Opting for a personal loan due to a sudden financial emergency can provide access to a considerable amount of funding at the earliest. However, at times it may not be sufficient. In such cases, individuals can opt for a top-up personal loan.
Therefore, to enjoy maximum benefits, individuals should consider opting for a top-up loan rather than a fresh loan.
5 benefits of opting for a top-up personal loan
Applicants who maintain a satisfactory credit history and diligently repay previous loan amounts are eligible for a top-up personal loan. Also, applicants can opt for interest-only EMI during the moratorium period of their repayment term. Here are some of the other benefits that come with a top-up personal loan:
Attractive interest rates
Top-up personal loan interest rates are comparatively lower than other unsecured credit options. This helps reduce the cost of a loan and EMI payable. However, there are different factors that affect your personal loan interest rates on top-up loans, like income stability. Usually, applicants with a higher income have more chances of getting attractive interest rates. Also, individuals must have a clean credit history as it will affect the interest applicable on a top-up loan. Applicants can also use the interest rate calculator to ensure quick and error-free interest and EMI computation.
2. No end-use restrictions
A major benefit of applying for a top-up personal loan is that it provides the applicant flexibility of usage. Therefore, applicants can use the loan amount for multiple reasons like medical emergencies, debt consolidation, higher education, home renovation or wedding expenses. Moreover, it ensures quick financing against simple eligibility requirements.
3. Access to high-value loan amount
Individuals can opt for a high-value loan amount with a top-up against an existing personal loan. For example, if the applicant requires Rs.30 lakh in total, the maximum limit of availing personal loans at institutions like Bajaj Finserv is Rs.25 lakh. In such cases, the applicant can opt for a personal loan of Rs.20 lakh and a top-up loan of Rs.10 lakh. Thereby, it will help increase the total loan amount.
4. Get quick loan processing
Since top-up loans are available against an existing low income personal loan, the application process is much faster. The individual should maintain a high credit score to be eligible for a top-up loan. After the applicant applies for this credit option, it ensures immediate approval. Usually, at institutions like Bajaj Finserv, the applicant can receive same-day disbursal upon approval of application.
5. Get tax benefits
Although top-up loans do not qualify for tax deductions, applicants can get a certain rebate if the amount is used for specific end-use, such as business expansion, home renovation and purchase of other assets.
However, you should know smart ways to manage your top-up loans to gain maximum benefits.
How to apply for a top-up personal loan online?
Here is a step-by-step guide to applying for a top-up personal loan.
Step 1: Individuals must visit the website of their preferred financial institution.
Step 2: Fill the online application form with personal and financial details.
Step 3: Choose loan amount and repayment tenor.
Step 4: Representatives of the financial institution will verify the application and provide instant approval.
Therefore, any applicant interest in opting for a top-up personal loan can apply at leading institutions like Bajaj Finserv. They maintain 100% transparency and also provide flexi loan facilities. Also, this credit option is available to individuals at a 45% lower EMI.
To simplify the loan application process, applicants can opt for pre-approved offers. These offers are also available on other products like credit cards, business loans, etc. To check your pre-approved offers, enter your name and contact details.
So, applicants should opt for a top-up personal loan rather than applying for a new loan. It will give them access to a higher loan amount without doubling the amount of EMI payable.