When and why should you take a top up home loan? Know some of its special benefits

Top-up Home Loan: Everyone dreams of having their own house. Most people take home loans to buy a house. Home loans are the longest-term loans. In such a situation, you have to pay a lot of interest in the long term. Therefore, before taking a home loan, you should check the offers of various banks once and take a home loan from the one that seems most economical. Home loan customers often need money to buy or build a house or for other purposes. In such a situation, instead of taking an expensive personal loan, these customers can take a top-up home loan. Here you get the benefit of a low interest rate. This home loan is for those customers who already have a home loan. Let us know what are the benefits of a top-up home loan and when it should be taken.

These are the special benefits of top-up home loan

• Many times, there are some additional expenses apart from the home loan. Home loan top-up can cover these expenses.
• Top-up home loans are an affordable solution to manage your debt.
• Top-up home loans allow customers to avail of additional loans over and above their existing loan amount.
• Top-up home loans are quite beneficial for customers if you choose a shorter tenure for repayment.
• A top-up loan gives the customer a better deal than his existing lender. This reduces your overall cost of borrowing money.
• The tenure of top-up home loans varies from bank to bank. For example, the State Bank of India offers top-up home loans for a tenure of up to 30 years.
• The interest rate on top-up home loans is usually slightly higher than the rates of regular home loans. These rates also depend on the customer’s profile. 
• The difference between home loan and top-up home loan rates is usually between 1 to 2 percent.
• If the customer repays the home loan for 12 months without missing any EMI, he becomes eligible to avail home loan top-up.
• The amount sanctioned by the bank will also depend on the monthly installment repaid in the regular home loan. This will save you from having to apply separately for a personal loan.