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A personal loan top-up can go a long way in solving your financial questions. No doubt, it is quite popular amongst customers. Let us go through all that you need to know about personal loan top-up.
What is a Personal Loan Top up?
A top up loan is an additional loan that can be taken by a borrower who already has an outstanding loan with the same lender. The purpose of a top up loan is to provide the borrower with additional funds when they need it, without having to re-apply for a new loan. In order to be eligible for a top up loan, you must first have an existing loan with the same lender. The amount of the top up loan will depend on the amount of the existing loan, as well as the lender’s policies.
Benefits and Features of Personal Loan Top up
There are various benefits of taking out a personal loan top up. Here are some of them:
- Unsecured Loan
- Lower interest rates
- Betters your credit score
- No restriction on fund usage
- High loan amount
- Longer tenure period
Let’s explain these in detail.
Unsecured Loan
You don’t need to show any collateral for getting a personal loan top up.
Lower Interest Rates
Personal Loan top up can also help you save up on interest charges, as the interest rate on a top up loan is usually lower than the rate on a new loan.
Betters your credit score
A personal loan top up can help improve your credit score, as timely repayment of the loan will show that you are a responsible borrower.
No restriction on fund usage
Lenders don’t enquire about how you are going to use the funds. Therefore, you can put the funds for any thing you want.
High loan amount
The top up can be almost equal to the original loan amount.
Longer tenure period
The lender may extend your loan tenure if you take a top up on your personal loan.
If you are considering a personal loan top up, be sure to shop around and compare interest rates and fees from different lenders. You must also ensure that you can afford the monthly repayments before taking out a personal loan top up.
Eligibility Criteria for a Personal Loan Top Up
Given below are the eligibility criteria that you need to fulfil to get a personal loan top up:
Your credit history
One of the main factors that lenders will look at when determining your eligibility for a personal loan top up is your credit history. If you have a good credit history, you will be more likely approved for a personal loan top up.
Employment history
Another thing that lenders will look at is your employment history. If you have a steady employment history, your chances for a personal loan top up will increase furthermore.
Income
Your income will also be considered when determining your eligibility for a personal loan top up. If you have a good income, the chances of securing a personal loan top up are higher for you.
Debts
Your debts will also be considered when determining your eligibility for a personal loan top up. If you have a lot of debts, you may not be approved for a personal loan top up.
Assets
Your assets will also be considered when determining your eligibility for a personal loan top up. If you have a lot of assets, you will be more likely approved for a personal loan top up.
If you meet the above criteria, you can be eligible for a personal loan top up.
ID Proof
- Address Proof
- Income Proof
The lenders ask the same set of documents they had asked for the original loan application. Some may even ask you to review the old ones and only provide documents which have updated details.
How to Apply for Personal Loan Top Up?
Follow the below steps to apply for a personal loan top up:
- Visit the bank branch to apply for a top up offline. Fill up the required application and submit your documents.
- Check personal loan top up offers online on the bank’s website and fill the application.
- Once this is done, the lender will calculate the new EMI as per the interest amount and then disburses the loan amount.
Should You Take a Personal Loan Top Up?
There are a few things to consider before taking out a personal loan top up. Firstly, you need to make sure that you can afford the repayments.
Secondly, you need to consider whether you really need the extra money. If you can live without it, then it might be better to save up for what you want rather than taking out another loan.
And finally, you need to make sure that you shop around for the best deal on a personal loan top up. Just because you have a good relationship with your existing lender doesn’t mean that they will give you the best deal. It’s always worth shopping around to make sure you are getting the best deal possible.
So, should you take out a personal loan top up? That’s a decision only you can make. If you think you can afford the repayments and you really need the money, then it could be a good option.
