The costs of owning a home, especially if you are constructing it, can often go beyond your budget. If the funds from the home loan you have taken run out, then you need to get additional funds so that you are still on course to occupy your home. This is where a home loan top-up is extremely useful.

Advantages of a home loan top up

A home loan top-up can be taken by anyone who has taken a housing loan and made their payments regularly when they are due. The interest rates on home loan top ups are much lower than personal loan interest rates, making them the better option.

Since you have already submitted all necessary documents to the bank, the processing for the home loan top up is much easier. Depending on the bank/finance company you are borrowing from, you can apply for a home loan top up after a year of receiving your original loan amount.

If you are opting for a home loan balance transfer, then you can also get a home loan top up from your new loan provider for additional funds and interest savings.

Repaying the home loan top up

A new EMI amount will calculated after taking into account your current loan balance and the top up at their respective interest rates.

If you are taking the home loan top up along with a home loan balance transfer, your new EMI amount will depend on whether you are extending the duration of your loan. Once you have finished transferring the loan, you can continue making your regular payments every month on the new EMI amount.

What is the maximum top up allowed?

This depends on the policy of the bank or finance company you are borrowing from. In most cases, it is common that the total amount of the home loan top up cannot be more than the amount of the initial home loan. If you have taken a home loan of Rs. 50 lakh, then your home loan top up cannot exceed Rs. 50 lakhs.

The top up amount is also affected by your credit score and the loan amounts due from you and any co-applicants for other purposes. You are required to provide information on all borrowings so that the banks can calculate the level to which you can top up your home loan.

Learn more about your Home Loan Eligibility here


The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.

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