Is the top-up loan a lot of burden? Find out these ..

The first thing to remember personal debt is when the need for money is required! Many people take this type of loan and use them for their expenses. However, if you need to pay, the option to obtain an inkal loan on individual loans .. banks. This is called ‘top-up’ loan. However, whatever is, this is so much that the financial burden on us will increase. We get caught in debt. In this context, before choosing the original top-up loan, which factors should be considered? Find out here.

Find out before taking the top-up loan.

Increased debt burden: The top-up loan will add to your current loan. This means that your monthly payments are more. Can you repay this additional burden before taking a loan? Or? It is important to check this.

, Flexible fund use: Unlike some limitations of how to spend money, this top-up loan can be used for various purposes such as medical bills, home repair, education or business.

, See interest rate: The interest rate for top-up loans is usually equal to the current individual loan or slightly higher. Rates should be compared to inexpensive borrowers. In consultation with banks at rates.

Credit tenure adjustment: Like a simple personal debt, a repayment in the top-up loan is also dense. This affects the money you pay.

The top-up loan affects the credit score in many ways. This increases the amount of backlog loan. This credit score affects the major credit utility ratio in calculation.

It is important to maintain good repayment history. This is because timely payment credits on both original and top-up loans improve the credit qualification. However, payments paid reduce credit scores. In addition, having a long credit history usually benefits the score. But to maintain a strong financial profile, it is necessary to maintain multiple loans responsibly.

Before applying for top-up loans, it is important to review the loan rules including eligibility criteria, interest rates and any additional fee. The borrower should assess its financial stability and ensure that the increased EMI is sufficient in their budget without affecting emergency costs. Searching for alternative options such as loan or credit lines on gold loans and fixed deposits can be a better option. Contacting a financial advisor will also provide valuable guidance whether we will have a top-up loan to suit our long-term financial goals.

The top-up loan is to be a useful financial equipment, improving in the existing loan relationship and providing properly additional funds without financial burden. However, it is important to assess ability, credit score effect and alternative financing options before making decisions.

– Akash Bararia, HDB Financial Services Limited Sales Finance Head.