What is a Top-Up Loan on Home Loan? Explain the Benefits of Instant Home Loan Top-Up.

Many people in this modern world dream of buying their own homes and living a comfortable life. However, few are wealthy enough to finance the property and home construction. In contrast, others look for different home loan options available. Sometimes, even after you Apply for a home loan, you might find yourself in a situation where you require more funds. In such a situation, your best bet is to get a top-up loan on the home loan. This is because your immediate money requirement will be reduced immediately with a top-up home loan. If you want to know more about home loan top-ups, consider going through this article. 


What do you mean by Top-Up on Home Loan?


A top-up loan on the instant home loan is an extra sum of money that a borrower avails of in addition to their existing home loan. You can use this borrowed amount not only for home construction or improvements but also for expanding your business, medical costs, education, travel, and more. A top-up loan can be repaid by slightly increasing EMIs. 


For instance, you get a home loan for the total sum of Rs 90 lakhs from the lender for 15 years. Suppose you are left with Rs 55 lakhs after five years. If you require more money at that time, then you can get a top-up home loan.


Eligibility Criteria for Top-Up Home Loan:


The eligibility criteria for a top-up home loan are similar to the home loan offered by the same lending institution from which the home loan was taken by you previously. However, there are a few additional things that a borrower needs to bear in mind:


  • You must’ve successfully repaid EMI for the previous year.
  • If you haven’t paid EMI, then it should be paid before the next EMI is due
  • The LTV should not be more than 70-80% of your property’s value
  • It would help if you had a minimum CIBIL score of 750
  • You need to submit your latest income proof and bank statements.


Benefits of Instant Top-Up Home Loan:


Now that you have understood the benefits and eligibility criteria of a top-up Housing loan, it’s time to learn what benefits you can reap by getting a top-up home loan. 


  • Highly affordable: A top-up home loan has become one of the most economical finance instruments that enable using funds for personal requirements. Home loans, to begin with, are secured loans available at lower interest rates. As a result, the interest rate on an additional amount taken as a top-home loan also stays low. Moreover, the processing fee charged by different lenders on these loans is usually around 0.50%. 


  • Longer repayment tenure: The repayment tenure for a top-up home loan is much longer than for a personal or business loan. For example, if you have availed of a House loan with a repayment tenure of 20 years, you can further apply for a top-up home loan for the same period or lessor. Longer repayment tenure results in smaller EMIs, and borrowers can strategically plan their finances. In simple words, your top-up home loan will run parallel to the repayment tenure of your current home loan. 


  • Quick processing: One of the major benefits of a top-up home loan is that it is sanctioned quickly by the lender. Now that lenders have already confirmed your eligibility and financial standing at the home loan application procedure, you can get a top-up home loan without going through many formalities. A top-up home loan is the Best home loan that needs minimal documentation. Usually, lenders disburse the approved amount within a few days. 


  • Tax benefits: With the application of a top-up home loan, you can avail of tax benefits. However, tax deductions are only possible if you use the top-up home loan to buy the property or construct, renovate, and repair your home. The amount to be deducted as tax will be per the limits mentioned in section 80C and section 24B of the Income Tax Act. 


  • Higher loan amount: A borrower who consistently repays their EMIs on the existing Cheapest home loan and repays the maximum amount has a higher chance of getting the higher top-up loan amount. The financial institution will cross-check your latest income proof, credit score, and financial standing. If everything works out, then you can easily get your top-up home loan extended. 


  • Flexible usage: Top-up home loan offers flexible utilization of the approved loan amount. It implies that you can use the top-up home loan amount for home acquisition, renovation, improvements, and repairs, and financing your personal expenses, your education, and more. 


What documents are required for a top-up home loan?


Now that you are an established client of the lending institution, you might not need to submit additional documents. Your bank will already have your KYC documents, income proof, address proof, property papers, account statements, workplace proof, etc. However, your bank might ask for your latest income proof, credit score, bank statements, and other important documents. 


How Can You Apply for Top-up Home Loan?


To apply for the top-up home loan, you must have an existing home loan provided by the same lending institution. Always remember that the best home loan lenders offer top-up home loans only to their existing candidates, depending on their requirements and eligibility. With minimal documentation, you can borrow a top-up home loan amount from your existing bank.




Top-up home loans are one of the economical ways to borrow more funds, no matter if you have already Applied for a home loan. Since the eligibility criteria for a top-up home loan is similar to the home loans, you need not go through the same complex criteria twice. So, now that you know what a top-up home loan is, apply for it if you need money and avail yourself of all its perks. But be vigilant about the repayment plan and ensure that you don’t miss any EMI.


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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