Top-up loan means borrowing additional loan to your already existing loan. It is the easiest and the fastest way of receiving funds for meeting your immediate requirements. A top-up amount can be taken on any loan amount be it home loan, mortgage loan, car loan, business loan or a personal loan.

Benefits of Top-Up Loan

1) Top-up comes with relatively low rate of interest.

2) Can enjoy longer repayment tenure up-to 15 years.

3) Top up loan available as OD facility for self employed.

4) Interest is charged on daily reducing balance.

5) No pre & part payment charges.

6) Minimum documentation.

7) Minimum processing time.

Eligibility

1) Any Indian resident even non-resident Indian (NRI) can apply for a top up loan.

2) Minimum age of the borrower has to be 18-21 years and the maximum age can be 60 years.

3) Top-up eligibility is subject to your income eligibility. The FOIR (fixed obligation to income ratio) calculation of the Bank/NBFC for the loan eligibility is usually calculated as 60 % of your net income that can convert into EMI.

4) Top-up eligibility in secured loan i.e. home & mortgage loan largely depends on the market value of the property. The LTV (loan to value) is restricted to 60% of the market value.

Top-up Charges

1) Processing fees – 0.25% to 1 % on the loan amount + GST charges.

2) Disbursement Chargesof franking-0.20% on the loan amount + Admin Charges- of Rs.5900 (differs with bank) + Facility agreement charges of Rs. 600.

Tax Benefit on Top-up loan

Top-up loan does not qualify for a tax benefit. However the top-up taken on the home loan might get the benefit of tax deduction if the borrower is able to produce the required evidences such as legal documentation / receipts that can prove that a top-up amount has been used for renovation, repairs, construction of the residential property.

Documents Required For Top –Up Loan.

I) Salaried

1) Age Proof (PAN Card, Passport, Any other Certificate from Statutory Authority.

2) Residence Proof (Adhar card copy, Passport, Electricity Bill, Telephone Bill).

3) Latest 4 months salary slips.

4) Latest 2 years form 16.

5) Last 12 months Bank Account Statements.

6) Processing fee cheque.

7) Copy of LOD (list of documents)

8) Other documents as may be required by the bank.

II) Self-Employed / Professionals

1) Age Proof (PAN Card, Passport, Any other Certificate from Statutory Authority.

2) Residence Proof (Adhar card copy, Passport, Electricity Bill, Telephone Bill).

3) Certificate & Proof of business existence along with Business Profile.

4) Last 3 years Income Tax returns (self and business) with computation of income, Profit & Loss Account, capital account and Balance Sheet- duly certified/audited by a Chartered Accountant.

5) Last 12 months Bank Account Statements.

6) Processing fee cheque.

7) Copy of LOD (list of documents)

8) Other documents as may be required by the bank.

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