Home Loan Balance Transfer or Top Up- Deciding the Right Move

Suppose you have opted for a home loan to cater to your dream of purchasing your dream home. In that case, you certainly know your repayment schedules. Applying for a loan after you calculate Home Loan EMI is advisable. You might have planned your finances and are paying your EMIs accordingly, but what happens when unexpected situations might change your plans? For example, an unforeseen financial curb or a salary cut may imply that you require additional funds to meet your repayment routine. Loan providers offer options like home loan balance transfer or top-up loans to aid you in tiding over your financial curb.

But the question is which is better between the two- a home loan balance transfer or a top-up loan? Both have their advantages and disadvantages. You can read the guide to clear your doubt and decide which is better and more convenient according to your requirements. Before opting for a loan, you can check out the home loan interest rates. 

Home Loan Balance Transfer or Top-Up- Which is Better?

The difference between a home loan balance transfer and a top-up loan are as follows:

  • Suitability

While both options are helpful in times of financial crunch, their suitability immensely differs. If you opt for a home loan transfer facility, you can enjoy the privileges of low-interest rates and low EMIs, decreasing your financial difficulties. On the other hand, if you apply for a top-up home loan, you receive extra funds in your bank account and can use it according to your discretion. Although a home loan top-up boosts your monthly EMI, it gives you more flexibility in handling your financial issues.

  • Availability

A balance transfer facility on your home loan is available after one year of the loan amount disbursal. On the other hand, the top-up option is available a few years after loan servicing. A loan provider offers a top-up facility on your home loan as per your repaid amount. You can access both facilities after you have paid off your loan.

  • Available Amount

Under the balance transfer facility, you would not receive any amount in your bank account. The new lender will directly pay the current lender and open a new loan account for the borrowers. Under the top-up facility, you can freely use your received extra funds. 

  • Lender Choice

According to its name, the balance transfer facility is available when you transfer your home loan account to a new financial establishment. You can apply with your current loan provider to take advantage of the home loan top-up facility. You can also apply for the top-up facility with a new lender who offers both options.

  • Equated Monthly Instalment

With the balance transfer facility, your monthly installment will decrease substantially because the new lender will offer a lower home loan interest rate than the one you initially opted for. In the top-up facility, your EMis will rise because it is beyond your current home loan. Loan providers offer the top-up facility on the identical interest rate you pay on your current loan. Paying separate EMIs for both facilities is mandatory.


Whether you opt for a home balance transfer or top-up, it aids you in assessing your requirements and then selecting them. You can apply for a top-up loan and the balance transfer loan when you opt for a balance transfer on home loans and check out the home loan interest rate. You can examine whether the new loan provider has a substantially decreased interest rate that would aid you in lowering your tenure if you choose a balance transfer facility. If you select top-up, you receive an additional loan to aid you in tiding over your other requirements. Hence, evaluate the situation, financial requirements, and income before selecting a top-up or balance transfer facility on your home loan. You can calculate Home Loan EMI before applying for a home loan.