Indepth Guide on Top up on a Home Loan

A home loan top up is made available by lenders to transfer your existing housing loan account. 

It is done to enjoy lower home loan interest rates. It is called a home loan balance transfer. 

If you wish to know about top up loan home loan, here is a quick post to go through!

What is a top up loan home loan?

A home top up loan is available to you when you transfer your loan to a new lender with an affordable rate of interest. It is a facility that lets you borrow funds over and above your existing home loan. If you need additional funds while buying or building your home, a top up loan home loan can speed it up.

What are the benefits of applying for a home loan top up facility?

i) A lower rate of interest 

The top up loan comes with an affordable rate – almost all of your ongoing home loan interest rates. It means you can avail of extra funds without paying additional interest charges comparable to applying for a fresh loan. 

ii) A higher loan amount 

Depending on the lender’s policies and your eligibility, you may be approved for an amount as high as up to Rs.50 lakh. 

iii) No usage restrictions 

No matter your needs, you can use the money out of the top up loan home loan for all. The only condition is that your purpose of using money should be legal. 

iv) Quick and hassle-free processing 

If you have paid your existing home loan EMIs on time, lenders may have no issues in approving your application at a swift rate. Once approved, you can also get a fast loan disbursal. 

v) Income tax benefits 

You are eligible to claim up to Rs.2 lakh on the payable top up loan interest part under section 24 of the Income Tax Act. It is also possible to get up to Rs.50,000 deduction as per section 8OEE of the IT Act.  

With so much going for a top up loan home loan, it is wise to go for it when you do a home loan balance transfer.