Need a personal loan top-up? Consider your options carefully

Personal loans are a great way to access extra funds for various needs from buying a luxury item  to a home renovation. But many a time, despite preparing for these expenses, emergencies arise where you need to arrange for funds almost immediately and have to pay for the expenses upfront. They do catch you off-guard, don’t they? No worries, a personal loan top-up can come to your rescue in situations like these. 

What is a personal loan top-up?
 

So, what is a personal loan top-up? Its an additional loan amount given by the bank to the borrower on top of the originally disbursed loan amount. If you have applied for a personal loan and later realise you need more funds, you can opt for a personal loan top-up to arrange for additional funds. A top-up is easy to apply for since the bank already has all your documents you submitted while applying for the existing personal loan. This makes opting for a top-up easier than applying for a new loan altogether where you would have to repeat the entire loan process all over again.

Who is eligible?
 

The only criterion to consider here is that you must have already taken a loan. In which case, you are free to apply for a personal top-up loan from your lender. The good news is that the funds are free to be used at your absolute discretion, just like a personal loan. If you are aware now go and get an instant personal loan.

How can I get the loan?
 

A personal loan is given on the guarantee of the individual and of their repayment history. This is doubly so for a top-up loan. You must have a very good (read perfect) repayment history and be prepared for the lender to run a few verification checks. Also, expect to answer questions as to why you need a top-up. 

Why all these questions?
 

It all boils down to this. The lender will ask you why you wish to avail a top-up loan, and you must give a convincing answer. Not to say your reasons are not genuine, but it pays to have a ready explanation why you require it so urgently. It could be anything from meeting an unexpected  expense or a new need that arises in your life . Either way, the important thing is that you should be honest with your reasons and answer accordingly. Lenders have a nose for sniffing out the truth. 

What to expect after you have availed a personal top-up loan?
 

This is as important as availing the loan itself. Here's what you can expect:

• It can cost you more: A personal top-up loan will cost you more by way of interest than your prior loan (they will be calculated separately). Expect to pay 1%-2% extra.
• The loan amount: You can take a personal top-up loan up to 70%-80% of the initial loan amount. 
• Tax benefits: Yes, that's right. But this holds good only as long as you use the top-up loan to buy a house or to undertake home renovations; still a good deal all in all. 

FIRSTmoney: A better alternative to a personal loan top-up
 

There might be chances that you opt for a personal loan top-up due to misjudged expense planning or any emergency that arises. Instead of answering all sorts of questions by lenders, apply for a smarter personal loan like   FIRSTmoney from IDFC FIRST Bank. Here’s why:

1.  Credit Line: FIRSTmoney offers a sanctioned credit line of up to 10 Lakhs for a period of 5 years subject to clean repayment history. This gives you the freedom from getting top ups every time you need funds. It’s a no-questions-asked withdrawal facility from your sanctioned limit.

2.  Zero foreclosure charges: With zero foreclosure charges, this loan is one of the most customer-friendly personal loan options which allows you to repay your loan whenever you have the funds.

3.  Withdraw what you need: With FIRSTmoney, you can withdraw funds as low as ₹5000 as many times you want up to your approved limit without any limit on the number of withdrawals.

4.  Pay EMI only on the utilised amount: Unlike credit line facilities, you pay EMIs only on the amount you withdraw and no maintenance charges on the sanctioned amount. This makes FIRSTmoney a superior alternative when it comes to arranging funds for your expenses.

5.  Easy digital application process: Thanks to FIRSTmoney, you can skip the lengthy processes of having to apply for a personal loan and then for a top-up. You can simply withdraw the required funds from your FIRSTmoney loan, which can be applied for with just your PAN card and a few details. This makes applying for a FIRSTmoney loan much more efficient compared to any instant personal loan or a top-up loan.

6.  Instant approval: No more waiting. You can get instant approvals of amounts up to ₹10 lakhs depending on your creditworthiness through a completely digital application. To apply for a FIRSTmoney loan, all you need is a stable income, a physical PAN card during VKYC, and a credit score of 750 and above.     

Conclusion
 

A personal loan top-up can be a helpful tool to maximise your personal loan. But it’s important to evaluate your situation carefully and use it wisely. FIRSTmoney can be a more convenient and a beneficial tool if you are considering a personal loan top-up. With advantages such a zero foreclosure charges, ability to withdraw only what you need and EMIs limited to the utilised amount, it offers considerable advantages over a top-up loan. 

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.