A Personal Loan Top-up is a convenient and quick way to access funds, making it an excellent option for you. But can you assume that the parent bank will meet your needs as desired? To assist you in making a decision, please review the points below.

Interval Between Applying:- There should be an appropriate gap since the disbursement of the primary loan. If you have recently taken out a Personal Loan, banks issuing Personal Loan Top-ups, such as HDFC Bank and ICICI Bank, prefer a gap of three months or more before issuing funds as a top-up to your Existing Personal Loan. This gap ensures that you make timely repayments, a condition particularly applicable to first-time borrowers.

Your CIBIL Score is a crucial factor in determining your Eligibility for a Personal Loan Top-up It must meet the required benchmark. The CIBIL Score and repayment history are verified before issuing further funds as a top loan. The track record of repayment for existing bank loans that require a top-up, as well as other loans from external lenders, should be smooth. Dues on the Credit Card being used must also be cleared.

Company Category and Employment Profile:- The procedure for Applying for a Top-up Loan is the same as for a New Personal Loan. Therefore, all the applicant’s parameters are checked. If the applicant has changed employment, the current employer should be listed in HDFC Bank’s Company Category List. If the company is not featured in the approved company category list, the applicant can apply with an alternate bank for a Parallel Loan.

Financial Eligibility:- The loan amount issued as a Top-up is based on the bank’s eligibility criteria and the applicant’s capacity to afford the extra EMI. If the applicant has taken on other credit recently in the form of a mortgage loan or Auto loan, all the current EMI will be taken into account when calculating the eligibility for extra funds to be added to the existing personal loan as a Top Up. Use an EMI Calculator to calculate a suitable EMI before applying.

Prepayment Option:- If you are running a HDFC Bank Personal Loan or an ICICI Bank Personal Loan, you have the option to foreclose your loan after paying 12 instalments by settling the principal amount balance, for which a fee is applicable depending on the loan amount borrowed. If you wish to repay the loan amount promptly, Applying for a Parallel Loan, which is a separate loan taken from another bank, is a better option, as both loans are independent and can be foreclosed after the Bank’s terms are fulfilled.

Interest Rate:- Before Applying for a Personal Loan Top-up, it’s essential to compare the interest rates offered by other lenders. If you have a good CIBIL Score and an on-time repayment record, other Banks can provide you with a lower interest rate and additional funds through a Balance Transfer of a Personal Loan. This comparison can empower you to make the best financial decision for your situation.

In Conclusion:-

A Personal Loan for salaried individuals has become popular as Banks offer loan amounts tailored to individual needs without requiring any collateral. If you have steady employment and are managing your finances well, Banks are willing to provide Personal Loans. Furthermore, if you fulfil all your financial commitments, a Top-up to your Existing Personal Loan is readily available.

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