How to Apply for a Top Up Loan?
Apr 14,2021 Borrowing, OMLp2p Loans, Loan, Personal Loan, Digital Loan, Online Borrowing, Instant Personal Loan
A top-up loan is an additional amount you can borrow over and above your - existing personal or business loan. You can apply for this only after paying off a specified number of EMI's. So, if you have a steady loan repayment record, your bank or financial institution can let you borrow some additional money either at a lower or the same interest rate.
Sounds like something you might need but not sure how to apply for a top-up loan? Without further ado, let us get right to it.
Meeting the eligibility requirements
The first step is to satisfy the top-up loan eligibility criteria -
- You must have an existing loan with the bank or financial institution.
- Bank or financial institutions can only give you a top-up after you have repaid a certain portion of the outstanding loan.
- A steady income is a must as it instils confidence in the bank or financial institution about your repayment capability.
- A healthy Credit score is critical as it proves your creditworthiness.
- A proper track record of timely EMI payments is a necessity.
Applying for top-ups
There are couple of ways of receiving a top-up on your current loan. The first one is where you can apply for the same with your current bank or financial institution. Provided, they offer top-up loan facility, and you have already repaid a portion of the existing loan through regular EMI's. After meeting all eligibility requirements, you can check your bank or financial institutions website and fill out an online application form.
In the second option, you can opt for a 'balance transfer'. In this situation, you will be shifting your current financing to another bank or financial institution and then applying for a top-up on the existing loan. You can also choose this method when other banks or financial institutions offer better interest rates or longer repayment durations.
Further, before applying for a top-up loan, experts recommend you use an online EMI calculator, to calculate the modified EMI you will pay. Do this by filling out the revised loan terms, such as - amount, interest rate, and tenure (in months) into the calculator.
The required documentation
Following are some common documents that banks or financial institutions ask for -
- Address proof such as your Aadhaar card, Driving license, Voter ID, etc.
- PAN card
- Income proof such as Form 16 / Last three month's salary slips for salaried or Last Two years' ITR along with Profit & Loss balance sheet for self employed
- Passport-size photographs
- Bank statement (Last three months bank statement in which salary was credited or last twelve months bank statement for self employed
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