Thursday, June 14, 2018

All you need to know about top-up personal loans

time for personal loan
Thinking of getting a top-up on your existing personal loan? Most lenders provide applicants with top-up personal loan offers, usually after completion of a particular period in the tenure. Depending on your repayment history, you can get a much-reduced interest rate on your top-up personal loan. Besides, you can also alter your tenure when you opt for a top-up.

Top-up personal loans can help a great deal if you need urgent access to funds. While a normal loan usually takes about 6-8 business days to reach your bank account, a top-up on your existing personal loan will take just about 24-48 hours to get disbursed. So, if you’re facing an emergency, a top-up loan is easily your best bet.

Things to know before applying for a loan top-up

Before you get your top up personal loan offer from your lender, here are certain things that you should know.

Having a Good Repayment History

A good repayment history with your current lender is crucial to get your top-up loan approved. The importance of this point can of course, not be understated. Perhaps the most dominant parameter that influences the approval/rejection of your top-up loan application is your repayment history, for this is the only way the lender can assess your ability to repay. So, if you wish to apply for a top-up, make doubly sure that your repayment history with your lender is neat.

It sure does look like it when you apply for a top-up, but not quite it yet.

Your Credit Score

Your credit score (a score out of 900 that indicates your credit worthiness) should also be at an acceptable level if you wish to get a top-up on your existing loan. Note that your repayment history is a crucial parameter that impacts your credit score. There are of course other parameters as well – your monthly debt to income ratio, your Credit Utilization Ratio and the number of debt sources in your name. While such is the case, in case you have a long relationship history with the lender and your repayment history has been impressive with just a handful of instances of overdue payments (note that there should be no instances of defaults), you can get your top-up personal loan approved even if your credit score has taken a hit.

There isn’t an ounce of doubt whether it is possible to avail a personal loan or not. There is no other objective to getting a top-up than while fighting an emergency.


Most lenders allowing you to apply for top-up loans require you to be actively employed with a stable source of monthly income coming your way. This of course makes sense, as lenders need to know that you can make monthly repayments towards your loan. To determine this, lenders will ask for your most recent income documents – it doesn’t matter even if you’ve switched jobs and just started work with a new employer.

Altering tenures

Lenders allow applicants to alter tenures when they provide them with personal loan offers on top of existing loans. As an applicant, you can choose a tenure based on your repayment capacity. Longer tenures attract lower repayments while shorter tenures have comparatively higher repayments. However, opting for a short tenure would mean lesser payment towards interest, while longer tenures attract higher interest payments.

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