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Top-up Personal Loans

Top-up Personal Loans

Last Updated : Nov. 9, 2022, 4:26 p.m.

The fact with needs is that they keep arising over time, you can never get away from the same. So even if you get a personal loan to meet your respective needs, you can’t say all is done! An odd event could take place anytime and you will require more money. This is where a top-up personal loan can help you. This loan is granted based on the existing personal loan . The benefit of a top-up loan is the minimal documentation involved in it. But how will it work and what will be the interest rate on the same? You should know all that to make the right decision.

How Will a Top-up Personal Loan Work Out?

There are two ways by which this loan works out. Either the top-up loan is added to the existing personal loan outstanding balance or they are treated as a separate loan. When the rates of both are the same, they get added. And you get a consolidated EMI to pay every month. But when the rates on both differ, lenders treat them separately. But what about the tenure? How much time will you get to pay the top-up loan? In case both your existing and top-up loan amounts are linked, the maximum tenure for the latter will be the time left for the former. So, if the existing personal loan has 3 years left, the top-up loan tenure can’t exceed 3 years.

Top-up Personal Loan Interest Rates April 2024

Although the top-up loan rates and normal personal loan rates match, you could find a lender or two offering different rates in both. So, a look at the top-up loan rates of different lenders is vital. The table below shows the same.

Lenders Interest Rates (In Per Annum)
State Bank of India (SBI) 11%
HDFC Bank Anywhere from 10.75% - 14.50%
ICICI Bank Starts from 11.25%
IndusInd Bank Anywhere from 10.25% - 26.00%
Kotak Mahindra Bank Starts from 10.99%
YES BANK Anywhere from 11.05% - 20.25%
IDFC First Bank Anywhere from 10.50% - 25%

Benefits of Top-up Personal Loans

Minimal Documentation – The approval of a top-up loan requires minimal documentation. The identity and residence proofs are already there with the existing lender. But it is the income which the lender will keep an eye on. As the top-up loan amount increases your EMI obligations, the lender would like to be convinced of your ability to pay the same. And, therefore, the lender will ask for the current income proofs. If your current earning is such that you can pay the consolidated or separate EMI, whichever you get or choose, with ease, the top-up loan will get approved without any problem.

Collateral-free Disbursal – Top-up loans will be disbursed free of collateral. With no collateral, goes out the obligation to arrange the same to get the loan.

Quick Loan Processing & Disbursal – The loan can be processed quickly and the disbursal could be instant to a couple of days from applying.

Will the Lender Check Your Credit Report Before Approving the Top-up Loan?

Yes, it will. The moment you apply for the same the lender will pull your credit report and check the repayment track of the existing personal loan. If the credit score and repayment track are found to be good, the lender will not hesitate to approve the top-up loan application.

Is a Top-up Personal Loan Allowed When Doing the Balance Transfer?

To get the benefit of lower rates, one switches the personal loan from the existing lender to the new one. But you’ll be surprised to know that a top-up on the balance transfer amount can also be given. How much top-up does the lender approve will depend on your existing income and repayment potential.

How to Apply for Top-up Personal Loans?

You can apply for the top-up personal loan online at the official website of the lender. All you need is to find the application form, mention your personal and professional details before submitting the same. The lender will check the application details and the repayment track of your existing personal loan. If the details are true and the repayment track is smooth, the lender will approve the application and disburse it to your bank account. If you’re not comfortable applying online, you can visit the nearest branch and ask for the application form. Mention the details correctly and hand it over to the official to process the application. If all goes well, the offline application will see the approval quickly. If you’re applying at the existing lender, you will need to provide income documents and bank statements.

If you are doing it via a balance transfer, you will need to submit the identity (PAN Card/Passport/Voter ID/Driving License) and residence proofs (Passport/Voter ID/Driving License/Aadhaar Card) along with income documents and bank statements.

You can also apply for top-up personal loans at Wishfin , a neutral financial marketplace offering you unbiased advice on lending and investment products. It has tie-ups with numerous banks and financial institutions for personal loans and other financial products. The process to apply for the top-up loan is elaborated below.

  • Fill the details asked in the application form and submit the same
  • Wishfin representatives will soon contact you and take your application forward to the lender
  • The lender will check the application details and your loan track and approve if it is convinced
  • Soon, you will get the disbursal in your bank account

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