Top-Up Loans VS Fresh Loans

1
Top-up Loan Or Fresh Loan
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p-up-loan-or-a-fresh-loan/
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Top-Up Loan

• A top-up loan is a facility provided by the bank
  to its existing loan account holders. This
  facility helps borrowers to get additional
  funding over and above their existing loans.
  However, a top-up loan facility is available only
  for a home loan or Personal Loan. 

• The benefits include 
•  
• Immediate funding 
• No need to go through all the processes 
• Low- interest.
• Reliable backup as you already have an existing
  relation with the lender

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p-up-loan-or-a-fresh-loan/
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Lets understand this more clearly with the
calculation by comparing both the options.

• The interest rate for existing home loan 8.5
• The interest rate for a new personal loan will be
  10.35
• EMI for home loan 56,366 monthly
• EMI for the new personal loan 10,210
• If they take a top-up loan rather than a new
  personal loan he will get it approved at 7.5 as
  the home loan rates have reduced now. 
• So, its for sure that Suresh will be able to
  save more if he avails a top-up home loan. 
• The same is true with personal loan top-ups. If
  you are already servicing a personal loan and
  feel the need to borrow again. Then, in that
  case, you have two options
• getting a top-up personal loan or 
• availing a fresh personal loan.

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p-up-loan-or-a-fresh-loan/
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Features of a top-up loan

• Simplified documentation process
• Easy and faster approval
• low rate of interest
• Lower EMIs
• Hassle-free process. 
• Availability of longer tenures

Important Note  Same as any other loan, a top-up
loan also has processing fee charges,
cheque-bounce fee and other fees apply. So, its
very important to come to any conclusion once you
have done the proper calculation and research. A
Top-Up Loan also comes with tax benefits under
section 80C and Section 24 of the Income Tax Act,
but to avail this its important to utilize
borrowed money for home reconstruction/renovation
or for education purposes. You may need to
provide proof in order to avail of these tax
benefits.
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p-up-loan-or-a-fresh-loan/
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• Thank You