A top-up loan means an additional loan offered above the already running loans, such as personal loan and home loan. The facility of top-up loans is generally offered to the customers who have an ongoing relationship with the lending institutions. A top-up loan is considered an extra financing option with a good credit score and repayment abilities. One of the Leading NBFCs Money View offers the best top-up loans at attractive rates and with minimum paperwork. This makes the procedure simple and quick.
Benefits of top-up loans
- Simple and timesaving: The top-up loans prove to be a good source for meeting urgent fund requirements. It is so because the borrower is already in relation with the lending institution and has proved his worth and his repayment ability. The process of disbursal is hence quicker and simple. Therefore, such loans are considered the best choice for meeting the urgent need for funds.
- Easy repayment: The term of payment of top-up loans is long, and thus the amount of repayment is convenient and relaxed. The tenure of payment depends on the existing loan amount and conditions.
- Proving eligibility is a simplified procedure: The borrower is already in relation with the lenders, so the need to prove the creditworthiness of the borrower again is not required. Thus, the sanction becomes easy and timesaving.
- Affordable: Though the interest rate of top-up loans is a bit higher than existing loan rates, it is also much lower than the other types of loans, such as personal loans or property loans. Thus, the interest compulsion while borrowing additional cash is saved.
- No usage restrictions: There is no restriction on the usage of the loan amount. This freedom ensures flexible usage of the loan amount according to one’s own needs, i.e., top-up loans can be used for any requirement.
- Flexible tenure: Mostly, the banks and financial institutions provide the tenure of the existing loan as the tenure of repayment of the top-up loan. This makes the top-up loan beneficial with longer repayment tenure.
- Lower rates of interest: A top-up loan proves a less expensive option than the other types of loans. The interest rates are lower than the rates of other modes of loans like credit cards, car loans, etc. One can even avail of tax benefits from the top-up loans if these are used for education, home repairs, or other such reasons.
The interest rate for such types of loans varies from lender to lender. The rates also vary according to the borrower’s profile.
- Balance loan transfer option: Various banks offer the transfer of balance loan amount with the top-up loan amount. With the payment of some charges, the transfer to another bank or account is done to safeguard and secure the security of the customer.
- No collateral required: For the approval of the top-up loans, no collateral or security is required because the top-up amount is linked with the existing loan account.
- Minimum documentation: No additional documents are required to apply for the same because the borrower and the lender are already in the relationship. The lender is well aware of the borrower’s details. Though the document requirements may vary as per the lender’s perspective, normally, the history of the borrower is considered as the basis of lending in the case of top-up loans.
- Combined EMIs: Many banks and other lending institutions allow their customers to make equated monthly payments called EMIs, and this saves the clients from making burdensome separate payments.
Eligibility to apply for a top-up loan
- Should have an existing loan relationship with the lender.
- To apply for a top-up loan, it is necessary that a certain period of time has elapsed after the repayment of a certain portion of the loan.
- One should have a good credit score.
- One should own a stable source of regular income.
- One must not be a defaulter.
- The existing loan should be secured.
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Documents required
- Identification proof
- Salary or income details for three recent three months.
- Address proof
- Photographs (passport size)
Concluding, it can be said due to lower interest rates, the flexibility of term, minimum documentation, etc. top-up loan is the best alternative to any other form of a loan. The top-up loans can be used to meet any type of fund requirements and that too within a very short time. Top-up loans are thought to bring financial stability and positivity to one’s life.