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Home Loan Top-Up

Do you need extra help to finance your dream home? Is the home loan you took not enough to meet your needs. Opt for a home loan top-up to meet your needs. Read on to find out all about the top-up home loan interest rate and top-up loan eligibility to make informed choices.

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Home Loan top-up Details

Building your dream home can be intimidating for several reasons from time to time. Making a proper financial plan for the future before applying for a home loan is extremely important; however, due to several reasons, you may face financial issues during your repayment tenure. You may feel the need for extra monetary support to extend or renovate your house. This is when a home loan top-up comes into the picture to help you out financially.

If you face difficulty in repaying your home loan amount during your prescribed tenure, you can easily apply for a top-up loan to increase the loan amount. You can apply for a home loan top-up at banks or other financial institutes if you feel like your current loan amount will not be sufficient for your residential property’s construction or extension purposes. It will help you make the construction procedure faster and help you make informed financial decisions during your repayment tenure.

If you have taken a home loan and are wondering whether or not you should apply for a top-up loan, we have got you covered. This article closely discusses all the details regarding a top-up home loan that you need to know before applying for one.

What is a Top-Up Loan?

It can be quite difficult to plan your entire expenses and future investments before you apply for a home loan. However, the home loan that you think will be sufficient for your construction purposes may not be enough in the future. Apply for a home loan top-up to easily fulfil all your requirements without any hassle.

Banks offer a top-up loan to those who already have borrowed home loans and are finding it difficult to fulfil their construction requirements with your current home loan amount. A home loan top-up helps you to fulfil your construction, extension, renovation, and other needs that your residential property may have. You can select the added amount that you need in order to fulfil your construction requirements. In addition, several banks offer several top-up home loan schemes that you need to check out before you apply for a home loan top-up when you already have a home loan.

Different banks have different criteria for the applicants. The top-up home loan Interest rate will depend on your current income, the details of your current home loan, and your personal details. 

Benefits of top-up Loan on Home Loan

There are several benefits of getting a top-up loan when you already have a home loan for construction purposes. The major benefits that you can enjoy, include:

  • The home loan amount you select while applying for your home loan may not be sufficient for all your renovation, construction, and extension purposes of your property. A home loan top-up will help you fulfil all the requirements without any hassle.
  • These loans can be used for multiple purposes at your convenience. You can either use the money to build your house or extend certain portions of the house. You can also utilise the money for buying furniture and other renovation purposes.
  • Lower interest rates are offered to the applicants compared to the home loans that banks and financial institutes offer at the contemporary time.
  • You can easily use a top-up loan calculator to determine your interest rates before you apply for a top-up loan.
  • The procedure of these loans is way quicker when compared to the traditional home loans offered by the banks. Therefore, you do not have to wait for a long period to get the extra monetary support that you may need for construction purposes.
  • Different banks offer different schemes to the customers. You can also use this loan for personal or business purposes if your bank’s policies allow that.
  • A top-up loan on home loan can also bring tax benefits when used strictly for renovation and home construction purposes by the applicants.
  • A maximum tax deduction of around 30,000 is offered to the customers who use the top-up loan strictly for construction and renovation purposes under sections 80C and 24.
  • The 10 years offered by the banks for a home loan top-up remain on the higher side. However, you can repay the loan amount for around 10 to 20 years as per your affordability.

Top Banks That Provide Home Loan Top-up

It is extremely important to analyse and understand different rates offered by different banks at the contemporary time before you apply for a home loan top-up

Make sure you go for the best scheme that offers low-interest rates and high home loan tax benefits for a better experience.

Make sure you go through the chat to understand the differences between the interest rates offered by other leading banks in the country at the moment to determine which scheme will be the best one for you.

Bank NamesInterest Rates
ICICI Home Laon top-up7.60%- 8.45%
BoB Home Loan top-up7.45%- 8.80%
HDFC Bank Home Loan top-up7.55%- 8.05%
SBI Home Loan top-up7.55%- 8.25%
Citibank Home Loan top-up6.95%
Union Bank Home Loan top-up7.40%- 9.10%
Bank of Maharashtra Home loan top-up7.30%- 9.20%
Axis Bank Home Loan top-up7.60%- 8.05%

These are all the leading banks that offer top loans to customers who already have a home loan for construction or renovation purposes. The top-up home loan interest rate differs from one bank to the other based on different factors. For example, the interest rates applicable to the applicants get affected by their current loan amount and interest rates immensely. Make sure you go through all the different interest rates offered by the banks before you apply for a home loan top-up to make sure the scheme fits your demands properly.

Home Loan top-up Interest Rates

It is crucial to make sure you are financially comfortable with the offered interest rates when applying for a top-up home loan. 

Home loan interest rates depend on your entire loan amount and the tenure you select when you apply. Processing fees also play a big role in determining how much you will have to pay eventually.

Take a look at the chart to understand the starting interest rates offered by the leading banks in India along with the processing fees so that you can make infant financial decisions in the future.

