Home loans or home finance are loans secured to buy a property. These low-interest-rate loans have a high LTV ratio of up to 80%. The loan amount one is eligible for is decided after taking into consideration several different factors, including the income, CIBIL score, and repayment capacity of the loan borrower. High income automatically grants one high repayment capacity, helping borrowers secure higher sanctions and a lower interest rate. Home loans are repaid through EMIs, each of which is divided to cover the principal and interest components of the loan. 

Homeownership comes with its responsibilities. There are many additional charges involved. For instance, most individuals trying to secure a home loan do not consider the stamp duty and registration charges they must pay to legalize the property purchase. Similarly, home loan borrowers also do not take into consideration the cost of moving in or the interior costs. Home loan borrowers in need of additional funds can benefit from a home loan top up. 

What is a Home Loan Top-Up? 

Existing home loan borrowers can secure an additional loan over and above their home loan to meet their various housing-related expenses. This loan is known as a home loan top up. Home loan top-ups offer several benefits.  Below we discuss the features and benefits of these loans. 

Home Loan Top-Up: Features and Benefits 

1. Sizeable Loan Amount: Under the home loan top-up category, financial institutions offer up to Rs.1 Crore or higher, provided the loan applicant meets all the qualifying criteria and their income allows them to accommodate the new, increased EMI. 
2. Competitive Interest Rates: Home loan top-up interest rates tend to be lower than personal loans, thereby ensuring easy-to-pay EMIs and easy repayment. 
3. Speedy Approval and Disbursal: Yet another advantage associated with top-up loans is that approval and disbursal do not take much time for these loans as the lender already has all the documents they need to process the loan. Further, the lender also knows enough about the loan applicant’s repayment capacity to judge their ability to afford and repay an additional loan. Therefore, arriving at a decision regarding top-up loans is easy. 

Home Loan Top Ups: Eligibility 

The eligibility criteria for home loan top-ups vary from lender to lender. However, in general, these are the eligibility requirements that financial institutions require borrowers to meet to be considered eligible for a home loan top-up. 

1. These loans are sanctioned to existing home loan borrowers. So, you must have a home loan account with the lender to whom you are applying. 
2. You must have cleared at least the last six months’ home loan EMIs. 
3. Some lenders sanction home loan top-ups only if the borrower has not had more than a single missed EMI over the last year. Further, the applicant must have cleared the missed EMI before the next due date. 
4. You must have a CIBIL score of 750. Having such a CIBIL score establishes your repayment capacity and ability to repay the loan comfortably.

If you are planning to opt for housing finance or a home loan top-up and do not have the required CIBIL score, do not worry. Here are a few simple things you can do to improve CIBIL score in no time.

Simple Tips to Improve Your CIBIL Score to Secure Housing Finance or a Home Loan Top-Up 

1. Your repayment history governs your CIBIL score. Having a clean repayment history is crucial to build a high CIBIL score. Make it a habit to pay all your loan EMIs and credit card bills before the due date.  
2. Not being excessively dependent on credit will also help you maintain a high credit score. To maintain a CIBIL score above 750, make sure to have your credit utilization ratio below 30%. Also, do not apply for too many loans simultaneously. Make sure to spread out the applications over at least a few months. 
3. Do not close old credit cards and loan accounts for the older your credit history, the better will be your CIBIL score. 
4. Lastly, always have a mix of both secured and unsecured loans. This proves your ability to handle and repay all types of debt.

Home loan top-ups are an excellent choice for house-related expenses. However, one must avail of these loans when one is financially ready for the commitment.