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Should you take a top-up loan on your existing personal loan?
Mint Mumbai
|April 18, 2025
I'm repaying a personal loan, but due to recent unexpected expenses, I find myself needing additional funds. I've an option to take a top-up loan on my existing personal loan, but I'm not sure if it's a better route compared to a fresh loan.
Could you explain how a top-up loan works, what are the pros and cons, and what factors should I really consider before deciding to go ahead with it?
—Name withheld on request
A top-up loan on an existing personal loan can be a convenient way to access additional funds without going through the process of applying for a new loan. It allows borrowers to utilize their existing loan relationship with the lender to avail of extra credit. However, before opting for top-up loans, several factors need to be considered:
Key considerations
Increased loan burden: A top-up loan adds to your existing debt, which means your monthly payments will be higher. It's important to check if you can comfortably afford the extra repayment before taking the loan.
This story is from the April 18, 2025 edition of Mint Mumbai.
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