The rising popularity of personal loans is due to borrowers’ massive demand for unsecured credits. Besides their zero end-use restriction and collateral-free nature, the availability of a top-up personal loan further makes personal loans one of the most popular financing options.
However, individuals must meet the lender-specific eligibility parameters to avail this credit facility.
Eligibility Parameters of a Top Up Personal Loan
A top up personal loan is a special type of credit that can be availed over a borrower’s existing loan. For instance, suppose a borrower is servicing a personal loan of Rs. 20 lakh. However, while paying the EMIs, they need urgent monetary assistance to meet financial needs. In such a scenario, applying for a new loan can be difficult and time-consuming.
A top-up loan can act as instant monetary assistance, allowing the borrower to obtain additional cash without the requirement of a fresh loan application. The eligibility criteria of personal and top-up loans are similar as both the advances are unsecured.
Though the eligibility criteria vary with lenders, the common ones are-
- Applicant must be an Indian resident
- CIBIL score must be 750 or above
- Applicant’s age should be within 21 – 67 years
- Applicant must be employed in an MNC, public, or private organization
- One’s salary should be Rs. 22,000 or higher, depending on the city of residence
Since a top-up loan is availing of finances over and above the personal loan from the same lending institution, individuals are not required to undergo additional documentation to obtain the credit. However, individuals need to know the documents required while applying for a personal loan.
Benefits of a top-up loan
Although individuals can avail of a personal loan to meet their financial requirements, there are possibilities that the loan amount that has been availed may not be sufficient. In such cases, individuals can apply for a top-up personal loan. One can either combine personal loan top-up or apply for it separately. This financing option is reliable and flexible to meet any financial need.
If you are still wondering why you need to opt for a top-up personal loan, here are some of the benefits-
- Additional loan amount
A top-up loan allows borrowers to obtain additional funds which are not associated with their personal loan amount. For instance, if the maximum available personal loan amount is Rs. 25 lakh, and a borrower needs Rs. 35 lakh, In that case, one can borrow Rs. 25 lakh as a personal loan and Rs. 10 lakh as a top-up amount.
Borrowers must note that leading NBFCs like Bajaj Finserv allows borrowers to avail monetary assistance in the form of top-up loans within 24 hours* and without hidden charges.
- Easy processing
Individuals having an existing relationship with a financial institution can enjoy faster processing of a top-up loan than a personal loan. Therefore, the disbursal of the loan amount is faster.
- No collateral
No financial institutions demand collateral for a top-up loan. Therefore, borrowers with no such high-value asset can avail this credit facility without hassle.
- Extended repayment tenor and interest rates
With a top-up personal loan, borrowers can enjoy a flexible tenor that lowers the EMI value and ensures a smooth repayment.
Besides, a top-up loan comes with a minimal interest rate that ensures a borrower’s affordability and repayment flexibility. Individuals can use an interest rate calculator to evaluate the EMI, interest component, and overall loan amount beforehand, easing the repayment procedure.
Usually, top-up loans are not considered a different loan by the credit agencies. Thus, choosing a top-up personal loan will not impact on borrower’s credit profile. Therefore, next time when you think about ‘top up loan vs personal loan, what should you pick,’ consider these factors.
Also, individuals can take a look at the pre-approved offers extended by these NBFCs that will significantly accelerate and simplify the loaning procedure. These offers are available on a wide range of secured and unsecured products. Therefore, check your pre-approved offer by mentioning your name and contact details.
As per reports, the growth of the personal loan sector is primarily propelled by salaried individuals. Nevertheless, before applying for a top-up personal loan, one should check the associated loan fees and charges to avoid any financial burden in future.
Read Also: How to Get a Personal Loan for Students in India?
