Home Top up Loan vs. Personal Loan vs. Gold Loan: which one to choose
Are you in need of
money and confused to choose between Home Top up Loan vs. Personal Loan vs.
Gold Loan. If you have recently completed your home construction or purchased a
new home out of home loan and now you are out of fund and need urgent money. You
have many options to choose like home top up loan or personal loan or gold loan
or PF withdrawal or loan against your mutual fund or borrow from friends or
relatives and you will end up with having major confusion in choosing Home Top up Loan vs. Personal Loan vs. Gold Loan. Home top up is better alternative of sudden need of money.
Generally home top
up loan is given for extension of home, renovation of home, furnishing of home,
marriage, education or something else.
Home Top up Loan vs. Personal Loan vs. Gold Loan: which one to choose
Home top up is
available at lower rate of interest and higher tenor compare to personal loan
and gold loan. Home top up is the cheapest solution for need of money. Tax
benefit is also available under section 24B in home top up loan. Home top up
loans are offered at par with home loan in terms of interest rates. Some financial
institution offer higher amount if you agree for extension of mortgage.
Who is eligible for home top up loan?
Customers who have
availed housing loan and completed construction of home, valid mortgage formality
have been completed, possession of home has been taken, having good track
record of existing home loan, having good CIBIL score are eligible for home top
up loan.
LTV (Loan to value)
ratio is important parameters for considering amount of eligibility for home
top up loan. New home loan customers are also eligible for top up home
loans. An interested borrower needs to have a good credit history and
should submit his know your customer (KYC) and income documents in order to get
their top-up loan processed by a financial institution.
Tax benefit under section 24B for home top up loan
Tax benefits are
available for interest portion paid on home top up loan if home top up is used
for acquisition of property, repair, and renovation of property. Tax benefits
are available for home top up to ceiling available for home loan. The maximum
amount that can be claimed for tax deduction is Rs 2 lacs per annum for
interest repayment. This is inclusive of the interest on both the original home
loan and the top-up home loan.
Drawbacks of home top up
Major disadvantage
of home top up is lower amount due to limitation of LTV which bound loan
amount, Higher processing time due to extension of mortgage in some cases, obtaining
fresh valuation of property, obtaining fresh TCR (Title clearance Report). Some
financial institution has fixed cap on loan amount. People are unaware about
tax benefit available under section 24B for home top up loan.
if you
have time of 10-15 days to get a loan, home top up is no doubt better option
for you. Personal loan and gold loan are no doubt quick but not beneficial in
terms of tenor, interest rate and tax benefits.
0 comments: