How To Check Your Eligibility For a Top Up Loan?
February 1, 2023

A “Top Up” or an extra amount added to an existing loan has become a convenient option: a customer mindset is to get funds quickly from a known source with familiar terms and conditions.

A Top Up loan is advantageous to the lender and the applicant, as the lender is confident of the repayment and the borrower is satisfied with the services of the finance provider and will like to avail services repeatedly.

A Top Up Can Be Applied to a Personal Loan, Home Loan, and a Loan Against Property.

The facilities of a Top-up loan cannot be taken for granted, and the existing loan does no ten sure eligibility for a Top Up.

As the process for a Top Up is similar to that of a new all the designated steps will be followed. Complete documentation is to be submitted to process the same. Eligibility for a Top-up Loan is considered as per the following factors:

Net Salary of The Applicant:

The applicant’s current salary must be the same or increased. Suppose there is a dip in the pay, the financials will be re-evaluated to determine if the applicant can afford to pay the extra installment with the reduced income and other expenditures.

If the applicant has a pay increase, the EMI capacity will be calculated per the current salary drawn, and the Top Up amount is easily granted.

The Current Company Category:

If the applicant has changed jobs when applying for a Top Up, the present employer should rank in the approved company list of the Bank if the company has been downgraded or does not feature in the company category list, the request will be viewed as per the profile of the present company.

If the employer now occupies a premier spot, the applicant can be suitable for funds and the required amount.

Repayment Track of The Existing Loan:

A primary requirement to avail of a Top Up facility is that the installment of all loans and credit card bills are paid as per schedule.

A customer making timely payments for the current loan is of value to the Bank and will be readily given further credit when required as a Top- Up Loan. In contrast, the lender can be apprehensive about providing an additional amount to a client unable to manage credit taken.

CIBIL Score: As per the norms for a new loan, a request will be made to CIBIL for an updated record. The CIBIL score of the applicant must be viewed above the required benchmark; the repayment record of credit taken in the form of loans or credit cards from other lenders is also assessed.

The total credit usage of all the existing EMI and credit card dues must be paid timely. Therefore, all EMI is to be paid monthly, and credit card dues will be added to calculate the eligibility for a Top-Up.

The applicant must have enough income to pay the current due and afford the Top Up Loan.

Vintage of Loans:

Any recent credit taken will increase the liabilities of the applicant. Therefore, if the applicant has been granted credit recently, the lender will prefer a time interval before giving an additional amount as a Top -Up loan.

A Personal Loan Top Up is allowed by most Banks 3 months after the existing loan has been granted. Eligibility for a mortgage Top Up is calculated based on the current value of the property and the number of installments paid.

In exceptional circumstances, a Top Up Loan is awarded soon after the parent loan if the applicant’s income exceeds the debt ratio by an excess margin or the value of the property and the applicant’s income is more than the loan amount granted initially.

Financial Eligibility:

The primary factor for calculating eligibility for a Top Up Loan is the applicant’s current income, which should be steady. With the monthly incoming, the mandatory expenses, obligations installment due, and credit card spending should be easily affordable.

The employment continuity should not be broken in the recent past, and if the applicant is self-employed, the business should be running smoothly with increased turnover and profits.

To sum up, the eligibility for a Top Up Loan will be calculated per the applicant’s current situation and creditworthiness unexpected events like the recent lockdown effect due to COVID created uncertainty.

Faced with the loss of business, some industries, such as travel and hospitality, were severely affected Financers were apprehensive about offering further credit during the tumultuous period.

Those were exceptional times but keeping a safety margin and planning finances well in advance is the mantra to receive a Top -Up Loan when required.

Check your eligibility criteria with us to ensure a seamless process for your Top-Up Loan.


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