Everything You Need to Know About Home Loan Top-Up Eligibility
Aug 06, 2019 Home Loan
Being an existing loan borrower, one always worries about taking another loan. In all fairness, the banks do not care if you want a new loan for education, buying a house, renovating a house or any other purchase. What they look for before granting a home loan is the repayment capability.
If you have run out of money and need some extra loan, one can apply for a home loan top-up. Before we proceed, let us discuss what a home loan top-up is.
If you are an existing debtor and need additional funds, then you can apply for it in your existing home loan. It is generally an easier way to get more funds as the borrower will not have to go through the entire process of applying for the loan and can have access to more funds quickly.
If you have run out of money and need some extra loan, one can apply for a home loan top-up. Before we proceed, let us discuss what a home loan top-up is.
If you are an existing debtor and need additional funds, then you can apply for it in your existing home loan. It is generally an easier way to get more funds as the borrower will not have to go through the entire process of applying for the loan and can have access to more funds quickly.
Reasons to apply for home loan top-ups:
Top- up loans is the best way to achieve your personal and professional milestone. You can apply for a top-up loan to help furnish funds for your higher education or any expensive purchase. However, you must always disclose the real reason to the lender before applying for the top-up loan. The lenders cannot grant the top-up loan for a speculative or arbitrary reason.
One thing to remember before applying for the top-up loan is the upper and the lower limit of the loan. They both vary from bank to bank but generally range between Rs 1 lacs to Rs 5 crore.
One thing to remember before applying for the top-up loan is the upper and the lower limit of the loan. They both vary from bank to bank but generally range between Rs 1 lacs to Rs 5 crore.
Interest rates on top-up loans:
As compared to home loans, top-up loans have a higher percentage. They are often regarded as the best replacement for the personal loans which have the interest rate of 13.5 to 16 percent. The top-up loans have interest rates of 9.5 percent to 10 percent. However, the interest rates of the top-up loans can depend on the amount of loan you are seeking form the bank.
Top up loan eligibility:
Banks calculate the home loan based on the market value of the property. They can lend up to 80 percent of the home loan amount if the amount is greater than 30 lacs. The banks will approve your home loan top up only if there is a possibility to extend more credit with Loan to Value framework i.e. if it is up to 80 percent the market value of the property.
They will also take into account your monthly EMI after taking the home loan and will also calculate the fixed obligation to income ratio for your top-up loan after deducting the instalments of your current running loan.
They will also take into account your monthly EMI after taking the home loan and will also calculate the fixed obligation to income ratio for your top-up loan after deducting the instalments of your current running loan.
Top up loan tenure:
The tenure of the top-up home loan is always the residual of the primary home loan amount. For example, the total tenure of your primary loan was 20 years and you have serviced it for 2 years. The outstanding tenure of your primary loan is now 18 years which will be the tenure of your top loan as well.
Tax benefits:
The tax benefits are only eligible if the money was used in the construction, renovation or purchasing a property. the tax benefits will not be available if it was used for some other purpose.
Looking for property portal?
Related Articles
-
Facts Related to Home Loans in India
Nov 29, 2016 -
Pre-Approved Loans Myth Busted
May 16, 2019 -
-
Know How EMI is Calculated
Dec 26, 2018
See comments (0)
Write a comment
