Lifestyle

Housing loan top up vs personal loan-Which option should existing home loan borrowers take? 

Top-up house loans are made by home loan lenders to help people who already have a home loan meet their financial needs and make up for any shortfalls in funds. The money from these additional home loans can be used for anything. There are no restrictions.

Existing home loan borrowers who take out top-up loans can use the money for anything other than speculation. This includes, but is not limited to, making home improvements, paying for their children’s education or weddings, going on trips abroad, growing their businesses, buying cars, getting medical care, and meeting any other personal financial needs. Since there are no restrictions on how the money can be used with the top-up loan, existing homeowners can use them as an alternative to getting a personal loan from Best Banks for Personal Loan, and that too at Lowest personal loan interest rates.

So going ahead, in this section, we will compare personal loans and top-up house loans so you can make an informed choice for your finances.

How long does it take for disbursal

Personal loans usually have one of the shortest times to pay out compared to other types of credit. The money is usually sent within two to seven days after the loan application has been processed. Also, a lot of lenders say that the loan money could be given out on the same day that the loan application is sent in.

On the other hand, it usually takes a lot longer to get approved for a top-up loan.

Once the loan application has been processed, the borrower usually gets the money within one to two weeks. But some banks have started to offer pre-approved top-up loans for homes, and they say that they can give out the loan amount on the same day that the loan application is sent in. If you decide to get a personal loan from Best Banks for Personal Loan, use the personal loan EMI calculator to get a good idea of how much your EMI will be.

The rate of interest 

The lowest personal loan interest rates are available to borrowers with good credit profiles. It is based on the borrower’s credit score and other parts of their credit profile. If a person’s credit score is lower than 750 or if they don’t meet the eligibility requirements, they usually have a lower chance of getting a personal loan or can only get one with a much higher interest rate. Because a top-up home loan is backed by the borrower’s property, the interest rates are often lower than those on personal loans. Most of the time, the interest rates on top-up home loans are the same as or a little bit higher than the interest rates on the home loans that the top-up loan is based on. You can use an online personal loan EMI calculator to check the expected EMI and compare it to the expected EMI of a top-up loan.

Loan repayment tenure

The time left on the original home loan can’t be longer than the time it takes to pay back any additional home loans. Also, most lenders won’t let you keep a top-up home loan for more than 15 years. Best Banks for Personal Loans usually offer tenure of up to 5 years, but some lenders may offer terms that are even longer (up to 7 years). So, longer loan terms and lower interest rates for top-up home loans would make monthly instalment payments (EMIs) cheaper than for personal loans. This would make it easier for borrowers to pay their EMIs, which can be checked using the HDFC personal loan EMI calculator. Top-up home loans might be a better choice for borrowers who already have a home loan but want to borrow more money.

How much of a personal loan or top-up do you need?

A top-up house loan can be for as much as the difference between the total amount of the first home loan that was paid out and the total amount that is still owed on loan. Lending institutions may give top-up home loans for up to Rs. 50 lakh or even more. Home loan borrowers can now choose top-up loans with larger loan amounts because their EMIs are more affordable because they have longer loan terms.

On the other hand, the amount of a personal loan and the chance of getting the Lowest personal loan interest rates are mostly based on how much money the borrower makes each month, their credit score and how well he can pay back the loan. Most lenders will lend between 50,000 and 20,000 thousand rupees, but some are willing to go as high as 40,000 thousand rupees. Because of this, the chances of getting a bigger loan amount with a top-up house loan go up.

Also, keep in mind that your loan amount is a big part of the loan process when taking from Best Banks for Personal Loan. Also, the personal loan EMI calculator figures out how much your EMI will be as per that amount. The main things that affect how much your EMI is are the interest rate, the amount of the loan, and how long you have it. Even though you may not be able to change the interest rate, even if you are happy with the lowest personal loan interest rates, you can decide how long the loan will last and how much it will be.

Summing it up

Last but not least, let us sum this up for you. Top-up home loans offer a lower interest rate, a larger loan amount, and a longer time to pay back the loan, so people who already have a home loan should consider applying for a top-up home loan instead of a personal loan from Best Banks for Personal Loan if they want to borrow more money. But current homeowners who want a faster loan payout but whose lenders don’t offer pre-approved top-up home loans may find that personal loans are a better option. 

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