You can also come in such a situation when you have taken a personal loan for renovation of the house, but now your child’s marriage has also come. In such a situation many questions will be coming in your mind, such as whether you should take a top-up loan or another loan from another bank. There is also a question whether it is possible to get loans from both banks or borrowers.
The answer is yes. You can take a loan from two banks at the same time. But you have to fulfil the qualifications of the other loan.
Good credit score
When you go to the lender for a loan, he first sees your credit score with the rating agencies. If the credit score is good or above 750, then you can apply for a new loan.
Apart from your credit score, the bank also looks at your repayment capacity. Based on this, the bank decides whether you are worth a loan or not. The bank uses FOIR ie Fixed Obligation to Income Ratio (Fixed Obligation to Income Ratio) to check your repayment capacity. According to this scale, a loan customer has to fix the limit of his fixed works, in which the EMI of the current loan will be applicable to 50 percent of his income. In other words, the lender will decide that your monthly loan EMI does not exceed 50 percent of your monthly income. It is believed that 50 percent of the rest is necessary to live your life.
You can get two loans simultaneously but keep in mind that the second loan can be expensive and risky. Borrowing more will increase your EMI and overall cost of the loan. This will make you difficult to repay the loan. If you did not give or leave an EMI, it will negatively affect your credit score. Apart from this, you can apply for a top-up loan on your personal loan.
What is a top up loan?
The top up loan is given to the customer only on his existing loan. It is also available on personal loans and home loans. If the bank does not offer the top up loan, then the customer can apply for the top up loan by transferring his existing loan to a new lender.
Benefits and features of top up loan
1. Debt Consolidation: Customers can take a top up loan on their existing personal loan and pay bills like credit card on time. Due to consolidation of other loans, customers can reduce the total interest cost and now they will have the same loan to repay.
2. Less documents: Since the customer already has a relationship with the bank, the bank also knows the customer, his credit history and the repayment behavior. Therefore, the need for documents remains negligible. However, this condition varies from bank to bank.
3. Faster processing: Since the bank knows the customer well because of his loan, the loan amount disbursement will also speed up for the top up.
4. EMI Consolidation: Many lenders allow the customer to repay the original loan and the top up loan in the same EMI. Therefore, there is no hassle of paying different loans. So you have to fill the same EMI every month and do not have to remember different dates for different loans.
5. Attractive Interest: Lenders give top up loans at attractive rates to customers who do not default in paying EMI. Because of this, many customers choose top up loans instead of applying for new loans.
6. Term extension: The term of the top up loan depends on the outstanding balance, loan amount and repayment capacity. This period can be longer than the duration of your personal loan. Long term means that you have enough time to repay the loan.
7. Funds to meet other expenses: If you have already taken a personal loan for home decoration but you need money for vacation or medical emergency, then you take a top up loan on the existing loan itself. Can. Then you will not need to take a new loan.
If you know how to handle, then personal loan is one of the most excellent financial options. All reputed banks and financial institutions offer personal loans. You can take personal loan for renovation, vacation, higher education of the child, marriage or any major purchase.