Like everything else in life, even your home needs a spruce up every once in a while. Thankfully, all the leading commercial banks of the nation offer loans in a bid to help you meet this financial need effortlessly. There are two distinct loans that you can choose from– Home Improvement Loan and Top-Up Loan. A Home Improvement Loan is a loan that is offered primarily to extend financial assistance to people who wish to renovate or extend their homes by adding a room or even a floor.
A Top Up Loan can be defined as the additional credit that your bank or NBFC offers you over and above existing Home Loan. As is the case with a Home Improvement Loan, a Top Up Loan is also offered to renovate your home.
Now that you know about Home Improvement Loan as well as Top Up Loan, it is time to decide which one best suits your purpose. If you’re seeking a loan only to renovate or extend your home, a Home Improvement Loan can prove to be your pick.
Some of the salient features of a Top-Up Loan are listed hereunder:
- The rate of interest of a Top-Up Loan is fairly low but can be up to 1-2% higher than that of a Home Loan
- The repayment tenure of a Top-Up Loan is the same as the remaining tenure of your existing Home Loan.
- The loan amount, in this case, is decided upon by the remainder of your borrowing capacity over and above of the bulk exhausted by your ongoing Home Loan. In any case, the loan amount does not exceed 80% of the value of the property