Do you need some additional cash to furnish your new home? So, should you apply for a second loan? Not at all! Instead of a new loan, you can apply for a top-up on your existing housing loan and easily secure the required funds at affordable home loan rates.

Wondering how this facility works for housing loans? Let’s take a look.

How does a housing loan top-up work?

A loan top-up helps you secure funds over your housing loan (the top-up and the housing loan combined are about 70-80% of your property’s value). For example, if you have taken a loan of Rs. 75 lakhs from your lender for ten years, and you need another loan to refurbish your loan within five years, you can get a loan top-up over your current loan to fund the refurbishing expenses. In fact, you can secure a loan top-up even on a balance transfer housing loan. Here, all you need to do is fill out an application for a loan top-up with your balance transfer application.

The best part? A top-up on your housing loan works similarly to a personal loan. So, you can finance any expense with it.

Additional Read: Which One Should Be Taken – Home Loan Top Up or A Personal Loan?

Who can get it?

To qualify for a home loan top-up you must fulfil the eligibility criteria specified by your lender. Additionally, you must also have a history of regular loan repayments with your lender.

Documents required

Loan top-ups require your housing loan documentation along with proof of your loan repayment history. So, if you’re applying for a top-up loan with your current lender, they may already have your records. However, if you’re applying for a top-up on your balance transfer loan, here are some documents you will need.

  • KYC documents
  • Address proof
  • Property papers
  • Bank statements
  • Income proof, etc.

Factors to consider before applying

  • The loan tenure on top-up loans varies between lenders. So, before applying for one, ask your lender about the loan tenure.
  • The interest rate on your top-up loan could be greater than the home loan interest rate. Again, it is a good idea to confirm the rates on these loans with your lender before applying.
  • Lenders can limit the loan corpus they sanction on the top-up loan. Additionally, some lenders may only allocate loans for specific home-related financing. Hence, you must ensure that your lender offers loan top-ups as per your financial requirements. Else, you must seek a new lender.
  • Top-up loans with end-use like home refurbishing, construction, etc., may be eligible for tax benefits.
  • Top-up loan prepayments don’t attract penalties.

Additional Read: Difference Between Balance Transfer Home Loan and Top Up Loan


Now that you know how loan top-ups on housing loans work, it’s time to get a loan. Looking for a lender that fits the bill?Turn to Tata Capital. We offer loans at affordable rates and allow flexible repayments too. Use our home loan EMI calculator to understand your potential EMI liabilities today!

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