Many times we see the option of personal loan when we suddenly need money. But, the difficulty occurs when the first personal is going on. In such a situation, you can apply for a new personal loan. The second option is that you can take the top-up loan on the pre-ongoing personal loan. Both of them have their advantages and disadvantages. Let us know about them in detail.
Top-up loan means
Top-up Loan means a loan that your earlier Personal Loan But the bank or NBFC offers you. Banks or NBFCs on mangoes offer top-up loans only to customers with good credit scores. Since, this loan is found on your pre -running loan, then your entire details are available with the bank or NBFC. This does not take much time in the approval of the top-up loan. Its second specialty is that its interest rate is lower than the new personal loan.
Conditions of new personal loan
If you want to take a new personal loan, then you have to apply afresh for this. You can apply for a personal loan with a bank or NBFC. In this, banks or NBFCs see your eligibility. When your credit score is good, they approve your application. You have to pay the processing charge on the new personal loan. Its interest is also high. This makes this loan quite expensive.
What should you do?
Experts say that if you are paying the EMI of your personal loan already taken, then the top-up loan will be less expensive for you. Therefore, before taking a new personal loan, you should talk about the top-up loan from the bank, from which you have taken a personal loan. If the bank is willing to give you the top-up loan, then it will be seen whether the top-up loan of the amount it is offering will be fulfilled or not. If you do not fulfill your need, then you do not have another option but to take a new personal loan.
Your credit score may affect
Experts say that you should take a new personal loan or top-up loan only when you do not have any other option available. The reason for this is that more personal loan or top loan affects your credit score. It is believed that there is a difference between your income and liability. Because of this, you are forced to take a personal loan again and again. However, the repair of the loan on time makes your credit score improve.