What is a home loan Top-up-edited

01 Apr 2021

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It's a new year and a new normal in the lives of most people. Yet buying a home of one's own continues to be one of the biggest aspirations. However, with skyrocketing prices of real estate, property purchase remains out of the reach of many individuals. For this very reason, homebuyers are now increasingly opting for Home Loans to fund their dream house purchase. Banks and several lenders these days offer housing finance at competitive rates of interest, subject to several terms and conditions.

Add to that a top-up on your existing Home Loan product. Many banks, like Bank of Baroda, have Top-Up Loan in their range of loan products. As the name suggests, existing Home Loan customers who may need extra funds can opt for a top-up on their running Home Loans. Their eligibility for the same is ascertained by the lender based on your relation with the bank , their repayment history and credit score, among other things. The money from such a loan can be used for various purposes, be it for a wedding, fund your child's education, or renovate/repair your home.

At Bank of Baroda, if you switch your existing Home Loan from another bank via a balance transfer, you can get a Home Loan Top-Up. The minimum is Rs. 1 lakh and a maximum of Rs 2 crore. A processing charge of 0.25% of the loan amount is applicable on a Home Loan Top-Up from Bank of Baroda (minimum Rs 5,000 upfront and maximum Rs 12,500 plus GST).

Are you wondering why you should you take a top-up loan? We try answering that question here. Keep reading to find out more.

Eligibility Criteria for Home Loan Top Up

An existing Bank of Baroda Home Loan customer (including NRIs, PIOs, staff and ex-staff members), who may have availed of a Home Loan under public scheme or staff housing loans, is eligible for a Top-Up Loan on a Home Loan. The applicant must be at least 21 years of age (and a co-applicant should be at least 18 years old, wherever applicable). For a resident Indian applicant, the borrower's age plus the Top-Up Loan tenure should not exceed 70 years, as per laid down norms mentioned under the Bank of Baroda Home Loan Product (the same should not exceed 65 years for in case of NRIs, PIOs or OCIs).

New customers who opt for a Balance Transfer Loan (called a Home Loan Takeover scheme at Bank of Baroda) are also eligible for a Top-Up Home Loan.

Benefits of a Top-Up Home Loan

Minimal documentation, swifter loan approval and disbursal

If you're an existing Home Loan customer, getting a Top-Up on your Home Loan is easier. There is minimal documentation involves since the lender already has most of the required paperwork with you. Plus, knowing your repayment history and credit score patterns makes it more convenient for the banks to go through your Top-Up Home Loan application. This makes a speedy and hassle-free loan disbursal possible. Approach your branch for a quick top up loan.

Attractive interest rates

If you opt for a Top-Up Home Loan, you can get funds at fairly lower interest rates than those available in case of any other personal loan option.

Available for longer tenures

Depending on the period left in your existing Home Loan, you can opt for a Top-Up Loan for a relatively long tenure compared to other loan options.

Can put funds to use for a wide range of purposes

You can use the funds from a Top-Up Loan in any manner you deem fit. The money can be used to finance another home purchase, renovation and extension of an existing house, and even fund medical emergencies, a wedding, or your children's education. No restrictions are placed on how you wish to utilise this option unless you plan to use for speculation or illegal use.

Lower processing fee as compared to personal loans

The processing fee levied by banks in case of Top-Up Home Loans is generally lower than that applicable in case of personal loans.


While one can argue the pros and cons of a Top-Up Home Loan, it does serve as a good source of emergency funds. Moreover, the fact that you can avail of the option on your existing Home Loan makes the process less cumbersome. So if you're moving into that new house right away and need some more funds to settle into your place, this may be an option you'd want to take a look at.

Bank of Baroda customers who wish to apply for a Home Loan Top-Up can visit https//www.bankofbaroda.in/apply-for-baroda-top-up-loan-resident-nris-pios.htm?33 and fill out the form to begin the process.

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What is a Home Loan Processing Fee?

What is a Home Loan Processing Fee?
Banks and lending institutions levy a onetime charge on the different types of Home Loan products. This charge, known as the Home Loan processing fee. It is generally not deductible from the loan amount, and the borrower pays it separately. This is a fee to cover the loan processing cost incurred by the lender or the bank. Some banks may waive such processing charges for a Home Loan as part of special offers.
In the case of Bank of Baroda Home Loans, we charge a unified upfront fee which consist of:

Document Verification/ vetting charges
Pre sanction Inspection (Contact Point VerificationCPV) charges
Onetime postinspection charges
Advocate charges for a legal opinion
Valuer charges for valuation
Bureau report charges
CERSAI charges
ITR Verification charges

Post sanction proceesing fee table of Processing Fees for Home Loan

S. No.
Area of Banking Service
Service Charges (excluding GST)  w.e.f. 20.06.2019

Baroda Home Loan & Baroda Home Improvement Loan

Up to Rs 50 lakh 0.50% of the loan amount: Minimum: Rs 8,500 (Upfront) Maximum: Rs 15,000
Above Rs 50 lakh 0.25% of the loan amount: Minimum : Rs 8,500 (upfront) Maximum: Rs 25,000
The above charges are unified processing charges which include inspection, valuation and legal fees.
The above charges are for all categories of borrowers under Home Loans.

