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Things to Consider Before Availing a Top-up Personal Loan
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. 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 the Bank. The Bank, 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. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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Often there are times when your loan funds aren’t enough to fulfil your financial liabilities. However, you can opt for a top-up to your loan. Let’s learn more about it.
What is a Top-up Personal Loan?
A Top-up Loan is additional funds on your existing Personal Loan. For whatever reason you have taken a loan for home renovations, a dream vacation or an emergency, there is an option to opt for more at the same interest rate. With this loan, you can meet your financial goals with ease.
Top-up Personal Loan Benefits
Caters to your emergency needs
In case you are in the middle of a crisis and have a rolling personal loan in your Bank then you can do a top-up to the same loan. The best part is funds are disbursed much faster than other loans.
Flexible Repayment options
With a Top-up Personal Loan, you can adjust your loan tenures and EMI amounts. You can calculate the same using our online personal loan EMI calculator. For example, your original tenure is for 2 years and with a top-up – you can keep the same tenure or adjust it according to your preference.
Attractive interest rates
The interest rate for this loan remains the same as your original loan and you don’t have to pay a large amount of extra interest.
Debt consolidation
It is a good way to consolidate multiple personal loans and pay the outstanding amount of your credit cards in a single loan. You don’t have to pay different EMIs at different interest rates in this case.
Factors to consider before opting for Top-up Personal Loan
How to apply for a Top-up Personal Loan?
Apply for a Top-up Personal Loan with Kotak Mahindra Bank in a few simple steps, here’s how:
What are the Eligibility Criteria?
While you are applying for a Top-up Personal Loan with Kotak Mahindra Bank, please take care of the following criteria:
After taking the original loan, there is a chance that your financial situation has changed, and it is not the same as before. Hence, this becomes an important factor to be eligible for the loan.
Your history of timely repayments of EMIs works in your favour when you apply.
Less number of bounced cheques is a good sign as it indicates that you have a constant flow of funds for repayment.
Lenders check your loan portfolio and history to ensure you can pay back your debts on time.
A high credit score (750-900) improves your chances of getting the loan.
Tax Implications on Top-up Personal Loan
Home Renovation Or Construction
Under Section 24(b) of the Income Tax Act, 1961, you can claim a tax deduction on interest paid on a top-up loan if you use it for home renovation or construction.
Maximum deduction allowed:
If you use the top-up loan amount for construction or purchasing a house, you can claim the deductions under Sections 24(b) and 80C.
For Other Cases
Conclusion
So, now that you know the complete picture of a Top-up Personal Loan, you can decide if it is the best option for you. It is crucial to plan and analyse your financial health before you opt for this to lead a stress–free life.
T&C apply. Credit at the sole discretion of Kotak Mahindra Bank Ltd. and subject to guidelines issued by RBI from time to time. Bank may engage the services of marketing agents for the purpose of sourcing loan assets.
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