Dialabank: Top-Up loan or Personal loan

Since childhood, we have been told how important it is to have a home, a place of your own. We were encouraged to invest in the house at a very young age by the people around us. Many young people today already have an existing home loan. But what if you are in financial trouble when you have a working loan that you are working hard to pay off?

There are many costs such as tuition fees and emergency medical bills incurred during a lifetime. Most of us prefer to get a personal loan under such circumstances. Before you make that decision, stop and think again, and think about a higher loan. Are you already taking care of a personal loan elsewhere and have a new need for the marriage to be completed? You have two options - an additional loan or a new personal loan - you have. Additional loans are provided by an existing lender, while a new personal loan can be provided by both existing and new lenders. Since you are already paying EMIs, you should choose an option that keeps payment obligations in your area. You need to make a conscious decision to take into account your present circumstances while caring for your future. To assist you in your decision-making process, Karur vysya bank personal loan has listed some restrictions on which you should consider both new acquisitions and new personal loans.

What Is A Top Home Loan?

If you have existing debt, your lender may allow you to borrow more than the amount you have borrowed. The extra money your bank offers is called a “Top-up Loan”. The lender will not offer a mortgage loan to all customers with a home loan but to customers with a good credit history. So, if you are a customer who makes your payment quickly, keep checking to see if you have this option.

Top-up loans compared to personal loans

Interest rate:
Higher loans come with lower interest rates compared to personal loans. We all know that high-interest rates are charged high as it is an unsecured loan. While borrowing a lot of money, your house acts as collateral. As additional loans are offered to existing customers on home loans and the bank has all the necessary documentation, it makes it much safer. Therefore, you can enjoy lower interest rates if you choose to borrow extra money instead of personal loans.
Tax Benefits:
Once you have been granted an additional loan, if you spend money on pre-existing reasons such as renovating a home or expanding your home, you can receive tax benefits up to a certain amount. However, if you get a personal loan to renovate your house, you may not be able to do so. Please check with your bank about the tax benefits you are entitled to before selecting a personal loan.
Duration:
Additional loan time is usually variable. Generally, a longer stay is allowed on comparative loans compared to personal loans. Many banks offer the remaining portion of your existing home loan as collateral for additional loans. This makes it a good alternative to personal financing.
Processing time:
When you apply for a personal loan, the time taken to process your application is usually longer. This is because this is the first time you are applying for a loan and the bank should check the documents, understand your profile, and verify the details. However, when it comes to additional loans, the bank already has your documents and would have confirmed your details. This greatly reduces processing time. Many banks allow their customers to apply for high-quality loans online using full banking and the bank withdraws that money within a few hours.
Simple documents:
As mentioned earlier, when you apply for an additional loan, the bank will already have all the required documents as you would have sent them to get a home loan in advance. Therefore, the documentation process is simple and time-consuming when choosing an additional loan. On the other hand, you will have to fill out many forms and submit various documents to get a personal loan.