Baroda Home Loan Top Up
0.35% Minimum: Rs 5,000 (upfront) Maximum: Rs 12,500

Takeover of Home Loan (Resident /NRI/PIOs)
Flat: Rs 8,500 (upfront)

Pre-Approved Home Loan (In- Principle Sanction)
0.25% - 0.50%Rs 8,500 (upfront). Suppose the borrower submits the property documents within the validity period of a pre-approval letter. In that case, the balance amount of unified processing charges applicable to Home Loan will be recovered from the borrower.

Charges other than Home Loan Processing Fees
Banks also levy other charges like Home Loan prepayment fees or loan conversion charges. However, in case of a Bank of Baroda Home Loan, there are no charges applicable if the borrower chooses to prepay the loan amount before the tenure is over.
Impact of Home Loan Interest Rates
There is no correlation between the processing fee and the interest rate. However, your loan amount does factor in calculating the processing fee. A Baroda Home Loan is charged at the prevailing floating rate which is linked to external benchmark of REPO( RBI) or MCLR . The interest rate is linked to the Baroda Repo Linked Lending Rate (BRLLR) and is reset annually based on your bureau score(cibil).
Why Bank of Baroda for Home Loans
With a Bank of Baroda Home Loan, you can enjoy a free credit card and concession of 0.25% for car loans. Additionally, the bank offers free personal accident and property insurance with a Home Loan. You can also opt for a group credit life insurance cover when you apply. This cover protects the family against the borrower's death, and the family is not required to repay the Home Loan to the extent of the claim amount. You can pay the premium for the cover along with the EMIs.

Different Types of Loans for Your Home

Different Types of Loans for Your Home
With property rates rising with each passing year, it is almost impossible to buy one from your savings. Thankfully, you do not need to worry about exhausting all your savings to become a property owner. You can get the necessary funds with the help of a Home Loan. You can also get a loan for construction or land purchase. Each type of loan is designed to help fulfil a specific objective. You can choose the type of Home Loan that best serves your needs. Let us take a look at the different kinds of Home Loans provided by banks in India.
A Standard Home Loan
The Standard or Basic Home Loan is the most common type of House Loan. You can take this type of loan to purchase residential property, which could be brand new, under-construction, or even a pre-owned.
A Home Construction Loan
If you do not want to buy an existing property but instead build a house on a piece of land you own, you can also opt for a Home Construction Loan. In this type of loan, the bank disburses the loan amount in instalments based on how the construction progresses. You have to provide an estimate of the amount of money you need at every stage of construction.
Land or Plot Loan
Just as you can buy an already existing property with a Standard Home Loan, so can you buy a piece of land. This type of Home Loan is known as the Land or Plot Loan. To be eligible for this loan, you must ensure that the property documents like ownership, a title deed, etc., are clear as the bank is not responsible for checking the same. Further you are also required to construct residential house within 3 years. More on that below!
Home Improvement and Extension Loan
If you want to remodel your existing property, you need to apply for a Home Improvement Loan. You can apply for this loan if you wish to paint your home, fix a leaky ceiling and hanging wires, or give your property a face-lift. A Home Extension Loan enables you to enlarge your home's size by adding rooms, extending floors, etc.
Top-Up Home Loan
The Top-Up Home Loan is one where you can get more finance on your existing Home Loan for any purpose. For instance, you may want to construct a property while still repaying your Home Loan or remodel your house while still repaying your Standard Home Loan or you need fund for marriage of your daugher. To be eligible for a Top-Up Home loan, you should ensure that you've repaid all your EMIs on time.
Pre-Approved Home Loan
Bank of Baroda offers a special type of Home Loan known as the pre-approved Home Loan, wherein you can apply for the loan first and then start looking for a property based on the loan amount you are eligible for. The bank determines your eligibility based on your income and repayment capacity. This type of loan allows you to choose a property that suits your eligibility.
Banks in India (in partnership with the government) offer home loans at subsidised interest rates. Members of economically weaker sections, light, and medium-income groups are eligible for such a loan. This loan is known as the Pradhan Mantri Awas Yojana or PMAY loan, wherein qualified applicants can become owners of 'pucca' houses in urban and rural India. Family should not have any other residential house other than proposed to be purchased/constructed.
Balance Transfer Home Loan
Do you have an existing Home Loan with a bank or NBFC? Are you paying a high-interest rate on that loan? Now you can transfer your Home Loan to Bank of Baroda under a special type of House Loan – The Balance Transfer Home Loan. Transferring the loan to a bank offering a lower interest rate can reduce your Home Loan's actual cost.
How to Apply For Home Loan Online?
You can apply for different types of home loans online. Bank of Baroda offers standard home loans, top-up, balance transfers, pre-approved or PMAY loans. You need to visit the website to begin the online application process. Fill an online form and provide your personal and income details and the loan amount you need. The bank assesses your eligibility and informs you of the maximum loan amount you can get, as well as the interest rate you will be charged. The online process reduces the need to visit the bank frequently, with documents in tow - ????.
So what are you waiting for? Visit Bank of Baroda to choose the type of Home Loan that suits your needs. Begin the process of becoming a homeowner today!

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