What Is The Maximum Tenure Of Top Up Loan In India?

Do you have an existing home loan amount but need extra? This extra help can come from a top-up loan. A top-up loan is a financial help from banks or housing finance companies over an existing loan. It is an extra amount that one can use to pay for household or any miscellaneous expenses.

Therefore, a top-up plan is the best alternative to buying an instant loan or liquidating assets like gold and property to get funds.

This article will teach us more about a top-up loan’s purpose, features, and benefits.

The Purpose Of A Top-Up Loan Over An Existing Home Loan

Just as a top-up on mobile charge is used when running low on balance. Similarly, a top-up loan is used when one has an existing home loan amount and requires extra. It comes over and above an existing home loan as an add-on facility.

One often needs urgent funds to deal with an emergency or other need. In that case, instead of a personal loan, loan against a mutual fund, fixed deposit, or maxing out the credit card, one should take a top up loan on an existing home loan. Top-up loans also come in handy when looking for a debt merger instead of managing multiple loans.

The Features Of A Top-Up Loan Over An Existing Home Loan

Let’s find out the features of a top-up loan to understand how it benefits when taking over an existing home loan .

  • Add-On – You can only get top-up loans on existing low interest  home loans.
  • Loan Tenure – There is no set tenure. It may have a longer tenure than the tenure remaining for an existing home loan. However, not longer than the outstanding tenure of an existing loan. Or for a tenure ranging from 12 to 60 months. It also varies with banks. You can also consult with about how to reduce loan tenure
  • Loan Amount – The maximum loan amount offered under top-up. However, after estimating the outstanding home loan amount, it does not exceed the overall loan amount.
  • Tax Benefits – tax benefits of part payment of home loan. However, only when the use is for household expenses.
  • Flexible End Usage – A top-up loan can be used for furnishing, modification, or construction of a house, personal expenses, emergency expenses, etc. However, one cannot use the amount for groundless purposes.
  • No Security/Collateral – Mostly, one is not required to provide any security, collateral, or guarantor for a top-up home loan.
  • Reasonable Interest Rates – Top-up loans are offered at the same interest rate as the existing home loan. However, it can vary depending on the credit profile.
  • Available On Balance Transfer – Some top-up home loans are given on balance transfer. Generally, those who cannot take a top-up from their existing lenders due to higher interest rates.
  • Fast Processing & Disbursal – A top-up loan is offered on an existing loan by a lender who has already checked the profile. Therefore, it is approved faster than a new loan.
  • Eligibility Criteria – The top-up loan is not for everyone with an existing home loan. There are a few factors reviewed before approval. The repayment ability, past track records, and if the credit report is good.

The Benefits Of a Top-Up Loan In Comparison To A New Loan

One can apply for new low-interest home loans or top-up loans with an existing home loan. Let’s weigh both based on the factors below.

  • Cost Effectivity – In the case of a new home loan, the interest rate is usually high. Whereas with top-up loans, it is lower than a new loan. Further, one often gets deals on the processing fees on top-up loans compared to a new loan.
  • Documentation & Waiting Period – With a new loan, one has to redo the documentation and significantly wait for disbursal. Whereas with a top-up loan with fewer documents and a waiting period, the amount gets disbursed.
  • Need Of A Collateral or Guarantor – Both are unsecured debts, whether a new loan or a top-up. Hence, no need for collateral or security. But with a new loan, one may have to provide if the lender is not convinced of the financial steadiness.


In the urgent need of money, one is prone to make impulsive financial decisions and repent later. Therefore, it is always better to prepare before any crisis occurs. Find different financial possibilities for different conditions, just as top-ups are meant for extra funds over the existing ones. 

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