NEWS & ADVICE : HOME LOANS
Top up loans: toppings on your home loan
By Joseph Samson
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Factors deciding the loan amount for top up loans

The top up loans come with certain conditions. In other words, there are some criteria which decide the eligibility of an individual for a top up loan and the amount of loan to be disbursed to him. As an individual makes home loan repayments, the amount outstanding from the total loan amount disbursed declines which makes him eligible for top up loans. This means the borrower must have started the process of loan repayment before applying for top up loans.

Higher the amount of home loan repaid, higher is the eligibility of the person for a top up loan and greater is the amount that would be disbursed to him.

There are certain factors which are considered by lenders before granting these loans. They are:

• The amount of loan outstanding (that is the amount of loan the borrower is yet to pay to the lender)
• The value of property (current market value of the property of the borrower)
• The repayment capacity ( this includes the income level of the customer as well his savings)

Banks offer as much as 70% of the market value of the property as top up loan. In addition to this there is a maximum ceiling to the amount to be lent which differs from lender to lender. The interest rate charged on these loans is the same as the prevailing home loan rates.


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(Comments Posted : 43) Post Your Comments
1. How to rate of interest top up lone
vishnu B Katare (Posted: Mar 17, 2017)
2. I have a home and top-up loan with SBI in a joint account with spouse. Home loan is closed by SBI life after My husband expired. But the top-up loan is still on for more 20 years. Do I have the option to reduce the top-up load term to 5 years and close it, instead of prolonging. Also can you please confirm if tax exemption is given on these top-up loans?
Surekha (Posted: Jan 7, 2017)
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Debora Orr (Posted: Oct 20, 2015)
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