You may be looking for finance to fund an expense like business expenses, renovate your house etc. To fulfil the need, the first question that will arise in your mind will be, “How to pay for it?” If you do not have enough cash available, you might think of taking a loan but, which loan should it be? While searching for the appropriate loan, you might come across the term “top-up loan” or “top-up home loan”.
Taking a home loan is the best possible way to buy your dream home. But, home loans may not be able to meet your other financial needs. If you are looking to renovate your home or meet your personal or business expenses, then a top-up loan on your existing home loan will prove to be a cost-effective solution.
What are Top-up Loans?
If you currently have a home loan and have made repayments timely, then your bank can give you the option of borrowing an additional loan, which will be equal to the amount of your current housing loan that you have paid so far. A top-up loan or top-up home loan is offered to you above your current home loan. Top-up loans provides support in case of any financial crunch that you may face while renovating or repairing your home. Top-up loans does not come with any precondition, which enables you to use the funds for any other need as well.
Eligibility
Top-up loans can be availed by existing home loan borrowers. You are only considered for top-up loan when you have started making repayment of your home loan for a minimum period, which depends on your bank. Usually, banks tend to have a minimum repayment period of 2-3 years before they consider you for a top-up home loan. Also, banks will consider you for a top-up loan only when you have a healthy credit score and a good repayment record. The chances of top-up loan can reduce, if you have a low credit score or delayed repayments on your home loan.
What is Gold Loan?
Gold has seen a good amount of capital appreciation over the years. You can use this gold to provide fund in case of any financial crunch such as medical emergency, child education, business expansion etc. If you are need of funds, you can utilise the gold lying in your lockers to fund your urgent requirement. Gold loans are one of the fastest and hassle free loans available. You can get loan against any form of gold available like gold coins, biscuits and jewellery.
Eligibility
Gold loan can be availed by mortgaging your gold for funds required to support the financial crunch. Gold loans generally come with base interest rates of 11-14%. But, the interest rates tend to vary across banks. You can consider taking gold loan if you have enough gold available with you and if you are able to get a loan at a reasonable rate. However, gold loans are granted for a short term of 1-3 years. So, you should take gold loan only if you think you can repay it in the short period of time.
Is Top-up Loan a Better Option than Gold Loan?
Top-up Loan is not required to be used necessarily for home related expenses. It can be used for any random expense as the lender holds the first mortgage on the property.
On the other hand, Gold Loan is one of the easiest forms of fund you can avail by mortgaging your gold assets.
However, both Top-up Loan and Gold Loan have different markets. If any borrower already has a home loan, then it becomes easier and hassle free to avail top-up loan if the borrower maintains a healthy credit score and has made repayments on time. There are two benefits of top-up loan over gold loan.
· Lower interest rate – Top-up Home loans are generally available at a lesser interest rate than gold loan.
· Longer tenure - Top-up home loan is available for a longer duration of time than gold loan. Gold loans are available for a short duration of time. Thus, you should be able to repay the loan in the short duration of time.
Taking a home loan is the best possible way to buy your dream home. But, home loans may not be able to meet your other financial needs. If you are looking to renovate your home or meet your personal or business expenses, then a top-up loan on your existing home loan will prove to be a cost-effective solution.
What are Top-up Loans?
If you currently have a home loan and have made repayments timely, then your bank can give you the option of borrowing an additional loan, which will be equal to the amount of your current housing loan that you have paid so far. A top-up loan or top-up home loan is offered to you above your current home loan. Top-up loans provides support in case of any financial crunch that you may face while renovating or repairing your home. Top-up loans does not come with any precondition, which enables you to use the funds for any other need as well.
Eligibility
Top-up loans can be availed by existing home loan borrowers. You are only considered for top-up loan when you have started making repayment of your home loan for a minimum period, which depends on your bank. Usually, banks tend to have a minimum repayment period of 2-3 years before they consider you for a top-up home loan. Also, banks will consider you for a top-up loan only when you have a healthy credit score and a good repayment record. The chances of top-up loan can reduce, if you have a low credit score or delayed repayments on your home loan.
What is Gold Loan?
Gold has seen a good amount of capital appreciation over the years. You can use this gold to provide fund in case of any financial crunch such as medical emergency, child education, business expansion etc. If you are need of funds, you can utilise the gold lying in your lockers to fund your urgent requirement. Gold loans are one of the fastest and hassle free loans available. You can get loan against any form of gold available like gold coins, biscuits and jewellery.
Eligibility
Gold loan can be availed by mortgaging your gold for funds required to support the financial crunch. Gold loans generally come with base interest rates of 11-14%. But, the interest rates tend to vary across banks. You can consider taking gold loan if you have enough gold available with you and if you are able to get a loan at a reasonable rate. However, gold loans are granted for a short term of 1-3 years. So, you should take gold loan only if you think you can repay it in the short period of time.
Is Top-up Loan a Better Option than Gold Loan?
Top-up Loan is not required to be used necessarily for home related expenses. It can be used for any random expense as the lender holds the first mortgage on the property.
On the other hand, Gold Loan is one of the easiest forms of fund you can avail by mortgaging your gold assets.
However, both Top-up Loan and Gold Loan have different markets. If any borrower already has a home loan, then it becomes easier and hassle free to avail top-up loan if the borrower maintains a healthy credit score and has made repayments on time. There are two benefits of top-up loan over gold loan.
· Lower interest rate – Top-up Home loans are generally available at a lesser interest rate than gold loan.
· Longer tenure - Top-up home loan is available for a longer duration of time than gold loan. Gold loans are available for a short duration of time. Thus, you should be able to repay the loan in the short duration of time.
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