Top Up Home Loans at low interest rates - Home Loan Blog - Tata Capital

Need Additional Funds at Low Rates? Top Up Your Home Loans with Tata Capital

Mar 09, 2017

Though home loans do help in building an asset, fact is that loan EMIs can be financially draining. It is indeed tough to manage your finances when you have to shell out a major chunk of your salary for servicing home loan EMIs.

This is the reason, that lenders allow borrowers (who have been regular with their EMI payments) to borrow additional amounts in times of need. And the best part is that the interest rates on additional borrowings are much lesser than those on person loans.

The additional amount is given by most large lenders like Tata Capital, in form of a top up loan above the existing housing loan

Why would lenders want to lend you more when you already have a home loan? The answer to this lies in maths. When you take a home loan, it is approved according to your home loan eligibility. After some period (say 2-3 years) of repayment, a part of the loan is paid back. The income of borrower would also have increased in the meantime - which means that borrower's loan eligibility would have gone up too. The person can then avail a fresh (top-up) loan of an amount equal to the difference of current loan eligibility and existing outstanding loans.

But lenders won't give fresh funds to those who have been irregular with their EMI payments. So if you envisage that you might need to borrow more in future, make sure that you are regular with your payments now itself.

Also, if you need additional finds for the purpose of house renovation, then you can even claim tax benefits. But for that, you will need to provide sufficient documentary proof at the time of tax fillings.

So if you already have a home loan and are looking to take a personal loan, then give top-up loans a thought. It makes much more sense than to take a high-interest person loans.