Personal loans are one of the preferred financing options, given their utility to fund financial emergencies. The CARE Rating report shows that the market of personal loans witnessed a growth of 11.2% in July 2021. This is higher by 220 basis points compared to July 2020.
However, financial emergencies are unforeseen, and existing personal loans may not be sufficient to meet additional expenses. In this case, a top-up personal loan is a viable option.
This facility allows eligible applicants to borrow funds above their existing personal loan to cover additional financial requirements.
How can you apply for a top-up personal loan?
Follow the step-wise guide mentioned below to apply for a personal loan online:
Step 1: Visit the official website of your preferred financial institution. Enter your personal, employment, and financial details in the online application form.
Step 2: Select the loan amount and repayment tenor. Submit all the relevant documents to a representative, who will contact you once the application is submitted.
After verification, receive the funds within the least possible time.
What are the eligibility criteria to apply for a top-up personal loan?
Applicants must meet the following eligibility parameters to apply for this loan:
- Being an unsecured credit option, the risk of default in repayment is also higher. Hence, maintaining disciplined repayment behaviorand a healthy credit score is essential to get the loan approval without any hassle.
- Applicants must have an existing personal loan to qualify for this credit.
- Besides meeting the eligibility parameter, keep the following documents ready to avoid inconvenience while applying for this loan:
- KYC documents, such as PAN card, Aadhaar card, etc.
- Salary slips of last two months
- Last three months’ bank statement
- Applicant’s employee ID
What are the five benefits of a top-up personal loan?
Take a look at the following benefits of a top-up personal loan:
1. Lower the burden of a loan
Eligible individuals can apply for a top-up on their existing personal loan to pay off additional dues. Merging the loans is an ideal option as it reduces the interest payables towards this loan.
2. Fast processing
An existing relationship with the lender helps one’s loan application to process faster. This ensures that applicants can receive funds without any unnecessary delay. Besides, selected lenders offer a minimal documentation process, which streamlines the loan application.
Leading NBFCs like Bajaj Finserv offer a substantial top-loan amount against meeting simple eligibility and submitting a few documents, such as bank statements, salary slips, etc.
This NBFC also provides pre-approved offers on personal loans, which simplify the application process. Willing individuals can check their pre-approved offers by submitting their name and contact number.
3. Lower interest payment
The applicable interest rates are nominal compared to other credit options. Selected financers also offer a Flexi loan facility.
Flexi loans are revolutionizing lending in India as it allows one to withdraw funds and pre-pay them without paying any additional charges. The interest rate is applicable on the amount withdrawn. It also allows a borrower to pay interest for the initial part of the repayment tenor, reducing the burden of monthly installments.
Besides, individuals can use a personal loan interest rate available online, to evaluate the total interest outgo. These help individuals plan their monthly financial liabilities and repay the dues with ease.
4. No collateral required
Borrowers do not need to pledge collateral to secure funds in a personal top-up loan.
5. Longer tenor
The repayment tenor of a personal top-up loan is longer. It depends on one’s repayment capacity, borrowed loan amount, and outstanding balance.
6. No end-use restriction
A top-up personal loan is free from end-use restrictions. Borrowers can use this fund to equipment finance or for any other requirement, be it renovating their homes or paying for their higher education.
A top-up personal loan is an ideal financial option to address financial emergencies without any hassle. However, borrowers must keep their documents ready while applying for a smooth application process.