22 May, 2025 | 11:01 IST
Financial emergencies can strike unexpectedly, and when you are already managing a home loan, you may find yourself in a dilemma about how to secure additional funds. Whether it is for a medical emergency, business expansion, or funding higher studies, both a top-up home loan and a personal loan can offer quick solutions. Now, deciding between the two options can be confusing, as each has its own benefits and considerations.
Table of Contents
A top-up home loan is an extra amount you can borrow on top of your existing one. It is offered by the same lender who issued the original home loan. Lenders offer top-up home loans only to those whom they believe can return without any default.
The lenders grant these loans to borrowers who have a solid track record of timely repayments. While applying for a top-up home loan, you don't have to go through the full documentation process again, as the lender already knows your credit history and financial background.
Moneycontrol has partnered with eight trusted lending partners to offer fully digital personal loans of up to Rs 50 lakhs, with minimal documentation. To apply, simply select an EMI plan that fits your needs, provide your personal details, and complete the online KYC process. The loans come with attractive interest rates starting from 10.50%.
A top-up home loan can be a better option than a personal loan in some cases. It usually offers lower interest rates because it is secured against your property, which can help you save money on interest.
Top-up home loans also tend to offer higher loan amounts compared to personal loans, which are unsecured and have borrowing limits.
A top-up home loan is only available if you already have a home loan, while a personal loan is available to anyone who meets basic eligibility criteria. Depending on how much you need and how quickly you need it, both loans have their advantages.
Top-up home loan interest rates depend on the type of lender you choose and the repayment tenures can be the same as that of the home loan.
Here is the list of some of the top banks and their top-up home loan interest rates:
1. HDFC: The interest rate starts at 8.80% p.a. and goes up to 10.10% p.a.
2. SBI: The interest rate ranges between 8.30% p.a. and 10.80% p.a.
3. ICICI: It starts from 8.75% p.a. up to 9.10% p.a.
4. Bank of India: The interest rate starts from 8.25% p.a.
5. Canara Bank: The interest rate ranges between 7.90% p.a. and 10.75% p.a.
If you want a lower-cost borrowing option and already have a home loan, a top-up home loan clearly offers more attractive rates.
The process of applying for a top-up home loan is comparatively simpler and easier, as the lender already has your financial and property-related details. If the lender is confident that the borrower will repay the loan without default, they are likely to approve it.
The best part of this type of loan is that you don’t have to submit all the documents again, unlike when you applied for the original home loan.
Here is the process for a top-up home loan:
1. The first thing is that you need to submit an application to your lender for a top-up on your existing home loan.
2. The lender will then go through your repayment history, any other outstanding loans, your capability of returning the amount, and your current income.
3. After this, the lender will reassess the value of your property to determine how much of the additional amount should be.
4. At the end, after all the assessment is done, the lender will either approve or disapprove the loan.
5. If approved, the top-up amount will be directed to your bank account within few hours.
You must meet certain eligibility criteria to qualify for a top-up home loan. Let us have a look at these:
1. You should have an active loan with the same lender.
2. There should be a clean repayment record, like no defaults or late payments, for at least 6 to 12 months.
3. Most lenders will allow you to apply for a top-up home loan once you have completed at least 12 monthly instalments of your home loan.
If you already have an active home loan, then it is better to opt for a top-up, as it offers lower interest rates, a minimal documentation process, and a reduced monthly financial burden. One of the biggest advantages of a top-up home loan is its longer repayment tenure. It can be extended to a longer tenure even up to the tenure of your home loan, unlike personal loans, which usually come with shorter tenures, such as one to 5 years.
You can download the Moneycontrol app on your smartphone to apply for loans of up to Rs 50 lakhs with interest rates starting from 10.5% per annum. The loan approval process is fast, and the amount could be credited into your account within a few minutes to a few hours.
Share it in your circle
Table of Contents
Explore Top Lenders for Instant Loan upto
Get Instant Loan up to ₹50 Lakhs with Zero Paperwork from Top Lenders
100% Digital
Quick Disbursal
Low Interest Rates
