Features of Top-up Personal Loan
Given below are a few key features of top-up personal loans:
- Available only on an existing personal loan: You can avail a top-up personal loan only if you have an existing personal loan.
- No Security/Collateral Required: In the case of most lenders, borrowers are not required to provide any security or collateral to avail a top-up personal loan. They may not need a guarantor either.
- Attractive interest rates: Banks and financial institutions typically offer top-up loans at same interest rate as the originally approved personal loan. The final top-up personal loan interest rates offered to applicants would vary depending on their credit profile.
- Loan amount: The maximum loan amount offered under the top-up loan category varies from one lender to another. However, the quantum of top-up loans would not exceed the overall loan amount eligibility of the borrower after factoring his outstanding personal loan amount.
- Flexible repayment tenure: You can avail a top-up on your personal loan for a tenure ranging between 12 to 60 months not exceeding the outstanding tenure of your existing personal loan.
- Offered on Balance Transfer as well: Some lenders offer top-up personal loans on balance transfer as well. These facilities is suitable for those unable to avail top-up personal loans from their existing lenders or are being charged higher interest rates for it. To know more about personal loan balance transfer click here
- Flexible end use: You can avail a top-up on your outstanding personal loan to pay for various personal financial expenditures, similar to a personal loan.
- Quick processing and disbursal: Since a top-up loan is offered to borrowers who have already availed a personal loan from the lender, they have already undergone checks by the lender, they can get approved for a top-up loan much faster as compared to applying for a new loan.
Interest rates for Personal Loan Top-Up
Top-up loan interest rates can vary widely across lenders. They would also vary depending on the various aspects of applicant’s credit profile such as his/her credit score, the quantum of loan sanctioned, loan tenure, nature of employment, etc. Usually, the top-up personal loan interest rate is the same as your existing/outstanding personal loan interest rate.
However, if you are looking for Top-up loan, you can also check and compare from Personal Loan Interest Rates offered by leading banks and NBFCs leading banks and NBFCs in the country are given below:
|Banks/NBFCs||Interest Rates (per annum)|
|HDFC Bank||10.25% – 21.00%|
|SBI||9.60% – 13.85%|
|PNB||7.90% – 14.50%|
|ICICI Bank||10.50% – 19.00%|
|Axis Bank||10.25% p.a. onwards|
|Kotak Mahindra Bank||10.25% onwards|
|IndusInd Bank||11.00% onwards|
|IDFC First Bank||10.49% – 23.00%|
|Bajaj Finserv||13.00% onwards|
|Tata Capital||10.99% onwards|
Note: The above-mentioned interest rates may change and shall depend on the sole discretion of the bank and RBI. Interest rates are updated as on 22th Dec 2021.
Click here to compare personal loan rates of all major Banks/NBFCs
Fees & Charges
Some key fees and charges associated with personal loan top-up are given below:
|Processing fee||0% – 6% of the loan amount|
|Part-Payment Charges||As per the loan agreement|
|Foreclosure Charges||Up to 7% of the principal outstanding|
Note: GST will be additionally added to the mentioned fees and charges.
Top-up Loan Eligibility Criteria
The following eligibility criteria must be taken into consideration when applying for a top-up personal loan:
- You can avail a top-up personal loan only if you have an outstanding personal loan (existing relationship) with the lender
- A top-up loan can be availed only after a certain stipulated time has passed- after you have repaid a certain portion of your loan
- You must have a clean repayment track record and there should be no overdue EMIs/ missed EMI payments
- You should also have adequate loan repayment capacity
- You should have a good CIBIL/credit score, as it points towards higher creditworthiness and a lower repayment burden
Minimal or no documentation is required to avail a top-up loan since you already have an existing personal loan (relationship) with the lender. Many lenders also offer pre-approved instant top up personal loan to their existing personal loan borrowers.
Q. What is the maximum top-up loan amount that I can avail?
Ans. The maximum top-up loan amount varies across lenders. However, the loan amount usually cannot exceed the overall loan amount eligibility of the personal loan borrower after factoring the outstanding loan amount of his existing personal loan or other existing loans.
Q. What is the maximum tenure for a top-up loan?
Ans. There is no specified tenure for a top-up loan. It depends on the borrower’s profile, repayment history, etc. Often, a top-up loan can be sanctioned for a longer tenure than the tenure remaining for the existing personal loan. However, the tenure of the top-up loan cannot be longer than the outstanding tenure of the original loan. Those wishing to get longer loan tenures can exercise personal loan balance transfer option.
Q. My bank does not offer a top-up loan. Can I apply for a top-up loan from another bank?
Ans. If your existing lender does not offer top-up personal loan or refuses to sanction you the top-up loan facility, then you can transfer your personal loan to another lender through personal loan balance transfer facility and avail top up loan along with it.
Q. Can I apply for a top-up loan if I have already availed three loans?
Ans. The approval of your top-up personal loan application would depend on the lender’s evaluation of your repayment capacity. The lender will refuse your application for top-up personal loan if it deems you to have inadequate loan repayment capacity.