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There is no confidence in life, when sudden money is needed, it cannot be said. Sometimes a medical emergency comes in the house, sometimes the expenses of children’s education or marriage stand in front. In such a situation, when a huge amount of money is required, first of all, the mind comes to mind. And this is where two names emerge first – Personal loan And Top-up loan.
Often people get confused about these two. They do not understand which loan will be beneficial according to their need. If you are also in this confusion, then let us understand it in very easy language today.
What is a personal loan? (Friends who do not ask for reason)
Personal loan, as is known by name, is for your personal expenses. This is a ‘unusable’ loan, that is, you do not need to mortgage anything (such as house or gold) to take it. The bank gives this loan by seeing your job, salary and CIBIL score.
- Specialty: It gets very quickly. The paperwork is low and the money can come to your account in 24 to 48 hours.
- weakness: Because it is a risky loan for the bank (no guarantee from you), so its Interest rate is very high it occurs.
What is the top-up loan? (Trust on current friendship)
The top-up loan facility is available only to those who are already running a loan (often home loan). This is an additional loan amount given above your existing home loan. The bank gives it a good repayment record of your old loan.
- Specialty: It is considered a ‘secured’ loan because it is connected to your home loan. This is why its Interest rate much lower than personal loan it occurs.
- weakness: It can only be found to those who are already running home loans and they have repaid some EMI on time. It can take a little longer than a personal loan.
What is better for you? Personal loan or top-up?
Now come to the biggest question. The decision depends on what your situation is.
- If your home loan is running: If you have a home loan going on and you have paid some of its installments on time, then close your eyes Top-up loan The best option is for you. In this, you can get more money at low interest and you also get a long time to repay.
- If you have no old loan: If you are not having any home loan or another secured loan, then you have only Personal loan Only the option is left. It will be expensive, but will fulfill your immediate need.
Understand in short:
| Feature | Personal loan | Top-up loan (on home loan) |
| Interest rate | More | Much less |
| Who will get? | Good salary/CIBIL score anyone | Who is already home loan |
| Guarantee | Not needed | Home loan is guaranteed |
| Time to get money | Very early (1-2 days) | A little longer (4-7 days) |
| Loan repayment period | Small (up to 5 years) | Long (up to a period of home loan) |
Final decision
If you are thinking of taking a loan for a sudden need for money, first of all see if you are eligible for the top-up loan. If yes, it will reduce the burden on your pocket significantly. If not, then personal loan is your support, but try to pay it as soon as possible so that you can avoid more interest.
