Is Top-Up Home Loan Better Than Gold or Personal Loan? - Home Loan Stories | Kotak Mahindra Bank
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17 MAY, 2021

Home loans are an easy way to finance your dream home. With a home loan, you can easily buy the house you want, while repaying the loan amount in easy installments. But, what if you need more funds over and above the home loan? Should you then opt for a personal loan or a top-up home loan?

This decision could be tricky and complicated. Here is a small guide to help you make an informed decision and choose between a top-up home loan, personal loan and gold loan.  

First, let us give you a quick overview about these loans.

Gold Loan

A gold loan is a secured loan where you can borrow funds from a lender by pledging gold articles as collateral. The loan value is equal to a certain percentage of the gold and it varies from lender to lender. Just like a loan against property, you can take back your gold articles when you repay the loan amount.

Top-up Loan

Top-up home loan is an additional loan over and above your home financing. It can be used for house renovation, repairs or for other purposes like education, business-related expenses, etc. It could be easy to avail a top-up loan if you have been consistent in EMI payments and have a good credit score. However, if you are unable to get it from your existing lender, you can opt for a home loan balance transfer from a lender who approves/ is likely to approve your top-up home loan.

Personal Loan

A personal loan is a collateral-free unsecured loan that can be used to cater to various financial needs. As compared to some other loans, usually, the interest rates of personal loans are higher.

Now that you have a fair idea about these three types of loans, go through the difference between all three of them below:



Top-up home loan

Personal loan

Gold loan

Interest rates

Home loan Top-up   interest rates start from 6.65%.

As it is unsecured, its interest rates are higher and start from 10.5%

It ranges from 10% to 17%


A Top-up loan is offered for longer tenures that can go up to 20 years.

Only 6 months to 5 years

Only 2-3 years

Tax benefits

You can avail tax benefits on the repayment of interest and principal on top up home loan

No tax benefits

No tax benefits

Processing time

Top- up home loan is usually sanctioned quickly as the lender already possesses all your requisite documents. e

You get the loan amount within 1-2 days

Most lenders provide gold loans within a few hours.


It is important to assess your needs and repayment capacity while choosing the kind of loan you want to avail. Considering the various benefits that a top-up loan has over other loans it could be a better option for you. Moreover, as the lender has all your documents and information already, taking a top-up loan could be easier, hassle free and quick.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.