Top-up home loans offer flexibility for existing borrowers, allowing funds for various needs like renovations or education expenses. However, RBI’s scrutiny warns against overreliance on these loans, which resemble personal loans and can lead to overleveraging. The loan amount depends on the outstanding principal, with interest rates akin to home loans but slightly higher. Despite being a cost-effective borrowing option, borrowers should repay swiftly to avoid long-term debt burden. While processing is streamlined, borrowers must exercise prudence, ensuring funds are used judiciously and not for non-essential expenses. Balancing benefits with responsible borrowing is key to leveraging top-up home loans effectively.
Understanding Top-Up Home Loans: Benefits and Cautionary Measures
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