3 Best Reasons to Choose Home Loan Top Up

    Buying or building a house is one of the biggest dreams for many. People often apply for home loans to make house construction or purchase less burdensome. Since building or renovating a house is a huge task, no one knows much funds might get drained. Homeowners often apply for separate personal loans to upgrade or renovate their homes. However, some financial institutions provide the option of a home loan top-up to help homeowners achieve the same thing without spending a fortune. 

    This article lists the top three reasons why you must choose a quick home loan top-up to carry out repairs, renovations, or upgrades to your home.  

    3 Best Reasons to Choose Home Loan Top Up

    Home loan top-up refers to an extra loan amount you can get from your financial institution to carry out renovations, repairs, or upgrades to your home. financial institutions provide the top-up facility to eligible borrowers with an existing home loan. 

    Besides maximising the tax exemption on a home loan, a top-up loan also provides attractive interest rates, extended tenure, and instant approval. 

    The following are the three most significant benefits of applying for a home loan top-up:

    Excellent Tax Exemption on Home Loan

    A home loan provides tax benefits under Sections 80C and 24 of the Indian Income Tax Act. For instance, you can claim tax deductions of up to INR 1.5 lakh every financial year for repaying the principal amount of your home loan. 

    Moreover, you can claim tax deductions of up to INR 2 lakh for repaying the interest on your home loan. 

    Like your existing home loan, the home loan top-up is also eligible to be included in the total amount for calculating the tax exemption on home loan. So, if your existing EMI is not enough to claim the maximum tax exemption, you can include the EMI of the top-up to save more on taxes.

    Extended Loan Term

    When it comes to the loan repayment term, a home loan provides the most extended tenure. So, if the EMI of your home loan is considerably less than what you can afford, you can avail of a home loan top-up to repair, renovate, or upgrade your sweet home.

    However, remember that you have to pay the top-up loan’s EMI before the last due date of your existing home loan.

    Low-Interest Rate

    It’s a fact that home loan interest rates are lower than almost all other loans. This is because home loans are secured with relatively low credit risk. So, financial institutions offer more affordable interest rates on home loans.

    It is good to note that the interest rate of top-up loans is the same as the prevailing home loan interest rate.

    Now that you know the three best reasons to apply for a home loan top-up, let us learn about the factors affecting its approval.


    The home loan top-up facility is not available to every borrower. financial institutions provide top-up loans only to borrowers who have paid their EMIs regularly for at least one full year. 

    Also, if your Debt-to-Income ratio is higher than 40%, your financial institution might scrutinise your application carefully to ensure that you are capable of repaying the increased amount. 

    However, if you meet all the criteria set by your financial institution, your top-up loan application will be approved, and the funds will be disbursed to your bank account within the stipulated time.


    You can apply for a home loan top-up by visiting your financial institution’s website or branch office and expressing interest in the top-up loan. If you apply online, your financial institution will send a representative to your registered postal address to complete the formalities. Once the application process is successful, the financial institution transfers the amount to your bank account.

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