When Should You Apply For A Top – Up Personal Loan?
You know what is the worst part about needs? Well, they never really seem to end! Yes, just when you thought you have borrowed enough money for your needs and the boom! Comes another big expense in your face! Yes, that happens, happens to the best of us. Well, when such a situation does arrive, top up loan plans can help you through this situation. This type of loan is granted based on your existing personal loan plan . The best part about a top-up loan is the minimal documentation involved in it. The important thing is that you should know all that to make the right decision. Top-up loan is remarkably similar to a personal loan, it is flexible, and you may use for weddings, vacations, medical emergencies, home renovation and more. But do you know what you should look for in a Top-up Personal Loan before you go ahead and apply for it?
Also Read - Can You Use a Personal Loan for Home Renovations ?
Check For Charges/ Fees
Just like a personal loan, lenders will charge you a processing fee while you apply for a top-up personal loan as well. So, bigger the processing fee, smaller will be the amount of loan disbursed to you and vice versa. So, you know what the smart thing is to do here? The smart thing here is to choose a loan with a truly little processing fee. So, when you are looking to apply for a Top-up on your existing personal loan make sure you don’t forget to check the Top-up personal loan processing fee offered by the particular lender.
Choose and Compare among the best
You will know when you have found the right Top-up personal loan for yourself when the interest rate is lower than others. Do you know why it must be your sole motive? Because Lower interest helps in reducing your EMI and makes your loan payment seamless and pocket friendly. A lower interest rate basically results into a much lower expansion interest rate than what would be the case otherwise. So make it your topmost priority to check the personal loan interest rate for a top-up amount before applying for anything.
List of Banks Offering Top-up personal Loan in India 2021
1.50% of the loan amount + GST
Up to 2% of the loan amount + GST
10.75% - 21.30%
Upto 2.50% of the loan amount + GST
1.50% to 2% of the loan amount + GST
Up to 2.5% of the loan amount + GST
9,999 + GST
10.99% - 22.00%
Up to 3.5% of the loan amount + GST
Up to 2.50% of the loan amount + GST
Bank of Baroda
10.45% - 15.45%
1,000 to 10,000 or 2% of the loan amount + GST
How Will a Top-up Personal Loan Work Out?
There can only be two ways in which this loan can work out:
When Both loans are consolidated
In this case, the top-up loan you have taken is added to your existing personal loan plan’s outstanding balance and they are treated as one single loan. In this case. the interest rates of both are kept same, they get added. And you get a consolidated EMI to pay every month. In this case, the tenure remains the same as your personal loan.
When they are treated separately
In this case the interest rates on both loan amounts will differ and your lender will treat them separately. You will pay different interest rates although you top-up loan interest rate will be lower than your original personal loan. The Tenure in this case may also differ.
Benefits of Top-up Personal Loans
Minimal Documentation – The approval of a top-up loan is piece of cake as it takes minimal documentation. The identity and residence proofs are already present with your existing lender. The only thing your lender will keep an eye onisis your income. Remember, your EMI is going to get more complex which is why your lender will be cautious, asking you for your current income proofs. If you with your current earning, can pay the consolidated or separate EMI, with ease, the top-up loan will get approved without any problem.
Disbursal without any collateral – Top-up loans are usually disbursed free of collateral. There goes out the obligation to arrange one in order get the loan approved.
Rapid Loan Disbursal – This type of loan can be processed quickly, and the disbursal could be instant to a couple of days from applying.