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Many people in India are still unaware of what a top-up home loan is – it is a loan that a borrower can take in addition to the home loan. It is an ideal way to get extra funds to meet your construction or renovation needs. Please note it is available only to borrowers who have a housing loan with a bank or NBFC. Instead of going through the whole process of getting a loan application approved and the loan sanctioned, going in for a top up home loan has several benefits. (more…)
Many a time, customers cannot handle the high interest rates while they are repaying the loan. They cannot manage the monthly expense with the high EMI. In such situations, they can opt for a Home Loan Balance Transfer. This allows the customer to transfer the balance to another lender offering lower interest rates. This is also ideal in cases where the current financial institution decides to shift from fixed loan interest to a variable one. Here are some advantages of a home loan balance transfer. (more…)
Home Loan balance transfer concept have come into picture because many loan borrowers are not happy with their present lenders. The procedure of transferring your existing Home Loan from one bank or NBFC to another lender for availing a lower rate of interest and saving money on your interest payments, is known as Home Loan balance transfer facility.
For example, if you have taken a Home Loan of Rs.50 lakhs for a tenor of 20 years at a fixed rate of interest of 10%, then you may be paying more interest. It will be better when the market interest rates fall, you request your existing bank to switch your loan to a floating interest rate. But in case your bank declines your request, you can opt for Home Loan balance transfer.
Facilities you can avail after opting Home Loan balance transfer:
Lower Interest Rate – If your existing lender is offering you higher rate of interest and you find some lender that has a lower rate, you can easily transfer your existing loan to another bank or NBFC or loan provider to enjoy a lower rate of interest.
Lower EMI – It will help to lower down the monthly EMI and you will be able to save money.
Top-up Loan – May be the lender you are choosing also offers a facility of Top Up Loan. You may want to renovate your home, but already have a Home Loan running, so to apply for a new loan will be a problem. You can apply for a Top Up Loan above your Home Loan and fulfill all your requirements.
To know more benefits, read: Revise your Home Loan with Balance Transfer
Home Loan top up is a wise decision. This is because it lets you additional funds with lower rate of interest. Not many borrowers are aware of the benefits of availing a Top Up Loan and thus I summarize them below for your quick reference.
Benefits of getting a Top Up on Home Loan.
- As the lender will not go through the loan process you may avail instant approval and quick loan disbursement.
- The loan can be taken at more or less similar rate of interest on the existing loan. Therefore, you do not have to worry about any major changes in your EMIs.
- For the Top Up Loan process the lender does not require additional paperwork. Only the bank statements of existing loan are enough to initiate and finalize the loan process.
- Top up is available for a longer duration which is either 20-30 years or until your retirement. This period is irrespective on the tenure of your existing loan.
- The top up amount can be used for home renovation, home extension, interior decoration or for any reason as this is an all-purpose loan.
- This is a collateral free loan as it does not require you to pledge any security/ guarantee to obtain it.
To be sure of the top up on the Home Loan use the Top Up Loan calculator available at the lender’s website. It will ask values for –
- Total loan amount sanctioned
- Existing tenure of your Home Loan
- Existing rate of interest on your Home Loan
- Rate of interest of the lender
- To provide the Top Up Loan amount you stand eligible for