Top loans are ideal if you require additional funds in the middle of your existing loan repayment plan. Here are some of its benefits.
In a top up loan, you can skip the KYC part that includes submission of ID proof and address proof. Your lender might ask your salary slip just to ensure your employment status. In case, you switched your job or received an increment or promotion, you have to provide the details and furnish necessary documents.
A top-up loan offers tax benefits under certain circumstances. For example, you may qualify for a tax rebate if you use funds for home renovation, construction, or business purposes. Make sure to discuss this with your CA as well as your lender to make the most of your top up loan.
You do not have to pay separate EMIs for your primary loan and the top-up loan. The lender provides consolidation benefits, allowing the combining of two separate EMIs into a single one. Consolidation improves loan management by removing the possibility of EMI skips. You can also opt for the auto-debit facility to never miss an EMI.
A personal loan is an unsecured financing product available for a maximum sum of Rs 5,00,000. Whether you're looking for a 3.5 Lakh Personal Loan or a smaller amount, these loans offer flexibility. Similar to top-up loans, you can use the funds for multiple purposes like a wedding, travelling, or during a medical emergency. If you're wondering how to get 1 Lakh loan immediately, a personal loan is one of the most convenient options, subject to eligibility and quick verification.
Also Read: 5 Brilliant Ways to Avail a Personal Loan with a Low Credit Score
A personal loan is approved or disbursed based on your profile. The lender reviews your income, credit report, debt-to-income ratio, and employer's credibility to decide on the loan amount.
You can get a low-interest loan if you work for a reputable company that hardly has any layoffs and never delays salary credit. Similarly, a debt-to-income ratio of less than 40 may qualify you for substantial funds. Simply put, if your credit profile is such that lenders believe the funds disbursed are not likely to default, your chances of receiving approval on favourable terms are very high.
Personal loans help you during difficult financial times. This loan product has some notable features.
You can get this loan for the maximum sum of Rs 5,00,000. However, the minimum and maximum amount varies from lender to lender and borrower to borrower. You must check your loan eligibility with a loan eligibility calculator before applying for a personal loan. It is especially useful when determining how much loan can I get on 15000 salary.
A personal loan is an unsecured loan, which means you do not have to pledge any assets in order to obtain the funds through this loan product. The lender requires you to have good credit and a steady income before approving your application. But if you do not meet the eligibility requirements, pledging your collateral can help you get your loan approved.
Repayment tenure directly impacts your finances. It determines your EMI and the total interest you must pay on the borrowed amount. A longer tenure typically increases the interest outlay while decreasing the EMI. When you choose a shorter tenure, the opposite occurs. As a result, to assist you in balancing EMI and interest factors, the lender provides an EMI calculator to determine what tenure is best for your budget.
Now that you understand the meaning and attributes of both of these loans, it is time to learn the difference between personal loans and top-up loans.
Parameters | Personal Loan | Top-up Loan |
Application Process | You may apply for this loan with any lender after a thorough evaluation. | Since it is additional funds over your existing loan, you can only apply with your current lender. |
Interest Rate | The interest rate is slightly higher. | Top-up loans are available at low-interest rates because you have demonstrated outstanding repayment behaviour on your primary loan. |
Tax Benefits | This loan has no tax advantages. | You can claim a tax advantage if you use the funds for specific purposes. |
Disbursement Time | Personal loans necessitate a completely new application and documentation, and the credit appraisal is based on several parameters, so disbursement can take a day or two. | Under a top-up loan, your documents are already in the lender's database. They only delve into your ongoing debt repayment behaviour to decide your eligibility. Hence, the disbursement is relatively quick. |
Also Read: Can A Personal Loan Help You Improve Your Credit Score?
Both personal and top-up loans provide flexibility when it comes to usage. They are ideal for dealing with medical emergencies, home renovations, paying for a child's education and taking care of other urgent expenses. The main difference between a top-up and a personal loan is the documentation process, eligibility criteria, and disbursal time. Above all, the former is only available if you have an ongoing loan.
Hero Fincorp offers a wide range of financial products including Personal Loans for personal needs, Business Loans to support business growth, Used Car Loans for purchasing pre-owned vehicles, Two-Wheeler Loans for bike financing, and Loan Against Property for leveraging real estate assets. We provide tailored solutions with quick processing, minimal paperwork, and flexible repayment options for smooth and convenient borrowing experience.