Top Up Your Home Loan!

By | December 31, 2015

Top Up Your Home Loan!

Buying a new house and decorating it just the way we want is an aspiration for a lot of us. But there are times when we run short of cash, to finish up the interior, exterior or to add some final touches to our new house. That’s when a top-up loan on an already existing Home Loan comes as a boon and helps us fulfill all our last minute desires.

Well, how does a top-up loan on an existing Home Loan actually work? Let us help you learn all about this so that you too can apply for a top-up loan if you fall short of funds.

What does topping up a Home Loan mean?

Just like a top-up recharge on your mobile when you run out of currency, similarly a top-up loan on an existing Home Loan can be done when you are running low on funds. The usual tenure of a top-up Home Loan is 10 years and it is offered only after the completion of a few years of the actual Home Loan.

Banks consider your repayment track record over the last few years before disbursing a top-up loan on your existing Home Loan. A top-up loan acts almost like a Personal Loan which helps you cover any additional or last-minute charges on your new house!

Are you eligible?

You are eligible to apply for a top-up loan only when you have an existing Home Loan with any bank. The conditions vary from one bank to another. Ideally speaking, you can approach the same bank where you already have an existing Home Loan and they can help, but in case your bank does not offer a top-up loan facility, you can approach other banks as well.

Features of a topped up Home Loans

  • The current outstanding loan amount, market value of the property and your past repayment history are the major factors banks take into account before they disburse the top-up loan.
  • The upper limit of the total Home Loan (including top-up loan) cannot exceed 70% of the current market value of the property.
  • So every bank has its own method of calculating this upper limit and then disbursing the top-up loan.
Do you get tax benefits?

You can get tax benefits on your top-up loan depending on the purpose for which the amount is being used. For instance, if you are paying for the parking space in your apartment with the top-up loan, then you can avail a tax benefit since parking charges fall under property-acquisition charges. So you can get a tax benefit on both the principal and amount repaid towards the top-up loan which is capped at Rs. 1 lakh and Rs. 1.5 lakh, respectively.

However, before applying for a top-up Home Loan, keep in mind that if you have to repay any other loan (apart from a Home Loan). Do the calculations accordingly and go for it!

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit for the latest rates/offers.

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