4 MinsMar 24, 2021
As an investment and an asset, a home can be put to use in several different ways. If it is your second home it can be rented out to earn additional income. But even if you are living in your home and repaying a home loan, you can still borrow
against it, by availing of a Top-up Home Loan.
Who can avail of a Top-up Home Loan?
A top-up home loan can be availed if you are an existing home loan customer or by way of balance transfer of your existing home loan to Axis Bank. But usually you would need six to twelve months of a clear repayment record. This means
that if you are already a home loan borrower, have completed the required months of repayment track record, and need extra finance over and above your existing home loan, a top-up home loan may be considered.
How much can you borrow?
The bank usually follows a Loan to Value (LTV) ratio of around 75% - 80% of your property value. And as regards the loan repayment tenure, it will be the same as the outstanding home loan tenure.
As an Axis Bank customer, you can avail of up to Rs 50 lakh against the mortgage of your property with the top-up loan.
Easy to get
A Top-up Home Loan can be availed by existing customers of the bank or by way of balance transfer of your loan from another bank. Since the bank already knows your financial
and personal details, the loan is simple to apply for, hassle-free involves minimal documentation, and is processed quickly.
Keep in mind, to avail of a top-home loan, it is necessary to have:
- A clear repayment history
- A worthy credit score
- Monthly income that can cover your additional loan amount.
[Also Read: A home loan can be yours even without monthly salary slip]
The bank would also evaluate how much is the outstanding amount of your existing home loan and your current age.
The purposes for which you can avail a Top-up Home Loan are:
- The extension or renovation of existing property
- Personal requirements such as children's higher education or wedding expenses
- Medical emergencies
- For starting a business or growing your existing business
The loan cannot be used for the purchase of another residential or commercial property, nor any speculative and illegal activities.
Advantages of Top-up Home Loan:
- You can get faster approval and disbursal since you are an existing home loan customer of the bank
- You can get the loan at an attractive interest rate as it is similar to the bank’s existing home loan rates
- You may get tax exemption on repayment of the additional amount as well, subject to criteria regarding the end use of the top-up amount
If you need limited funds in a hurry and are already repaying a home loan, then a Top-up Home Loan is best suited to meet your needs. Visit the website to know more about top-up home loans.
Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm. Axis Bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.