How and why should you apply for a personal loan top-up?

If you have an existing personal loan, but a need arises for additional funds, what can you do? While you could start taking a new personal loan, a better option is taking a personal loan top up. As it is technically an extension of your existing loan, the documentation is minimal, and the processing is faster.

To begin with, you have to check if your lender offers you the option of a top-up loan. You will also have to check your eligibility for the same. You can check your personal loan eligibility criteria online or through a visit to the nearest office of the lender.


Even if your lender doesn’t offer this option, you can still avail of a personal loan top up by transferring your outstanding balance to a new lender who provides this. Apart from top-up, you may also get a better personal loan interest rate or repayment tenure with the new lender.

How to apply

A top-up loan is required to meet any incremental financial needs that the borrower may have. Accordingly, the lender makes this additional disbursement and combines the existing and top-up loan with a consolidated EMI.

Most lenders accept applications for a top-up through multiple channels. This includes applications made through their internet banking platform, mobile app, call back requests placed by the interested borrower either online or through text, or a visit to their nearest branch.

The personal loan eligibility for a top-up may vary from lender to lender. You might have to check the following:

  • What is the limit of the amount you can apply for a top-up loan?
  • What are the existing loan-related formalities that need to be fulfilled – for instance, a top-up loan can be applied after paying, say, 12 EMIs of the existing personal loan?
  • What is the personal loan interest rates structure applicable for top-up loans?
  • What is the processing time for a personal loan top up loan?

Once you understand these, you can submit the required documents (ID/address/income proof with photographs) to start the process.

Why opt for a top-up?

  • Most lenders offer personal loan top up at no additional collateral or security.
  • The documentation is already carried out for the existing loan, so it is minimal in case of a top-up.
  • As an existing customer, your application processing and amount disbursal are quicker.
  • Lenders offer flexible repayment terms and attractive interest rates on top-up loans.

If you have any plans of applying for a top up, it is better to maintain a default-free repayment history on the existing loan. The top-up loan would increase your monthly liability; therefore, it is always wise to refer to a personal loan EMI calculator before deciding on the top-up application. Having said that, a top-up loan is an ideal way to meet immediate cash requirements in a prompt and hassle-free manner. It also saves you from the trouble of scouting for a new personal loan product all over again.