Top-up loan

A top-up loan is additional borrowing on an existing home loan, offered by your current lender once you have a clean repayment record and equity in the property. No fresh mortgage is created, so paperwork is lighter and the rate is close to your home-loan rate — far below a personal loan. Lenders usually allow it after twelve months of on-time EMI (Equated Monthly Instalment) payments, within the overall loan-to-value cap. It is commonly used for renovation, education or consolidating costlier debt. Sanction is at the lender's sole discretion.