A Guide to get a top-up loan

• cholamandalam
• December 10, 2023March 12, 2024
• 0

A top-up loan is a sum borrowed in addition to an existing loan. Put differently, top-up loans are a kind of financing option that borrowers can take advantage of from their existing lenders to cover their urgent demands. A prior relationship between a lender and a borrower is not permitted for these loans. On the other hand, you can choose to transfer your balance to a new lender if you find one with lower interest rates, and then you can apply for a top-up loan based on the transferred balance.
Top-up loans are a great option because they allow you to access funds immediately. After all, your lender already has all the KYC paperwork needed to execute your application.

What are the benefits of top-up loans?

• Top-up loans are the best option in situations where you need money quickly because they have quicker processing time. Since the lender already knows your circumstances and has all the necessary paperwork.
• Top-up loans are helpful for people who are handling several debts concurrently. This is because you can manage your debt and finances more easily by only having to worry about one EMI payment rather than having to balance multiple ones.
• In general, the cost of top-up loans is comparable to that of your existing debts. Because business loans have lower interest rates than personal loans, topping off a business loan has even more advantages. Furthermore, some lenders can permit you to reprice the remaining principal and the additional loan amount at a lower interest rate if market interest rates have decreased over time.
• Since the lender has previously verified your eligibility and completed KYC, the processing and documentation costs for a top-up loan would be less.

Who can apply for a top-up loan?

• You are required have an active loan and a rapport with a lender already in place.
• You should have a solid repayment history, which includes never missing or being late with any of your previous instalments
• You should have settled a specific amount of your outstanding loan balance already. Lenders often require 12 EMI payments before they will accept your request for a top-up loan.
• Maintaining a respectable credit score is essential; a 750 or higher CIBIL score is advantageous
• You should demonstrate that you have enough ability to repay. The ability of your present salary to pay off your debt, including credit card payments and the top-up, will be assessed by lenders.