What are the Benefits of a Top-Up Loan?

Applying a personal loan online or a home loan to purchase a long-term asset may not put all your troubles to an end. 

Emergency cash requirements may crop up during the most unexpected times. 

Good news! Whether it be your children’s education or an urgent medical crisis, renovations for your new home, raising business capital, marriage expenses, or other personal or professional emergencies, what can be most easily availed over and above your home loan is a hassle-free top-up loan!

With a top-up loan, you can meet your immediate need for cash as well as continue to pay your original loans EMIs without mounting any financial pressure on yourself or your family.

What is a Top-Up Loan?

A top-up loan can be defined as an additional loan on top of your existing loan. This loan can be availed by you anytime. However, you should have at least a year of the repayment history of your existing original loan. 

Top-up loans are processed and disbursed more easily than unsecured personal loans, credit cards, or car loans. Top-up loans have processing fees as low as 0-6% of the loan amount.

Top-up loans have various other benefits, and they can be sanctioned for a host of personal reasons. Any definite purpose need not be stated to apply for the loan. Some of these reasons could be as follows:

However, there are a few mandatory conditions that need to be met in applying for a top-up loan.

Eligibility Criteria to Apply for a Top-up Loan:

Eligibility criteria for applying for a top-up loan are given below:

  • You need to have an ongoing loan facility to apply for a top-up loan.
  • You must have a good payment history and credit score to have a top-up loan sanctioned against an existing loan.
  • If your EMI record of the ongoing loan repayment is inconsistent, your application for a top-up loan will likely be turned down.
  • Your approval of a top-up loan is contingent upon your having a timely credit record so that the bank or organization can feel assured about your due repayment of the top-up loan in time.
  • Conversely, if you have made all your loan repayments in a timely manner, obtaining approval for a top-up loan will be smooth, prompt, and hassle-free.
  • The minimum age for the top-up loan application is 18 years.
  • The maximum age for application is 70 years.
  • The borrower applying for the top-up loan must either be an Indian resident or an NRI. 

What are Some Key Features of a Top-Up Loan?

Even though the specifications vary with the borrower’s history and the type of bank or NBFCs, some key features of a top-up loan are its long-term tenure and high loan value.

Other essential features are given below.

  • The validity for a top-up loan is up to 30 years. Alternatively, the top-up loan will be sanctioned until the tenure of the original loan.
  • While the exact amount granted as a top-up loan varies from bank to bank, a total amount of up to 50 lakh rupees may be sanctioned. However, in the case of a home loan top-up, both the actual home loan value and the top-up loan value should not exceed 70%-80% of the value of the house property.

What are a Few Benefits of Top-Up Loans?

Below are some of the benefits of a top-up loan:

  • Low-Interest Rates

Top-up loans charge lower interest rates than other unsecured loan options, such as a loan against property.

According to the FY 2021’s stats, the home loan top-up rate for the year lies between 6.66% to 10.2%, while most banks charge personal loan interest rates between 10.50% and 21% per annum. This makes repayment easy without the burden of huge monthly EMIs.

  • Easy to Procure

Top-up loans are easy to procure because the long and bothersome process involved in getting approval for a loan does not factor in much. 

If you have a good credit score against your home loan with a history of timely repayments, then you can accomplish the following easily. 

These include- submitting your certificates, winning over credibility as a borrower, or obtaining a valuation for your documents. 

If you can fulfill the criteria of a good credit score combined with timely loan repayments, the remaining process should be easy and hassle-free.

  • Smooth and Fast Disbursement

A top-up loan is guaranteed with fast disbursement as the time required for paperwork is significantly reduced. 

You will have already submitted all necessary documents when borrowing the previous loan over which you are borrowing the top-up loan. 

Thus, a top-up loan should be beneficial during times of utmost emergency because the cash can be disbursed faster than usual.

  • Long-Term Tenure

The long-term tenor of a top-up loan allows for easy repayment over many years.

The top-up loan over personal loans usually comes with a tenure of 20 to 30 years. Personal loans, on the other hand, must be repaid over 5 years only. 

Thus, a top-up loan gives ample time to the borrower for repayment as the monthly EMI amount is significantly reduced owing to the increase in time in years.

  • Non-Restricted Utilisation

Top-up loans do not restrict usage. You can use it to fulfill a variety of functions.

You can invest in home decorations and renovations with the top-up loan or use it for different purposes, such as to fund a child’s education, sponsor an international trip, pay up necessary medical expenses, and so on. 

  • Tax Benefits

Top-up loans offer additional tax benefits if utilized for some specific purposes. 

If used for your children’s education or to pay for certain home renovation, repairs, constructions, alterations, purchases, etc., you can get tax benefits on your top-up loans according to Sections 80C and 24B.

Certain conditions are imposed on these relaxations, so it’s best to consult a trustworthy CA to make an informed decision.

What are the Top Banks and NBFCs for Obtaining a Top-Up Loan?

Top two banks for obtaining a Top-Up Loan:


  • Rate of Interest: 11.25% to 17.99%
  • Loan Amount: Up to 25 lakhs
  • Tenure: 20 years


  1. Processing of documents is fast and simplified.
  2. Disbursal of loans is fast.
  3. Collateral is not required.


  • Rate of Interest: 11.25% to 21.50%
  • Loan Amount: Up to 40 lakhs
  • Tenure: 15 years


  1. The loan can be sanctioned within a day from the date of submission of necessary documents.
  2. Easy eligibility calculation in 1 minute at the official HDFC Bank website and select branches.
  3. Instant loan grants for pre-approved HDFC customers.

Top two NBFCs for Obtaining a Top-Up Loan:

Money View


  1. Affordable rate of interests
  2. Flexible repayment tenure.
  3. Organized borrowing as securing a top-up loan over a personal loan opens up a new loan account containing the existing loan due amount and the top-up repayment amount.



  1. Quick approvals and disbursals.
  2. EMI plans are affordable.


A top-up loan is an attractive loan option for the host of benefits that it offers. A top-up loan can be borrowed on top of an existing home loan, property loan, or personal loan.

If you were looking for a higher amount on your existing loan but could not get it, a top-up loan can be a boon as it affords the extra cash you were looking to avail.

At Money View, you are also eligible for a higher top-up loan amount than requested initially if your income increases after a point. Moreover, borrowing money is rendered organized and smooth at Money View as a new loan account will be opened up for you containing due repayment amounts of both loans together- the ongoing personal loan and the top-up loan. Timely repayment reminders will ease the experience for you with low interest and documentation rates.

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