Should existing home loan borrowers take a personal loan or top-up for extra funds?

Should existing home loan borrowers take a personal loan or top-up for extra funds?

The purpose of home loan lenders’ top-up house loans is to help existing home loan customers meet their financial needs and make up for any shortfalls in available funds. These supplemental home loans do not have any stipulations or limitations on how the loan proceeds can be used. 

Existing home loan borrowers who take out top-up home loans are permitted to use the proceeds of the loan for any purpose other than speculation, including but not limited to financing home improvements, the education or wedding costs of their children, trips abroad, the expansion of their businesses, the purchase of automobiles, medical treatments, and any other personal finance requirements. Because top-up mortgages don’t impose any restrictions on how the money may be used, existing homeowners who take out these types of loans can use them as an alternative to taking out HDFC Personal Loan online.

In this section, I will provide a concise comparison between personal loans and top-up house loans in the hopes of assisting you in making an educated decision.


The time needed for processing

When compared to other types of credit, the disbursement time for personal loans is typically one of the shortest. After the application for the loan has been processed, the money is typically sent out within two to seven days. Additionally, many lenders state that the loan money might be dispersed on the same day that the application for the loan is submitted.

On the other hand, the approval process for top-up mortgage loans typically takes far longer than that of HDFC Personal Loan online

After the application for the loan has been processed, the funds are typically transferred to the borrower within one to two weeks. However, some financial institutions have begun providing pre-approved top-up house loans, and they say that they can distribute the loan amount on the same day that the application for the loan is submitted. If you go for a personal loan, ensure to check the HDFC personal loan EMI calculator to get a fair estimate of expected EMI.

The applicable rate of interest

The annual rate of interest charged on HDFC Personal Loan online is based on the borrower’s credit score as well as other aspects of their credit profile. Applicants who have a credit score that is lower than 750 or who have inadequate eligibility conditions typically have a lower likelihood of being approved for a personal loan or are only approved for loans at interest rates that are much higher. The fact that a top up house loan is secured by the borrower’s property means that the interest rates on top up home loans are often lower than those on personal loans. The interest rates on top-up home loans are typically the same as or somewhat higher than the interest rates that are prevalent with the home loans that serve as the top-up loan’s underlying basis. You can check the expected EMI through the online HDFC personal loan EMI calculator and compare it with the expected EMI of a top up loan.

Loan repayment tenure

The remaining term of the underlying housing loan cannot be longer than the repayment loan tenures of any top-up home loans that are taken out. In addition, the majority of lenders have set a limit of 15 years for the length of time that a top-up home loan can be held. The term of HDFC Personal Loan online can often be as long as 5 years, while certain lenders may provide terms that are even longer (up to 7 years). Therefore, longer loan tenures of top-up home loans coupled with lower interest rates would allow for cheaper monthly instalment payments (EMIs) than personal loans, which would boost the borrowers’ ability to afford their EMIs, which can be checked by utilizing HDFC personal loan EMI calculator. Borrowers who already have a home loan and are searching for larger loan amounts might find top-up home loans to be a more appropriate option.

Amount of top up or personal loan required.

The loan amount for a top-up house loan can be as much as the difference between the whole amount of the initial home loan that was disbursed and the total amount of the loan that is still owing. Top-up home loans might be approved for up to Rs. 50 lakh or even more by the lending institution. Home loan borrowers now have the flexibility to choose top-up home loans with larger loan amounts as a result of the greater affordability of their EMIs as a result of longer tenures. 

On the other hand, the amount of the loan that may be obtained through a personal loan is mostly determined by the borrower’s monthly income as well as his capacity to pay back the loan. The majority of lenders will often lend anywhere from 50,000 to 20,000 thousand rupees; however, some of them are ready to give up to 40,000 thousand rupees. As a result, the likelihood of obtaining larger loan amounts is increased in the case of top-up house loans.

Also, remember that your loan amount is a key factor when determining the expected EMI on HDFC personal loan EMI calculator. The interest rate, loan amount and tenure are the key factors that affect your EMI amount. While the interest rate may not be in your hands, tenure and loan amount can be handled by you before finalizing.

Summing it up

Because of the lower interest rate, larger loan amount, and longer loan repayment duration that are accessible through top-up house loans, existing home loan borrowers should consider applying for a top-up home loan rather than HDFC Personal Loan online if they want to increase their borrowing capacity. However, existing homeowners who want a speedier loan disbursement but whose lenders do not offer pre-approved top-up home loans may find that personal loans are a better option. This is because personal loans do not require a credit check and nowadays offer the facility of HDFC personal loan EMI calculator too.


I am an author at FullFormX for the past 1 years. I like to share information and knowledge. I love expressing my thoughts through my articles. Writing is my passion. I love to write about travel, tech, health, fashion, food, education, etc. In my free time, I like to read and research. My readings and research help me to share the information through my thoughts.

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