Over the past few years, the popularity of top-up loans has increased significantly within the financial industry. Top-up loans allow home loan borrowers to add a specified amount to their existing home loan. Financial institutions extend these loans only to existing customers whose repayment capacity is ideal and who have maintained a clean repayment history along with an exemplary credit score. 

The biggest benefit of a home loan top up is that it comes with end-use flexibility, providing borrowers the ability to use the funds for housing purposes. Yet another important factor that contributes to the popularity of top-up home loans is that the disbursement process is swift. Lenders already have all the documents and information they need to process the loan. Consequently, approval and disbursal hardly take a few days. Further, low top-up loan interest rates make loan repayment easy. 

Now that we have established the basics of a home loan top-up, let us look at the home loan eligibility criteria or the conditions that one must meet to be able to avail of a home loan top-up. 

Home Loan Top Up: Eligibility Criteria

Top-up loan eligibility criteria vary from lender to lender. However, most financial institutions require loan borrowers to meet at least the following eligibility criteria:

1. No more than one EMI of yours must have bounced over the last one year.
2. If you missed paying a loan EMI during a particular month, you must have cleared the loan payment before the next EMI due date. 
3. You must be a residing citizen of India. Some financial institutions also offer home loan top-ups to NRIs these days. 
4. These loans are extended only to existing home loan borrowers. Depending on the financial institution you have approached, you must have cleared at least six months to one year’s EMIs with the lender to be considered eligible for a home loan top-up. 
5. All financial institutions also have strict age requirements that one must meet to be considered qualified for a home loan top-up. The majority of lenders require loan borrowers to be between 18 and 65 years of age. The maximum age is always the age at the time of loan maturity and not at the time the loan applicant is making an application. Age requirements also vary from financial lender to lender. 

Home Loan Top-Up: Application Process 

The home loan top-up application process is fairly easy. If you need additional funds over and above your home loan and you meet the home loan eligibility criteria, you can apply for a top-up home loan online by going to your lender’s website. The process will start with you filling out the home loan top-up form. Lenders generally do not ask for any documents other than identity and income documents from top-up loan applicants. 

The financial institution you have applied to will take a few days to verify your income and identity and essentially ensure that you can comfortably afford the loan EMIs. They will also utilize this time to decide the loan amount to be disbursed based on your repayment capacity, debt-to-income ratio, and other relevant things. Within a few days, the top-up loan money will be disbursed into your loan account.  

Buying a home is a massive financial responsibility. Homeownership also comes with additional unplanned expenses. A top-up loan can help individuals navigate a financially difficult period comfortably and without feeling hassled or stressed. Top-up loans also offer other benefits. In the next part of this article, we look at the benefits of a home loan top-up and why loan borrowers should consider availing themselves of these loans.  

Home Loan Top-Up: Benefits

Here are some of the benefits associated with home loan top-ups. 

1. Low Interest Rates: The best thing about home loan top-ups is that these loans attract a low rate of interest, which helps keep home loan EMI affordable and the process of loan repayment easy. Top-up loan interest rates tend to be only slightly higher than home loan interest rates. 
2. Flexible End-Use: Funds availed of through a top-up loan can be used to fund housing-related requirements, such as home renovation or remodelling. 
3. Quick Loan Processing and Disbursal: Home loan top-ups are extended to existing customers. Thus, loan processing and disbursal do not take much time. 
4. Tax Benefits: Lastly, in some specific cases, depending on how a loan borrower uses the loan amount, individuals can also claim tax benefits and maximize savings. 

In conclusion, if you need funds urgently to navigate through a personal or financial crisis and you are an existing home loan borrower, you should most certainly consider applying for a home loan top-up.