In this article I will be writing about the home loans top up. The top up loans are god send when you are in the urgent need of money. There is some restrictions for santioning the top up loans. This article will present you the clear idea on top up loans and the tax benefits on home loans top up. Please post your feedback in the comments section. You can subscribe to our future articles here.
What is top up loans?
Let’s first look into the purpose and meaning of top up loans. You bought a apartment worth Rs.200000. After few years of payment, you feel that you have not purchased the parking space for you apartment. That may cost around Rs.300000 additional to the apartment cost. In this case you can apply for the top up loans which will be added to the existing home loans in the same bank.
The top up loans are sanctioned based on your repayment history and the value of the property. Normally banks would be interested in the top up loans since you are adding up more loans into the home loans. The advantage is top up loans amount can be used as like personal loans, but the interest rates will be better than personal loans.
Tax Benefits on Top Up Loans
You can get the tax benefits for the top up loans only if you have spent that money for your house. As i said the top up loans are used like personal loans. You can use for any other personal use like children education,etc. But, if you are using it for other than house extension, then you are eligible to apply for tax benefits. For example you used top up loans for buying the parking space or painting the house. Then it will be eligible to apply for the tax benefits. These deduction are included in the same home loans deductions of Rs.100000 for principal repayment and Rs.150000 for the interest payment. Read more about the tax benefits on home loans and joint home loans tax benefits.
In this article I have written about the home loans top up and how you can avail the tax benefits on the loans. This will be very useful for who want to extend their home loans to fulfill their urgent need for money. I hope you enjoyed this article. Thank you for the reading!! In the future articles i will come up with many interesting facts on home loans. Please post your feedback on the comments section.