and own a number of properties in India. This is the situation when our business is booming and we’re having a great profit. But what happens when our business declines and we are in a grave state to make ends meet? There are various examples wherein people have purchased posh properties years ago and are now in a weak financial position because of their stooping business.Certainly, here comes the role of a top up loan. Top up loans are a boon to people who are in urgent need of funds and it is an additional loan given by the lender based on the borrowers existing loan. The top-up amount is decided based on current loan, the performance and repayment track.
- There are innumerable causes for a stooping business such as crashing global markets, inflation and others. In such situations, one needs to be smart enough to overcome the problem. You can think of various ways of making big money from starting your own business to investing in something new. If you have to restart something of your own you definitely need funding which you cannot achieve on your own. Having a property with a higher market value can result in a great advantage.
- A top up loan is a great way to achieve success during financial crisis and get out of the lurch. They cater to the urgent financial needs of people who are in need of money. Top up loans are available with various banks and financial institutions.
- Opting for a top up loan allows you to avail a loan amount on the value of the property for which you will be paying the loan for. There are certain guidelines which make a person eligible to acquire a top up loan. You can avail of up to 70% of a top up loan based on the value of the property with tenure of 10 years. Doing this will also increase your loan eligibility and a clear idea of the repayment record.
- A top up loan can benefit you in various ways like buying consumer durables, holiday sponsors, remodelling the home, educational expenses, marriage expenses, purchasing a new vehicle and more. The basic criteria’s for a person to be eligible to have a top up loan are; he/she should be an Indian resident, should have a good repayment track record, should have a home loan and vintage of six months.
- Every bank which lends a top up loan considers few factors like the market value of the property. The loan which you pay for the property can be transferred as a top up loan and the bank will consider the value of the property. As mentioned earlier, the bank also sees the history of the loan repayment by the individual.
- The tenure of the top up loan is the extent of the outstanding loan tenure. There are no additional interest charges; the interest charges are similar to that of the existing loan tenure. You can claim a tax benefit on the top up loan by putting forth the use of the top up loan; likewise, if you have taken a top up loan for a home repair, renovation or any other home related aspect and if you have the relevant documents for it, you can avail the tax benefit.
- The other uses of a top up loan are that there are no restrictions on fund utilisation. You can make use of the top up loan for personal purposes. Top up loans also with lower interest rates which are to be sued for personal purposes. Top up loans also do not monitor the end usage of the funds. The top up loan is secured by the current loan which is paid for the property.
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