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What is more beneficial – Home Loan Balance Transfer or Home Loan Top Up

What is more beneficial - Home Loan Balance Transfer or Home Loan Top Up

A Home loan is the best example of a good credit. A home loan makes you a proud property owner once the loan repayment is cleared. Moreover, the capital appreciation on the house is much more than what one invests. Though a home loan runs for a long period of time yet, the loan borrower can be eligible for availing a number of benefits from the existing home loan. In this article, the two terms that we are going to study are Home Loan Balance Transfer and Home Loan Top Up.

Home Loan Balance Transfer 

A home loan balance transfer is a process where you can transfer your outstanding home loan balance to another financial institution, where the loan repayment continues but with a new lender. It is usually opted to avail the benefit of low-interest rate. As most of the loans taken are at a floating interest rate, with a hike in MCLR, the interest rate which you were paying is certain to get affected. In such a scenario, a balance transfer acts as the only shield against the rate surge.

Any business would want to have good customers on board and banks are no exception. If you have been disciplined with your EMIs and own an excellent credit history, any financial institution will welcome you as their valued customer. One can take an advantage of such a situation and make a negotiation on the rate of interest. Needless to mention that lenders offer a much competitive interest rate for those borrowers who are early in their loan tenure and have an excellent repayment history. A reduced interest rate decreases the amount that you were paying as monthly installments. Though you may think you are saving a little money in each EMI but when you add it up you would be surprised to see a great amount that you save in total loan cost. you can also compare loans online.

Home Loan Top-up 

A top-up home loan is an excellent alternative to a personal loan. A personal loan is not the only way to avail multi-purpose fund. There are other better options which are cheaper and faster than personal loans. A home loan top-up is one of those options. One can avail a top up on his/her existing home loan. This can be used as a multipurpose loan. This open-ended loan can be used for any personal use of borrowers such as home furnishing, marriage expenses, taking a vacation, purchasing home appliances and many more. A home loan top up is a friendlier way of getting an emergency fund than a personal loan. A personal loan interest rate at present-day starts at 11.99% whereas one can avail a home loan top up at 1% more than the home loan interest rate. The reason which makes a top-up loan faster is that the lender already has all your documents. So a home loan top-up applicant need to submit the documents to the lender.  In a home loan top up, the process of document verification can simply be skipped. Availing a home loan top up instead of a personal loan is a much appreciable financial decision.

The Bottom Line

A home loan is such a credit which comes at a minimal interest rate. Home loans come with many benefits while making your dream home affordable. A home loan can better be called as an investment as it makes you being the owner of a property after some time. A home loan saves much in tax payment, the home loan transfer process decreases the loan cost and a top-up home loan provides you emergency fund. The advantages of a home loan are always welcoming and beneficial for the borrower.


Credit Score    Home Loan    Loan Against Property    balance-transfer    Business Loan    Personal Loan



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