Top-up loan is an advance amount which you avail on top of your existing personal loan based on existing or increased interest rate and repay it within the monthly instalments of the existing loan, over a course of extended repayment period.
A borrower can avail personal loan top-up only after a period of 12 months from the date of disbursal of existing personal loan and if he/she is maintaining a satisfactory repayment track. However, some lenders allow borrowers to avail additional funds only after 6 months from the disbursal.
|Personal Loan Top-Up at a glance|
|Purpose||Medical Emergencies, |
Purchase of Costly Consumer Products etc.
|Maximum Amount||Upto 100% of Existing Loan|
|Interest Rate||10.99% – 24%|
|Tenure||12 to 24 months usually|
|Lock-in Period||12 Months usually|
Personal Loan Top-Up Offers
|Banks/FIs||Interest Rates||Max Loan Amount||When to Apply?|
|SBI||12.15%||Rs. 15 Lacs||After 12 months|
|HDFC Bank||11.39% – 20.99%||Rs. 50 Lacs||After 12 months|
|Axis Bank||15.50% – 24%||Rs. 15 Lacs||After 12 months|
|ICICI Bank||11.25%||Rs. 20 Lacs||After 12 months|
|YES Bank||10.75% – 15.90%||Rs. 25 Crores||After 6 months|
|Citibank||12% – 22%||Rs. 30 Lacs||After 12 months|
|Tata Capital||11.49% – 19%||Rs. 25 Lacs||After 12 months|
|Kotak||10.99% – 24%||Rs. 15 Lacs||After 9 months|
Advantage of Personal Loan Top-Up
Easy Access to Additional Funds
Availing a top-up loan gives you the easy access to additional funds in need. And, the borrower can utilise the funds for any purpose just like regular personal loan.
Since it is a top-up on existing loan account, the borrower doesn’t need to go through the entire documentation process again. All he/she need to provide is receipts of existing loan EMI repayments and KYC information.
Since top-up loan is an add-on to the existing loan account, the banks and financial institutions doesn’t ask for any third party guarantee or collateral security.
In case of top-up loans, banks and financial institutions tends to increase the tenure of existing loan. Hence, borrower can easily repay his loan without struggling with increased EMI amount or different EMIs.
Disadvantages of Personal Loan Top-Up
Increase in Total Loan Cost
Due to the additional funding, the borrower end up paying more towards the interest amount applicable on personal loan, which eventually increase the total cost of the loan.
- Applicant must be an existing borrower in the same bank.
- Applicant must have clean repayment track with no defaults.
- Applicant must have repaid 12 EMIs (6 EMIs in YES Bank and 9 EMIs in Kotak) before applying for top-up.
- Receipts of existing loan EMIs.
- KYC information