Existing house loan borrowers may well have to incur significant-ticket way of life costs linked to house improvement or renovation, private travel, auto acquire, children’s greater education/wedding, health-related emergencies, and so forth. Those facing monetary shortfalls to meet these costs can take into consideration availing prime-up house loans from their current house loan lenders.
Let us talk about the prime 5 rewards of a prime-up house loan for the current house loan borrowers:
Funds with no restriction on finish usage
While prime-up house loans can just be availed by the current house loan borrowers, they do not come with any restriction on finish usage of funds except for speculative purposes. Absence of finish usage restriction tends to make prime-up house loans an option to loan against credit cards or private loans for current house loan borrowers. The proceeds of a prime-up house loan can also be made use of for getting a auto, financing child’s greater education, and so forth.
Lower interest price
Personal loan interest prices variety anyplace involving 9% and 24% p.a. basis the borrowers’ credit profiles. Interest prices for loans against credit cards are frequently a small greater than the private loan interest prices out there to a borrower from the identical lender. However, interest prices of prime-up house loans are frequently the identical or a small greater than the prevalent interest price of underlying house loans. This tends to make prime-up house loans one of the least expensive credit selections for the current house loan borrowers availing house loans at decrease interest prices.
Longer repayment tenure
Tenures of prime-up house loans generally rely on the residual tenure of underlying house loans. For instance, for an current house loan borrower possessing residual house loan tenure of 15 years, his prime up house loan tenure can go up to 15 years. The loan tenure of option credit selections like loan against credit cards and private loans are frequently up to 5 years with some lenders prepared to present a greater private loan tenure of up to 7 years. As longer tenure leads to decrease EMIs, picking out a prime-up house loan may well help in decreasing the EMI burden. Similarly, current house loan borrowers looking for longer tenures to finance their auto acquire can also take into consideration availing prime-up house loans.
Higher loan quantity
The loan quantity in case of prime-up house loans can go up to Rs 50 lakh or more. However, it can mainly go up to the distinction involving the original sanctioned house loan quantity and outstanding loan quantity. Loan quantity in case of private loans can variety from Rs 50,000 to Rs 40 lakh basis the borrower’s earnings and repayment capacity. For loan against credit cards, the loan quantity is frequently a proportion of the credit cardholder’s cost-free credit limit. However, a couple of card issuers can present loan against credit card more than and above the credit cardholder’s credit limit. Thus, the probabilities of receiving a greater loan quantity are a lot greater in case of prime-up house loans, specially for these who have currently repaid a considerable proportion of the original house loan quantity.
Fast processing and documentation
The processing time of prime-up house loans is commonly longer than loan against credit cards and private loans. Loan against credit cards are commonly disbursed inside the identical day of loan application whereas private loans are disbursed inside 2-7 days. However, some lenders have began supplying pre-authorized prime-up house loans to their current house loan borrowers. Such lenders frequently claim to disburse prime-up house loans inside the identical day of loan application. This enables immediate prime-up house loans to compete with credit card loans and immediate private loans in terms of rapid disbursal.
(By Ratan Chaudhary, Head of Home Loans, Paisabazaar.com)