Loans help us in more ways than one. Whether it is for some medical expense or home repairs, loans provide the financial support at the right time. We also avail loan for education, travel, and other personal purposes. But sometimes, the money from one loan may not be enough.
Hence, you might need extra funds to cover your expenses. In such a case, instead of applying for a new loan, you can go for a top-up loan. It doesn’t usually require a lot of paperwork and is quite easy to avail.
In this blog, let’s understand what is a top-up loan, its benefits, eligibility, documents needed, etc.
What is a Top-Up Loan?
A top-up loan is an extra amount of loan you take on top of your existing personal loan or home loan. Here, instead of going through the entire process of applying for a new loan again, you just take extra money on your current loan account. During the process, you also get the chance to change your loan tenure and monthly EMIs. However, you pay interest on the outstanding balance plus the top-up loan amount.
Features And Benefits Of Top-Up Loan
Here are some simple top-up loan features and benefits you must be aware of:
- Quick process – Approval happens faster as the bank already knows you.
- Less paperwork – Most of your documents are already with the bank.
- Lower interest rate – Many banks offer top-up loans at better rates than a new personal loan.
- Easy EMI – As your EMI can be merged with your existing loan’s EMIs, you do not have to manage two different payments.
Eligibility Criteria For Personal Loan Top-Up
To get a top-up loan, there are some basic conditions you must fulfil. Here’s the simple top-up loan eligibility:
- You should already have a loan with the bank.
- You must have paid EMIs on time without defaults.
- A good credit score, usually above 700, should be maintained.
- Several banks ask you to complete the minimum tenure on your ongoing loan to avail a top-up. It could be 6 months or 12 months.
- You should have enough income to handle the EMI.
Personal Loan Top-Up – Documentation
The best part about top-up loans is that you do not really need too many documents. The banks usually ask for:
- Latest salary slips or income proof
- Updated ID/address proof, if needed
- Bank account statement
- Details of your current loan
How to Apply for a Top-Up Loan?
Here’s a quick step-by-step guide on how to get a top-up loan:
Step 1: Call or visit the bank where you already have a loan.
Step 2: Check your eligibility and ask if you qualify for a home or personal loan top-up.
Step 3: Submit the required documents, if needed.
Step 4: Wait for approval.
Step 5: Once approved, get the top-up loan amount directly into your bank account.
How to Calculate EMI for Your Top-Up Loan?
Before you take extra money, make sure you know how much EMI you would be paying. To calculate this, you can use a bank EMI calculator. All you need to do is enter the top-up loan amount, interest rate, and loan tenure, and it will show your monthly EMI.
Also Read : What is EMIConclusion
So, if you already have a loan and are looking for some extra funds, a top-up loan is one of the easiest ways to get them. However, if you want a new loan that gets approved in minutes, then you can avail an instant personal loan. CASHe offers quick loans of up to ₹3 lakh at a competitive interest rate. Just download the CASHe app, apply online, and get your loan approved within a few minutes.
