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.