Everyone faces a hard financial time in their lives when they have to look for financial aid to cover their expenses. But borrowing money from friends or relatives is not an option when you prefer privacy in your financial matters. And in such situations, you can get formal financial aid in the form of a personal loan or add-on loans on your existing loan plan.
But many people find it
confusing to choose between add-ons and personal loans. So here we will try
to figure out which one you should choose for quick cash.
What is a top-up loan?
A top-up loan is an
add-on loan on your existing loan plan. Banks and NBFCs provide top-up loans
for their few and selective customers.
They provide this facility to the customers
after successfully completing a specific loan tenure. In addition, add-on loans
are easy to access and require minimal documentation, making them appealing to
a borrower who wants immediate financial aid.
What is a personal loan?
A personal loan is an unsecured loan that requires minimal documentation and offers
quick approval and loan disbursal. The best part of personal loans is that
borrowers do not need to pledge their personal assets or property to get the
loan. You can apply for a loan using an online
loan app.
Personal loan vs top-up loan
Personal and add-on
loans are the two most popular ways to get instant financial aid whenever you
feel a money crunch. But if you want to pick the best option for your needs,
you must closely observe both plans and understand which one can bring more benefits.
So here we will briefly compare both plans for your knowledge.
● Loan
tenure
Taking an add-on or
top-up loan on your existing loan will extend the loan tenure of your existing
loan plan, which means if your loan were about to end in two years, it would
take more than two years to clear if you take an add-on loan on it. Also, the
EMI plan will get affected, and you will have to pay more money on loan EMIs
after you avail of the add-on loan.
Normally, personal loans
offer flexible tenure, and you can adjust the monthly EMIs on your personal
loan, which is impossible in add-on plans like home loan top-ups.
● Loan
interest
The add-on or top-up
loans can be borrowed on your existing loan and, interestingly, come with lower
interest rates. This is because the lender already has security from you (for
example, home loans or mortgage loans) and, therefore, do not need additional
security in the form of high interest.
But personal loans are
non-collateral and naturally come with high interests. But when you take
instant personal loans from lenders like LazyPay, you do not need to worry
about your pledged assets as you face in add-ons.
● Loan
processing and disbursal
Personal loans are also
known as instant loans that you can apply for with an online loan app. The application does not take much time to process, and you
can get quick approval and loan disbursal. Lenders like LazyPay offer
lighting-speed approval and loan disbursal within 24 hrs.
But add-ons take some
time, and you have to wait some time to get approval for your financial aid.
Compared to add-ons, personal loans are more convenient and ideal solutions
when you need immediate financial aid.
● Application
Personal loans come with an easy-to-apply
method, and you can apply for a personal
loan digitally through an online
loan app. First, download the official loan app from Google Play Store or
Apple Store and register yourself. Then, you can access a paperless and minimal
documentation loan application process that you can complete within 2-3 minutes
with simple taps on your smartphone screen.
But it is different
regarding top-up loans as they are (mostly) not available digitally, and even
if some lenders offer top-up schemes, you must physically contact them to apply
for the loan.
Thanks for sharing such an informative post with us. If anybody need an instant personal loan up to Rs.1 lakh, they should download our personal loan app to cover their emergency expenses without hassle
ReplyDeleteFantastic article! The comparison between personal loans and top-up loans is something many people overlook when in need of extra funds. Your insights on understanding the purpose, interest rates, and eligibility criteria for both options are incredibly helpful. Making an informed decision between personal loans and top-up loans can save borrowers money and ensure they choose the right financial solution for their needs. Thanks for breaking down the key factors in this informative blog post!
ReplyDeleteInstant personal loan up to Rs.1 lakh, they should download our personal loan app to cover their emergency expenses without hassle
ReplyDelete