Bank NamesProcessing FeesInterest Rates
Union Bank of India0.50%7.40%
Kotak Mahindra Bank0.50%7.50%
Central Bank of India20,000/-7.75%
UCO Bank0.50%7.40%
HDFC Bank3000/– 4,500/- excluding taxes7.55%
ICICI Bank4,500/-7.60%
Bank of Baroda8,000/- to 25,000/-7.45%
State Bank of India0.35%7.55%
LIC Housing Finance10,000/- to 15,000/-7.50%
Citibank10,000/-6.95%
Axis Bank10,000/-7.60%
Canara Bank1,500/- to 10,000/-7.05%
Bank of Maharashtra10,000/-7.30%
Punjab National Bank0.35%7.65%
Indian Overseas Bank0.50%7.95%

Eligibility Criteria for top-up Loan

It is imperative to go through the home loan eligibility criteria before you apply for a loan.

The major things that you need to keep in mind before applying for a top-up loan include:

  • You must be at least 21 years old to apply for a home loan top-up.
  • In addition, you must be a current borrower of a home loan to be eligible to apply for a top-up loan.
  • Both salaried and self-employed individuals are eligible to apply for top-up loans in India.
  • All Indian residents and non-Indian residents are eligible to apply for top-up loans as per their demands.
  • In order to be eligible for a housing loan top-up in India, you should not have more than one EMI bounce in the last year.
  • If you had one EMI bounce in the last year, it should be cleared before the next EMI.
  • A record of your recent home loan repayment for at least the last six months is required.
  • If you wish to combine a home loan top-up with balance transfer home loans, you should clear your repayment history for at least one year.

Home Loan top-up Calculator

You can use the home loan top-up calculator to determine your interest rates and monthly instalments before you apply for a top-up loan.

It will give you the exact amounts that you will have to repay and help you think of better alternatives with other tenures and interest rates before you make the final call.

Select your desired loan amount along with the current interest rate and tenure to see the results.

The top-up home loan interest rate varies from one bank to the other. Try different combinations with different tenures, interest rates and loan amounts to determine which scheme suits your demands the most.

How to Apply for top-up Home Loan

The application procedure of a home loan top-up depends on the bank and its policies. Different banks have different application procedures. Therefore, you will have to follow a specific process that your bank follows. However, there are a few common ways that almost all the banks follow in India.

  • If you wish to apply for a top-up loan offline, visit the nearest branch of your preferred bank and apply for the loan directly with the help of the bank officials.
  • You can also apply for these loans from the comfort of your home. Simply visit the official website of your preferred bank, submit your personal and financial details such as your address proof, income proof, current home loan details, and other details. After you apply successfully, your application will be reviewed by the bank. Wait for a few business days for the loan approval.

Also Check: HDFC Home Loan CIBIL Score

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Home Loan Top-Up FAQs

✅ What is the tenure of a top-up loan?

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The tenure of a top-up loan differs from one bank to the other in India. However, on average, a home loan top-up tenure remains around 10 years to 20 years, depending on your income details, current home loan details, and background.

✅ What is the maximum amount available under a top-up loan?

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The maximum amount that you can borrow depends on your income details, other loan obligations, current home loan details, and other factors. For example, the maximum amount of a top-up loan does not exceed 75% to 80% compared to the current market value of your property.

✅ Can I get a tax benefit on a top-up home loan?

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If you strictly use your top-up loan to construct or renovate your property, you can get home loan tax benefits. On average, a tax deduction of up to 30,000 is allowed by banks when it comes to top-up loans.

✅ What factors to consider when evaluating home loan top-up?

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Before you apply for a top-up loan, try to understand whether or not you absolutely need it. Do not apply for a top-up loan if you can manage with your existing loan amount. However, if the current loan amount does not fulfil your requirements, analyse and understand different interest rates offered by different banks at the contemporary time before you apply for a top-up loan.

✅ How does home loan top-up work?

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When you apply for a top-up loan, your application is reviewed by the bank officials. Several factors, including your current home loan details, interest rates, tenure, personal details, and income proof, are considered while reviewing your application. For example, if the bank finds you as an ideal borrower, your loan application gets approved, and you get additional monetary support for your property’s construction/ renovation/ extension purposes.

✅ What is the maximum loan amount under SBI top-up loan?

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As per the SBI top-up loan policies, the maximum amount that you can borrow as a top-up loan remains 5 lakh. The interest rate offered by the SBI starts from 6.75%. The interest rate differs from one borrower to the other depending on their income details, selected tenure,  and current home loan details.

Also Check: SBI Free CIBIL Score

✅ What is a top-up amount in loan?

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The top-up amount in the loan is the principal amount you borrow from the bank. It is additional financial support that you can get if you think your current home loan amount does not fulfil all your construction and renovation purposes of your property. Different banks offer different home loan top-up schemes and the loan amounts vary from time to time. Analyse and understand how much you need before you apply for a top-up loan.