We all know that life is unstable. It often happens that post availing a loan, the borrower comes across a necessity to apply for another one quite soon. The reason can be anything due to which you are required to take another loan.
Nevertheless, fortunately, in today’s era, you do not have to look upon another loan because new-age banks have upgrade option for you in your existing loan.
Yes! Borrowers today can access and avail an instant personal loan top up. Top up loans are the loans that allow a consumer to avail a loan besides their existing loan. Let’s walk out ahead in the post and know the top up personal loan in a further better way.
Benefits of Top up personal loan
Following are the benefits that you can enjoy on availing the top up on personal loans:
- Instant disbursal
A top up personal loan gets approved and disbursed faster. Furthermore, since the relation of the borrower and the bank is not new, the bank does not take much time and approves the loan application with nominal verification and documentation.
- Collateral free
Similar to a usual personal loan, a top up personal loan is also unsecured in nature, therefore you are not required to pledge any collateral.
- Multipurpose loan
There is no restriction on the usage of the loan amount. You can utilize the top up personal loan amount to meet any of your positive personal objectives.
- Appealing rates of interest
The rates of interest are quite lower than the usual personal loan interest rate. The difference of 1-2% on the lower side in top loan than the usual personal loan makes it attractive.
Factors you should know before applying for a top up personal loan
Take a look at the following factors that you must consider prior to applying for a top up on personal loans:
- Eligible applicant
In order to avail the top up personal loan, all you need is an existing personal loan. If you already possess a personal loan from a certain financial institution then you can apply for a personal loan top up.
A top up personal loan is an outstanding alternative for such borrowers to confront their financial stress. Since it’s a personal loan, financial institutions won’t really be so stressed about the objective of availing the loan.
- Keep satisfactory creditworthiness
Since you already have a personal loan, you better know that what a lender wants prior to extending you a loan. The lender wants to be sure about the repayment from your side of the loan.
So, they will check and if they found your creditworthiness and repayment history satisfactory, they may extend you the top up personal loan.
- Reasons to opt a top up personal loan
The lender will extend you the top up personal loan without bothering you about the usage of the loan amount since you already have the loan.
You may use the loan for any of your personal usages as you avail the usual personal loan. For instance, you may use the loan for home renovation, medical bills payment, wedding, etc. purposes.
- Tax benefits
If you use the loan amount to renovate your home or purchase a new home, you may also avail tax benefits on the interest amount of the loan.
- Flexible loan amount
You can avail up to 80% of the usual personal loan while availing a top up on it which can definitely be the pretty appealing sum and perhaps you can fulfil your needs.
Difference between a fresh personal loan and a top up personal loan – Highlights
Following are the 3 major variations that can be taken into consideration to understand the difference between both of them:
- A top up personal loan can only be availed when you possess an existing personal loan and it remains a better option when it comes to get further fund assistance as it can be availed in lesser time and on attractive rate of interest.
- If you possess a virtuous repayment history and you have a good credit score then you may easily get the top up on your existing personal loan.
- The maximum repayment tenor option in a personal loan is given up to 5 years (SBI gives 6 years), whereas the repayment tenure in a top up personal loan can be extended up to the end of the existing personal loan.
General checks performed by banks to extend top up personal loan
Following are the general checks that the bank performs before sanctioning quick personal loans top up:
- The bank checks that there is no EMI due
- The bank checks that you are paying the EMIs on time
- The bank checks your credit report to check whether you have taken other loans
- The bank checks the stability of your employment
The bottom stroke
A top up personal loan can be the best option when you do not have any way to getting funds and already possess a personal loan. You can get the personal loan top up instantly on the attractive rates of interest if you possess a good repayment history, good credit score and a good credit profile.
Eventually, you can avail emergency loans online using a Best Instant Personal loan app. You can find various personal loan apps online that extend you the option to avail an urgent loan.