Top-up home loans: Tenure, interest rate, and other things to keep in mind when applying

“By topping up your existing location loan, you tin instrumentality vantage of the competitory rates offered by your existent lender, redeeming you wealth connected involvement payments successful the agelong run. With the imaginable to little your wide borrowing costs and simplify your fiscal obligations, a top-up location indebtedness is an affordable solution for managing your indebtedness portion keeping your fund successful check," said Rahul Mehrotra, MD & CEO, RHDFCL.

Tenure of top-up location loan

Top-up location loans are astir beneficial for customers erstwhile the applicant opts for the lowest tenure and prepays them. The tenure of the indebtedness varies with the bank. For example, the State Bank of India gives a top-up location indebtedness for up to 30 years.

Rahul Mehrotra, MD & CEO of RHDFCL, emphasizes the value of cautiously assessing the tenure and outgo erstwhile considering a top-up location loan. Choosing the shortest tenure that aligns with your fiscal goals and repayment capableness is crucial. 

Top-up location indebtedness involvement rates

The interest rates for top-up location loans are usually somewhat higher than regular location indebtedness rates. They besides alteration depending connected the borrower's profile. For example, SBI's top-up location indebtedness rates are betwixt 8.80% and 11.30%, according to SBI's website.

“The involvement outgo of a top-up location indebtedness is usually higher than a regular location indebtedness owed to the accrued hazard for the lender. The quality successful the involvement complaint charged by fiscal institutions usually ranges betwixt 1% - 2%," said Rahul Mehrotra.

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Top-up location loan: Eligibility

If borrowers person paid for 12 months without missing a azygous installment, they are eligible for a location indebtedness top-up. The magnitude of wealth a slope volition authorisation depends connected the equated monthly instalments (EMIs) paid.

Overall, top-up location loans are a convenient enactment for homeowners looking to entree further funds without having to spell done the hassle of applying for a abstracted oregon idiosyncratic loan.

Disclaimer: The views and recommendations made supra are those of idiosyncratic analysts, and not of Mint. We counsel investors to cheque with certified experts earlier taking immoderate concern decisions.

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Published: 08 May 2024, 10:56 AM IST