A home loan is a secured borrowing obtained to fulfil a dream of purchasing a property. On the other hand, a top-up loan can be acquired by anyone who requires additional funds, but only if they are already servicing a home loan.
This additional fund can be utilised to meet various other expenses such as repayment of other debts, renovating a house, etc.
Therefore, if you are thinking of availing a housing loan in India or a top up credit, read on features and benefits before making an informed choice.
Features and benefits of home loan
- One of the primary advantages of a home loan is that one can avail substantial loan quantum at affordable interest rates compared to other unsecured loans.
- Ideally, this type of credit facility comes with a flexible home loan tenor of up to 30 years. Besides, borrowers can avail home loan tax benefits and save substantially on their repayment.
- Individuals need to meet home loan eligibility criteria to avail the desired loan amount.
Features and benefits of top-up loan
- A top-up credit enables borrowers to upgrade, improve, renovate an existing property.
- Unlike a housing loan, a top-up credit can be utilised to meet varied expenses.
- This loan is granted over and above the original home loan after checking the borrower’s creditworthiness, income status, etc.
- The approval process of a top-up credit is comparatively quicker as the borrower is already repaying an existing home loan with the lender.
Thus, home loan and top-up credit significantly complement each other and come with their own set of benefits. One must carefully study these aspects before availing a housing loan in India or a top-up credit as necessary.