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.
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.
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.
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:
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 Names||Interest Rates|
|ICICI Home Laon top-up||7.60%- 8.45%|
|BoB Home Loan top-up||7.45%- 8.80%|
|HDFC Bank Home Loan top-up||7.55%- 8.05%|
|SBI Home Loan top-up||7.55%- 8.25%|
|Citibank Home Loan top-up||6.95%|
|Union Bank Home Loan top-up||7.40%- 9.10%|
|Bank of Maharashtra Home loan top-up||7.30%- 9.20%|
|Axis Bank Home Loan top-up||7.60%- 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.
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 Names||Processing Fees||Interest Rates|
|Union Bank of India||0.50%||7.40%|
|Kotak Mahindra Bank||0.50%||7.50%|
|Central Bank of India||20,000/-||7.75%|
|HDFC Bank||3000/– 4,500/- excluding taxes||7.55%|
|Bank of Baroda||8,000/- to 25,000/-||7.45%|
|State Bank of India||0.35%||7.55%|
|LIC Housing Finance||10,000/- to 15,000/-||7.50%|
|Canara Bank||1,500/- to 10,000/-||7.05%|
|Bank of Maharashtra||10,000/-||7.30%|
|Punjab National Bank||0.35%||7.65%|
|Indian Overseas Bank||0.50%||7.95%|
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 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.
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.
Also Check: HDFC Home Loan CIBIL Score
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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.
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.
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.
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.
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.
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
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.