Walking with a population of 136 crore Indians with contrasting needs and demands means innovation must be at its finest! To date, traditional banks have taken care of the needs but with Fintech joining hands, services that place customer centricity in the high-importance grid have grown manifolds. The financial world has crossed the road from the basics to everything digital and consumer-oriented.
Long ago banks understood the need for top-up loans to cater to the unforeseen extra needs individuals get caught up in and with Fintech joining forces, the service was propelled in the market with twice the ease and speed.
As a reader, if you’re wondering about the positives of a top-up loan instead of availing of a new one from a different bank, here are your reasons to consider the former-
- Relaxed Eligibility Criteria
As the name suggests, top-up loans are applicable when an individual or a business has already availed of a loan from the same financial institute. Therefore, the formalities, procedures and eligibility criteria become less tedious and more smooth for a top-up loan as the financial institution already has the KYC. However, it is essential that you have a strong repayment history on your existing loan and you have maintained a strong credit score.
- Favorable Interest Rates with Low Processing Fees
In most cases, the interest rate on top-up loans is almost the same as your existing loan and therefore, availing of a top-up is a wiser decision than availing of a new loan. Given that the request acceptance TAT is much lower in top-ups alongside low processing fees, favorable interest rates coupled with quick disbursals are a respite for you!
- Unrestricted Fund Utilization
Top-up loans are more flexible in terms of their utilization and do not restrict the purpose of fund consumption. One can use the funds for business objectives or personal grounds.
- Flexible Repayment Option
Just like your needs, your tenure can vary too in top-up loans. It is unnecessary one must match the tenure to the existing loan. If required, one can increase or decrease the tenure according to their paying capability. Additionally, loans like home loans offer tax benefits to individuals which can be used to their benefit if the tenure is extended. However, it is advisable to thoroughly go through the terms and conditions to understand one’s liberties toward tax deductions.
- Source of Instant Funds
The trump card of top-up loans is its attribute of instant funds. One may require instant funds for professional or personal reasons and top-ups offer that relief. With quick disbursals, top-ups are increasingly getting popular in the market.
Making informed decisions is wise but first being financially literate is cardinal to making any financial decision. Whether one decides to take a first-time loan or a top-up, it is important to know and acknowledge the usage, amount, repayment capability and most importantly, choose a borrower-friendly financial institute before marking oneself in the borrower group.
