As customers find it tough to cope up with high interest rates of home loans, banks and financial institutions provide top up loans which are a combination of personal loans minus the high interest rates. You can use the top up loan to fund business related, personal , educational needs, repayment of personal loans, repayment of outstanding credit card bills etc. A top up loan is cheaper than a personal loan.
Top up loans are offered to borrowers against the mortgage of the existing house. A bank usually takes into consideration a 12 month repayment track record of the customer in consideration of a top-up loan. The other factors are age, income, spouse’s income, number od dependants, educational qualification, assets, liabilities and job stability. As the top-up loan is based on the outstanding loan amount and the current value of the mortgaged property, there are two scenarios in which the applicant is eligible for a higher top-up loan. The first in when the market value of the mortgaged property rises. Secondly, when the customer repays the the homeloan, the outstanding home amount falls. This increases the eligibility for the top-up loan.
Monday, March 23, 2009
Top-up loans
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