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Top-up Loans vs Fresh Loans

Should you get a Top-up Loan or a Fresh Loan? is the question many are asking today, in this Finance Buddha PPT we have explained the difference between Top-up Loan & Fresh Loan.<br><br>https://financebuddha.com/blog/should-you-get-a-top-up-loan-or-a-fresh-loan/

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Top-up Loans vs Fresh Loans

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  1. Top-up LoanOr Fresh Loan https://financebuddha.com/blog/should-you-get-a-top-up-loan-or-a-fresh-loan/

  2. Top-Up Loan • The benefits include – • Immediate funding  • No need to go through all the processes  • Low- interest. • Reliable backup as you already have an existing relation with the lender A top-up loan is a facility provided by the bank to its existing loan account holders. This facility helps borrowers to get additional funding over and above their existing loans. However, a top-up loan facility is available only for a home loan or Personal Loan.  https://financebuddha.com/blog/should-you-get-a-top-up-loan-or-a-fresh-loan/

  3. Let’s understand this more clearly with the calculation by comparing both the options. The interest rate for existing home loan – 8.5 % The interest rate for a new personal loan will be – 10.35% EMI for home loan – 56,366 monthly EMI for the new personal loan – 10,210 If they take a top-up loan rather than a new personal loan he will get it approved at 7.5% as the home loan rates have reduced now.  So, it’s for sure that Suresh will be able to save more if he avails a top-up home loan.  The same is true with personal loan top-ups. If you are already servicing a personal loan and feel the need to borrow again. Then, in that case, you have two options – getting a top-up personal loan or  availing a fresh personal loan. https://financebuddha.com/blog/should-you-get-a-top-up-loan-or-a-fresh-loan/

  4. Features of a top-up loan Important Note –Same as any other loan, a top-up loan also has processing fee charges, cheque-bounce fee and other fees apply. So, it’s very important to come to any conclusion once you have done the proper calculation and research. A Top-Up Loan also comes with tax benefits under section 80C and Section 24 of the Income Tax Act, but to avail this it’s important to utilize borrowed money for home reconstruction/renovation or for education purposes. You may need to provide proof in order to avail of these tax benefits. Simplified documentation process Easy and faster approval low rate of interest Lower EMIs Hassle-free process.  Availability of longer tenures https://financebuddha.com/blog/should-you-get-a-top-up-loan-or-a-fresh-loan/

  5. Thank You

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