Top up Home Loans

Buying a house is making it perfect to live in is a dream for all of us. Every house, however perfect involves minor interior and exterior works along with the interior decoration, which puts a massive burden on the owner. This is where a home loan top-up comes to the rescue.

What is a top-up?

A home loan top-up essentially involves taking extra loan, over and above your existing home loan.

What are the features of a top-up home loan?

  • Upto 40% of additional loan over and above the existing home loan can be given as top up.
  • Top-up loans can only be availed on an existing home loan
  • The home loan needs to have a successful repayment record to be eligible for the loan
  • The outstanding loan amount, the market value of the property and the repayment track record are the major qualifying factors
  • The top-up loan amount is usually 70-75% of the market value of the property less the outstanding loan amount.
  • There is usually no additional security required but every bank has its own qualifying criteria
  • Its generally used for home furnishings and fittings that are incidental to moving into a new house. Ex – your builder has given you a shell flat and you want a modular kitchen or wooden flooring of the bedroom, you can fund that from a top up of your home loan.

Personal loan Vs Home Loan Top-up

A top-up loan is better than taking a personal loan, because of the lower rates of interest. But it works similar to a personal loan where you can use the top up funds to meet your expenses.

Tax Benefits on a Top-up loan

The tax benefits are dependent on the end-use of the loan.

Tax benefits under Section 80C and Section 24 are applicable only if the proceeds from the top-up loan are used for purchase or construction of a new residential property.

No tax benefits are applicable under Section 80C if the proceeds are used for any renovation or repair which is carried out after issuance of completion certificate or after property has been occupied or let out.


Brandywine | 28-Jul-16

Right helped me sort things right out.

ravi sankar | 25-Aug-16

Great article thank you loanadda.

sikha | 21-Aug-16

My loan is running from last 5 years , on 11% , need to transfer on lower interest rate.

Aditya narag | 21-Aug-16

My property in unauthorized colony , i need home loan . Pls contact on my no. *****

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