How A Top Up Home Loan Could Be Better Than Business, Personal Or Gold Loan?

The need for funds can “gatecrash” at any odd time in your life, like an unwelcomed guest. The first thing that will make its way in your thoughts is perhaps a personal loan. Should you rush to the bank for a personal loan as yet? Is it the only available option? It may be the most exploited option but it is certainly not the most viable. Find out more below.


You may be looking for finance to fund a business proposal, planning a wedding, pay for education or simply go on a vacation. Whatever be your need, the underlying question remains the same, “how to pay for it?” While, commonly, taking a loan comes to mind but which loan should it be? Should it be a personal loan, gold loan or a business loan? How about a top-up loan? Easy, quick and cheap.

In simple words, a top-up loan is that additional loan that you can take on an existing loan after you have paid it down for at least a year. Basically, after paying back a loan, if you need more funds then instead of applying for a new loan altogether, you just restore back to your original loan limit and get immediate access to funds. The turnaround time between applying and approval is rather quick and easy because you are an existing customer and the lender has all your KYCs already.


But yes, your eligibility depends upon your capacity to repay and your CIBIL score, which the lender will surely examine. Once that’s done, your accounts are credited with the required funds.


Comparing Top-Up Loans to other Debt Options (or getting Loan against property)


Personal loans, though common but are one of the priciest loans in the market. Your credit score may not be reviewed for gold loans but you must part with your precious gold assets for it. Whereas, you must have a specific amount of turnover to be eligible for a business loan and depending upon your requirement, you may have to furnish additional securities.

The Flip Side

What if you do not have a home loan? You certainly won’t be able to take advantage of a top-up loan. All prepayments are adjusted towards the top-up portion first and then the balance goes towards your outstanding home loan.


Looking for a big ticket loan? You might need a large amount to raise capital for your business and the top-up loan amount might fall short on your requirement.


In case of an emergency, such as a medical emergency, it may not be as easy as to take a top-up loan as an OTC gold loan would be.



You knew about “how to top-up your prepaid connection”. Now you know about “top-up loans”. Either ways, it means “to add more balance to existing outstanding amount”. Top-up loans can be quite handy as they don’t ask for additional mortgage, are cheap, impose no precondition on how the funds should be used and of course, require less documentation formalities too.


Mainstream banks that deal in home loans also provide the facility of top-up loans. If you are looking to transfer your home loan to another bank, you can apply for a top-up loan with the new lender too. In other words, it is a personal loan at a lower rate. Just the icing on cake you want.



Author: homeloan

Use the interactive Home Loan EMI calculator to calculate your home loan EMI. Get all details on interest payable and tenure using the home loan calculator.

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