We dream, we plan, we set limits. This is also true when it comes to planning our financial dreams too. We have some limitation on how much to spend, save or earn. And like we say, life is not one straight road, and this is true for our financial life too.
Let’s say you already have taken a home loan. Home loans are loans with longer repayment terms which may be 15-20 years or more. While servicing your EMIs for that long duration there may be other priorities that may require your attention such as medical emergencies, education, home renovation or other necessary expenses.
Does this make you feel like you are walking a tight rope? Remember – hang on!
What do you do next? Apply for another loan? Personal loan? All over again!!!
You do have more choices than one in this case at least!
For instance, if you have already taken a home loan and need additional cash inflow you can opt for a top up loan rather than apply for a consumer loan or personal loan. A top up loan allows you to avail an additional loan over your current home loan.
Here are 5 factors on why top up loan is a winner when compared to personal loan or a consumer loan.
- Quicker processing: Loan facilitation process is quicker compared to applying for a fresh loan as it does not require a fresh loan application.
- Lower interest rates: The interest rates offered on top up loans are lower compared to personal loans.
- No mortgage requirement: A top up loan does not need an asset as security. This is an additional loan being given to the already existing home loan you are serving.
- Tax benefits: If a top up loan is being used for the purpose of renovation or buying a house only, then you will be eligible for tax benefit too.
- No restriction on usage: The money can be used for renovation work in the home, for personal needs, for medical expenses or any other expenses. But the final decision is always with the loan provider, regarding the purpose of taking the top up loan.
At times our lack of information comes at a higher price and some limitations come with opportunities. Hope the next time when you are cash stretched due to already existing liabilities, think of a top up loan! Only if you can service the loan!!