How to check your Eligibility for a Top Up Loan?

A “Top Up” or an extra amount added to an existing loan has become a convenient option for customers needing additional funds: A Top Up can be applied to an existing Personal Loan, Home Loan, or a Loan against property.

A Top Up loan is advantageous to both the lender and the applicant, as the lender can verify the repayment track and is confident of timely repayment. The borrower is satisfied with the services of the finance provider and would like to avail of the services repeatedly.

Customers requiring funds in an emergency can apply for a personal loan Top Up online from the parent Bank, such as the HDFC Bank Top Up personal loan, the ICICI Bank Top Up personal loan, and the AXIS Bank Top Up personal loan.

They can request the funds needed, but the facilities of a Top-up loan cannot be taken for granted, and the existing loan does not ensure eligibility for a Top-up. The applicant’s eligibility for a top-up personal loan will be reassessed during processing.

What are the eligibility requirements for a personal loan top-up?

The net salary: The minimum salary needed to apply for a personal loan top-up is 35k. The applicant’s current salary must remain the same or increase since the existing loan was issued. If income decreases, financials will be re-evaluated to determine if the applicant can afford the additional instalment with the lower income and other expenses. However, if the salary has increased, the extra amount will likely be approved with ease.

Employment status: The applicant’s company must be listed among the HDFC Bank-approved companies. If the applicant has changed jobs when applying for a Top-Up, the current employer should be included in the Bank’s approved companies. If the current employer is in category A or B, the eligibility calculation will increase; if the company is in category C, it will decrease. If the company is not approved or has been delisted, your Top-up request may be denied.

Repayment track of the existing loan: A primary requirement to avail of a Top Up facility is to pay instalments on the existing loan on time. A customer making timely payments on the existing personal loan with HDFC Bank will have a better chance of approval for an additional amount; however, if there is a consistent delay or default in repayment, a top-up request is denied.

CIBIL Score: As per the norms for a new loan, when you apply for a top-up loan, a request will be made to CIBIL for an updated record.

The applicant’s CIBIL score should be above the required benchmark. The repayment record of credit taken in the form of loans or credit cards from other lenders is reviewed to confirm that the applicant is paying all dues on time.

Suppose there are delays or defaults in repaying credit owed to other banks, if credit card dues are unpaid, or if the applicant has recently borrowed from different lenders; it will influence the bank’s decision to approve a top-up loan.

Vintage of Loans: Most leading Banks, such as ICICI Bank and HDFC Bank, will issue funds as a Top-up to a personal loan three to six months after the primary loan. This interval is used to assess the applicant’s repayment discipline and ensure that the EMI are paid on time.

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.

Suppose an alternate lender has recently granted the applicant an additional personal loan or has applied to other Banks for a personal loan. In that case, the lender will check the applicant’s eligibility criteria and the CIBIL record for the enquiry count before issuing a top-up loan. ICICI Bank will not process a request for a top-up loan if more than four enquiries are reflected in the CIBIL record.

Financial eligibility: When calculating the loan amount that can be issued as a top-up, the Bank will consider the following:

The net income or salary is credited regularly to the applicant’s account; there should be no gaps or breaks in the salary deposits that would suggest the applicant has been unemployed for an extended period.
The credit obligations include the EMI on the current loans and the outstanding credit card dues. The outstanding principal balance of the existing personal loan is included in the commitments.
The percentage of salary that the applicant is eligible to pay as an EMI depends on the company category and the applicant’s salary bracket. For example, if the applicant’s income is above ₹75k per month, the applicant can allocate a greater portion of the revenue to credit payments than an applicant with a ₹50k salary.

In conclusion, the process for a Top Up is similar to that for a new account; complete documentation must be submitted to process the application, and all designated steps will be followed. A Top Up loan’s eligibility depends on the applicant’s current circumstances and creditworthiness. Check your eligibility criteria with us to ensure a seamless process for your Top-Up loan.

FAQ

Can an applicant apply for a top-up to a mortgage loan?

Applicants may request additional funds as a supplement to a home loan or a loan against property, depending on the lender's policy.
A top-up to a mortgage loan is issued after the successful repayment of 12 instalments.
A consistent income and a CIBIL score of 700+ are required to apply for Top-Up funds.
The property's current value and the original loan amount are considered, with 60% to 80% of the property's value minus the outstanding balance.

Did Banks issue a top-up loan during the COVID period?

Unexpected events, such as the recent lockdown due to COVID, created uncertainty. Those were exceptional times, but Banks maintained the policy of timely EMI repayment, and affected industries were classified as negative. Financiers were hesitant to extend additional credit to specific sectors, such as travel and hospitality, which were heavily impacted during the turbulent period.

Why is the top-up loan considered a popular option by applicants?

Customers tend to seek funds from trusted sources with familiar terms and conditions. Lenders also value the existing relationship and issue funds promptly with favorable terms.

Can self-employed applicants apply for a personal loan top-up?

Self-employed applicants are eligible to apply for a top-up to the existing personal loan as per the following terms:

The business should be running smoothly, with increased turnover and profits as compared to the previous year.
The CIBIL score of the applicant and company must be above the required benchmark of 720 points.
The repayment schedule of the existing loan should be timely, with EMI paid over 12 months.
The applicant must not have obtained any recent credit in the form of an unsecured or secured loan.