A Top-up Loan means an additional loan which you can get on your existing Home Loan or Loan Against Property or Business Loans. This is given based on a of the existing EMIs being paid and also based on property market valuation. The rate of interest is slightly higher or the same as compared to the existing home loan or loan against property or business loan. The Top-up loan funds are paid in the account of the Loan borrower itself unlike a Home loan where the funds are paid in the account of the seller. These top-up funds can be utilized for any personal or business purposes.
A Top-up loan can be availed on your existing loan to meet any of these purposes:
♦ To meet any personal requirement say marriage in family, vacation etc.
♦ To acquire any personal asset like white goods, car etc.
♦ To meet any business expansion for working capital
♦ To meet any business requirement for machinery loan or equipments
♦ Upto 10% to 100% of the Home Loan Amount is treated as Top-Up
♦ Above is subject to Income criteria, Property Market Value and Existing loan tracd record
♦ Upto 30 years depending upon the remaining period of your existing home loan or loan against property
♦ Same set of applicants and co-applicants as in the main Home Loan or Loan Against property need to apply for a Top-up loan
♦ Tax benefit is available u/s 24 only if the Top-up is utilised for the purpose of Home Improvement or renovation or extension.
♦ A Businessman profile can avail deduction of interest paid on Top-up loan u/s 37 if the funds are utilised for Business purposes.