To own a house is a dream. It’s your place to call your own and you always want your abode to look beautiful and perfect. As we know, everything cannot be always perfect. There comes a time, as a homeowner you realise that your home also needs some amount of work done. Be it refurbishing of the exterior, adding an additional room or any sort of home repairs.

However, it is a not a simple task. Apart from your investment of time, it also needs an investment of funds.

In a less than ideal situation, you would forgo the repairs and maintenance and wait until you have saved up some money till you can start any work. However, this would mean that you would be dipping and depleting into your future savings. How do you go about this?

A quick and easy solution is to consider a Top-up Home loan.

What is a Top-up Home Loan?

To begin with, a top-up home loan is not a new loan but just an addition to your already existing home loans.

This loan can be taken even after your existing home loan has been disbursed and you have been successful repaying your EMIs. One of the best things about a top-up home loan is that you would not be required to be going through the loan formalities all over again. The previously done loan documentation and collaterals are sufficient for a top-up loan with just minimal documents to support the loan application.

This saves time, effort and cost of applying for a fresh loan.

Who can apply for a top-up home loan?

You can easily avail a top-up home loan facility from the existing lender, over the existing home loan, which you have availed from them. The procedural formalities are already fulfilled and make further funding quick and easy.

You can apply for a home top-up loan after a repayment track record of minimum six months on your existing home loan.

The major features of the home top-up loan are:

  • The home top-up loan can be repaid in regular EMIs over a maximum term of 15 years
  • The loan amount and term depends on the customer’s profile, age, income level and the repayment scheme chosen by the customer, among other factors
  • The top-up home loan amount is subject to the outstanding home loan and the top-up loan being offered, not exceeding the 75 to 80% of the market value of the property. However, the maximum amount of top-up loan on home loan possible is Rs. 50 lakh

Some years back, Raman Venugopal bought a beautiful house in a tranquil locality of Chennai. Since he did not have the initial funds, he had opted for a home loan. As the years passed, he realised it was time for his children to have their own rooms. However, he knew that his budget won’t cover the costs of refurbishing an extension of the house. His friends suggested him to apply for a top-up home loan on his existing Home loan.

Most of the new-age financial institutions such as Tata Capital apart from offering home loans, also offer top-up home loans for additional credit in times of need with minimum hassles for their customers. The top-up home loan can be availed for a variety of reasons, be it construction on new floor or rooms, renovation of the house, etc. An advantage of top-up home loans is the fact that the loan application requires minimal documentation and is processed quickly, as there is already an ongoing relationship and a repayment track record with the lender. They also have lower interest rates as compared to consumer/commercial loans.