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Tata Capital > Blog > Should You Be Taking a Top Up Personal Loan in Cases of Financial Crunch?

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Should You Be Taking a Top Up Personal Loan in Cases of Financial Crunch?

Should You Be Taking a Top Up Personal Loan in Cases of Financial Crunch?

You often come across moments in your life where quick access to funds can help you tend to a personal situation. And while a personal loan lets you tide over a financial crunch, sometimes it’s insufficient to cover sudden expenses that were left unaccounted for.

If you avail of personal finance to plan a wedding, pay your child’s education fee, or take care of a medical emergency but are still falling short, you could get just the right financing help. Yes! Instead of digging into your hard-earned savings, you can opt for a personal loan top up.

What is a top-up on personal finance?

If you availed of personal finance but now require more funds to cover an additional expense, you can get a top-up loan. You can borrow the top-up amount on your pre-existing personal finance. Lenders often extend this option to borrowers who have been diligently repaying their previous EMIs. 

Additional Read: Facing a Financial crunch during the Lockdown? Get a Quick Personal Loan Online

Why should you opt for a top-up on personal finance?

Featuring affordable interest rates, flexible tenure, and quick approval, a top-up personal loan is a convenient way to navigate a financial crisis. Here is why availing a top-up on personal finance can pull you out of any financial slump.

#1 Use it for any end-purpose

Lenders don’t dictate how a borrower must use the top-up funds. Be it for extra wedding expenses, expensive surgery, or the urgent renovation of your home, you retain complete control over how you spend your top-up loan.

#2 Consolidate debt

If multiple loans, credit card dues, and other pending bills are weighing you down, you can pay them off at once by topping up your personal finance. Doing this also brings down the total interest rates you would be paying on several loans. Besides, you no longer have to keep track of multiple EMI dates since you will only be repaying your top-up loan.

When you consolidate past debts and close your top-up loan, your CIBIL score will also get a boost.

#3 Get funds quickly

When you avail of personal finance and realise the amount borrowed is insufficient, you have two loan options. You can either sign up for another loan or supplement your need for additional funds by topping up your previous loan.

Since you pay your existing EMIs on time and have a good repayment history with your lender, your top-up loan processing will be quick. Besides, you can secure your top-up amount at attractive personal loan interest rates.

#4 No need for a collateral

Much like personal finance, a top-up on it also comes without pledging any collateral. So when you are in a financial fix, you get quick access to additional funds without putting down security or deposit. Like personal finance, online personal loan top up is unsecured, easy to avail, and requires minimal paperwork.  

Things to Consider Before Taking a Top-Up Personal Loan

Here are a few things you need to consider before taking a top-up personal loan –

  • Interest Rate – In most cases, the interest rates on your top-up loan are similar to regular personal loans. But it makes sense to look for a loan with a lower interest rate to reduce your EMI burden. Or you can even try negotiating with the lender on the interest rate.
  • Extra Charges – Depending on your lender, you might have to pay certain charges like processing fees, verification charges, and more on a loan. Enquire about such charges beforehand to see if the loan is still affordable. 
  • Loan Tenure – Since the top-up loan is only an addition to your existing personal loan, the tenure remains as on the personal loan. So, you must consider your affordability and decide if a top-up loan makes financial sense for you. 

Additional Read: 5 Financial Scenarios in Which you should Opt for Personal Loan

To sum up

Are the proceeds from your personal credit or loan not enough to cover all your expenses? If so, fret not! Avail of a top-up on personal finance with Tata Capital.We offer personal loans at attractive interest rates and customisable repayment tenures. Enjoy flexible EMI plans and swift disbursal of funds with us! To apply, check your personal loan eligibility on our website today!

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