A top-up personal loan is an additional loan amount offered to existing borrowers who need some extra funds over their original loan amount. It allows borrowers to access extra amount on top of their existing personal loan, usually provided by the same lender, with easier eligibility criteria and similar interest rates.
A personal loan has become a go-to for millions of Indians to finance their diverse cash needs. However, there can be instances where you may run out of these funds too. In such situations, a top-up personal loan can provide the additional financial support you need. It is a facility provided by banks and NBFCs where you can get an additional loan on your existing loan. This eliminates the need to go through the entire loan application and approval process all over again.
Considering a top-up personal loan? Here’s all you need to know about it.
Reasons Why You Should Applying for a Top Up Personal Loan
The reason behind applying for a personal loan is beyond the fact that it’s easy to apply. While there are different types of loans available in the market to meet the diverse needs of people, it can get a little difficult to manage multiple loans. Usually, there’s no restriction on the end usage of a top-up personal loan. This way, you can get instant access to the cash you need without applying for too many loans. And because you’re taking a loan from an existing lender, you need not apply again and get instant access to the cash you need.
Top Up Personal Loan — Features and Benefits
Unlock More Funds & Flexible Terms During Your Existing Loan
Understand what a top-up personal loan is before you apply. If you have an ongoing personal loan and suddenly need more cash, a top-up lets you borrow extra while you continue repaying your present loan. Here’s why it can be beneficial.
Unsecured Loan
No need to pledge any security or collateral. Get funds quickly without submitting gold, jewellery, shares, or other assets.
Longer Repayment Tenure
Extend your repayment period for more flexibility. You get more time to repay your total outstanding loan comfortably.
Lower Interest Charge
You may get a lower interest rate if you have paid EMIs on time and have a good relationship with your lender.
No Restriction on End Use
Enjoy the freedom to use the top-up loan amount as needed—for any purpose—without restrictions imposed by the lender.
Increase Credit Score
Timely repayment of top-up loan EMIs can help improve your credit score and unlock access to larger loans at better rates.
Need More Funds Instantly?
Take advantage of a top-up personal loan and enjoy flexible features tailored to your needs. Apply now to boost your finances effortlessly.
Apply NowEligibility Criteria for Top Up Personal Loan
While you can avail a top-up personal loan from your existing lender, you still have to meet a certain eligibility criterion to unlock that facility.
Here’s the eligibility criteria you need to fulfil:
- You should have an existing relationship with a lender.
- Ensure you make all your EMI payments on time and have a clean repayment history with the lender.
- A good credit score, clean repayment history and strong credit profile increase your chances of unlocking a higher loan amount.
Please note that the eligibility criteria for a top-up personal loan can be different for different lenders.
Documents Required for Top Up Personal Loan
One of the best parts about taking a top-up personal loan is that you may not have to provide a lot of documents. This is because you have an existing relationship with the lender, and they might already have the required information.
However, you can keep these documents and personal information handy to further expedite your loan application process.
- Identity Proof like your PAN card, Aadhaar card, passport, driver’s licence, etc.
- KYC documents like your utility bills, Aadhaar card, passport, etc.
- Income proof like bank statements, salary slips, etc.
Difference Between Personal Loan And Top-Up Personal Loan
Reason for difference | Personal Loan | Top-up Personal Loan |
Relationship with the lender | You can apply for a personal loan from any NBFC or bank. | You can get a top-up personal loan from your existing lender if they offer that facility. |
Repayment Tenure | Depending on your lender and type of personal loan, your repayment tenure can range from 3 months to even 10 years. | Usually, your repayment tenure of a top-up personal loan is similar to your current loan. |
Approved Loan Limit | The personal loan amount you’re approved for depends on many factors like your credit profile, income and even the limit of the lender. | Based on your lender’s terms of borrowing, your top-up personal loan amount depends on the current loan limit. |
Frequently Asked Questions
What Does A Top-Up Loan Mean?
A top-up loan is when you borrow money on top of an existing personal loan. You can avail a top loan without any lengthy documentation or paperwork as you already have an established relationship with the lender.
What Is The Maximum Top-Up Loan Amount That I Can Avail?
The maximum top-up loan amount that you can avail depends on your current approved loan amount with the lender.
Can You Get A Personal Loan On Top Of Another Loan?
Yes, taking a personal loan on top of another loan is known as a top-up personal loan. You will have to ensure that your existing lender provides a top-up facility.
What Is The Rule For Top-Up Personal Loans?
One of the most important rules for taking a top-up personal loan is that you make all your EMI payments on time and have a clean repayment history with your existing lender.
What Are The Disadvantages Of Top-Up Personal Loans?
A disadvantage of taking a top-up personal loan is that you can avail this facility if you have an existing relationship with a lender who offers this facility.
How Is Interest Calculated On Top-Up Personal Loans?
The interest rate you’re charged on a top-up personal loan is the same as your existing personal loan.
Does A Top Up Personal Loan Affect Your Credit Score?
Yes, it does. If you take a top up personal loan but don’t pay your EMIs on time, it may lead to a negative impact on the credit profile.
Are Tax Benefits Available On Top-Up Personal Loan?
Top-up personal loans do not have any tax benefits.
What Are The Main Differences Between Personal Loans And Top-Up Personal Loans?
One of the biggest criteria that sets personal loans and top-up personal loans apart is the source of borrowing. You can apply for a personal loan from any bank or NBFC, however, you can take a top-up personal loan only from an existing lender.
