Smart way to finance your home interiors with a top-up loan | Fusion - WeRIndia

Moving into a new home is exciting, especially when you start planning the interiors.

However, costs for modular kitchens, wardrobes, flooring, and lighting can rise quickly.

Therefore, instead of exhausting your savings, a top-up loan on your existing home loan can be a practical financing option.

A top-up loan is an additional amount offered by your current home loan lender over your existing loan. Since it is linked to your housing loan, the process is simpler and faster.

Moreover, if you have maintained a good repayment record for at least a year, you may qualify with minimal documentation. This makes it easier to fund home interiors, renovations, or other personal needs without applying for a new loan.

One major reason to choose a housing loan top-up is its lower interest rate. Because the loan is secured against your property, the interest is usually lower than that of personal loans or credit cards.

As a result, your overall borrowing cost reduces significantly. In addition, the repayment tenure can align with your existing home loan, which keeps EMIs manageable.

The working of a top-up loan is straightforward. First, the lender checks your repayment history and outstanding loan balance. Then, they assess your property value.

Based on this, an additional loan amount is sanctioned, often up to 70-80% of the property’s market value. The approved amount is disbursed quickly, sometimes within a few days, and added to your existing loan for repayment.

Using a top-up loan for interiors offers several benefits. You get flexible usage of funds for furniture, fittings, painting, or upgrades.

Furthermore, if the money is used for home improvement, the interest paid may qualify for tax deductions under Section 24(b) of the Income Tax Act. This adds to your savings over time.

For example, if you originally took a ₹20 lakh home loan and have repaid ₹5 lakh, your lender may offer a top-up of ₹3–4 lakh. This amount can comfortably cover interior work while keeping your finances stable.

Before applying, check eligibility criteria, compare interest rates, and assess your repayment capacity.

When used wisely, a top-up loan becomes a smart and cost-effective way to turn your house into a well-designed home.

Image from Pxhere (Free for commercial use / CC0 Public Domain)

Image Published on January 20, 2017

Image Reference: https://pxhere.com/en/photo/486235