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Top Up Personal Loan in UAE

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Personal Loan in UAE

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All kinds of expenses can be easily managed with personal loans, as they allow you to get the required funds without any major conditions or requirements. Personal loans can assist you with all of your financial requirements, whether you need to finance an urgent medical procedure, plan an ideal wedding, take a well-deserved holiday, and so on.

Numerous financial institutions in the UAE today even offer a top-up option that allows you access to additional funds in case the existing funds fall short. A top-up personal loan is a financing facility that is offered by financial institutions on existing personal loans. With this facility, you can get an additional loan amount on the outstanding personal loan amount. 

An Introduction to Top Up Personal Loans

A top-up personal loan is an extra loan that you can avail of over your current personal loan. It is one of the credit options that you can use in case you fall short on funds during emergencies. You can easily take a top-up facility in case your personal loan is still active, as this type of loan is usually approved faster than a regular personal loan because the paperwork is already done with the bank when you applied for the original loan.

To get clarity about top-up personal loans, read the following example -

One of the best examples to explain what a top-up personal loan is would be a low-fuel indicator in your automobile. You own a vehicle that you fill up with 25 L once a month. In a certain month, however, you were required to use the car more frequently than normal. 

So around the 20th of the month, you notice that your dashboard's "low fuel" indicator is blinking. You drive to the closest gas station and fill your automobile up with an additional 10 L of fuel - this is precisely how a personal loan top-up loan works. 

Another example of a top-up personal loan is mentioned below -

Assume that you have an existing loan of AED 1 million for 4 years and you have already repaid AED 500,000 in the last two years. Now, instead of choosing an expensive personal loan, if you are looking ahead to having your home renovated, you can choose a top-up loan to fund the procedure swiftly. 

Features of Top Up Personal Loans in UAE

Discussed below are the top features of top-up personal loans in the UAE -

  • Available Only on an Existing Personal Loan - You can get the top-up loan facility only on an active and existing personal loan with any bank in the UAE
  • It is an Unsecured Loan - When you plan on availing of the top-up facility, you do not need to put up any security to get the loan. Moreover, this kind of loan does not require any guarantor either. 
  • Flexible Repayment Tenure - Top-up personal loans are offered for a tenure that is equal to the length of the initial mortgage. However, borrowers have the option of top-up loans with terms ranging from 5 years to 20 years. Age, income, the worth of the newly purchased property and any current property, employment stability, and others are all the crucial factors in determining the loan's tenure. 
  • Loan Amount - The combined sum of the original loan and the subsequent top-up loan is not greater than 70% of the property's worth
  • Top-up Personal Loan Can opt for Different Purposes - The available credit can be utilised for various things such as house renovation, home improvement, emergency needs, and others.
insurer your car

Benefits of Top Up Personal Loans in UAE

Given below are the benefits of top-up personal loans in the UAE -

  • Attractive Interest Rates - Top-up loans are often provided by banks and other financial organisations at the exact interest rate as the original personal loan that was approved. 
  • Top-up Loans are Offered Even with Balance Transfer - Some financial institutions also provide top-up personal loans for balance transfers. These options are appropriate for those who cannot or are paying greater interest rates for top-up loans from their current lending institutions.
  • Quick Loan Processing - In contrast to applying for a new loan, if you already have a loan from the current bank and have your application for the original loan approved, your application can get accepted for a top-up loan much faster.
  • Flexible Repayment Tenure - It is fairly easy to repay the top-up personal loan because the repayment period offered for the top-up loans is longer than that of personal loans.

Eligibility Criteria for Top up Personal Loans

Listed below are the eligibility standards that you must fulfil to get a top-up personal loan in the UAE -

  • You should already be authorised for a personal loan with the lending institution
  • You must have a respectable credit rating and a spotless payback history
  • Your credit report and score should be acceptable
  • Your repayment history must be unblemished without any past-due or missing monthly instalments
  • You should be able to repay both loans promptly
  • If you have outstanding personal loans, you would be eligible for top-up personal loans provided your loan provider has the facility for the same
Top up Loan: Meaning, Features, Benefits & Eligibility in UAE

Things to Consider When Applying for a Top Up Personal Loan in the UAE

Take note of the following things before applying for a top-up personal loan in the UAE -

  • Rate of Interest - Top-up personal loans have interest rates comparable to those of standard personal loans. It is logical to choose the offer if the rate is less than what is being provided in the market. If not, you should bargain over the interest rate with the lender. If the lender is unable or not willing to compromise, you may want to choose a new personal loan to lower your monthly instalment requirements. This will help you reduce your monthly instalments and interest payments.
  • Know the Hidden Charges - When choosing a top-up personal loan, your lender may charge you a processing fee, registration fee, or other fees. To determine whether you can afford the loan, you must find out from the lender in advance about all of these hidden fees. If the current lender is levying high fees, it is advisable to not stick with them.
  • Income - Your monthly instalment obligation rises since you cannot modify the loan terms with a top-up personal loan. Here, you must ensure that your income has grown since you took out the current personal loan to punctually settle the increased EMIs. If your salary remains constant, it could put a strain on your finances.
  • Look for Other Loan Options - Personal loans are more expensive than secured loans because they are unsecured. For this reason, it is advised to only use a personal loan of any form, such as a conventional personal loan, top-up personal loan, refinance, and so on, in an emergency where you have no other options and a sudden requirement for money.
insurer your car

To Conclude

Most leading banks and financial institutions offer top-up personal loan facilities in the UAE. This loan is suitable for you if you need funds to meet an emergency on top of your current loans. As you may guess, you can avail of this loan only on your existing, outstanding personal loan. 

Keep in mind that the eligibility criteria for availing of this loan would depend on various factors related to your profile and the loan provider. To avail of this loan, you may be asked to pay all your other monthly instalments on time and maintain a good credit score.

Frequently Asked Questions

What is the maximum repayment tenure for a top-up personal loan?

For a top-up loan, there is no set duration. A top-up personal loan can often be approved for a term that is longer than the remaining time on the original personal loan. The top-up loan's tenure, nonetheless, cannot exceed the initial loan's outstanding tenure. 

Can you apply for a top-up personal loan in the UAE from another bank if your existing bank does not offer a top-up personal loan?

You can shift your personal loan to a different bank through a personal loan balance transfer option and take out a top-up loan at the same time if your current lender does not provide top-up personal loans or declines to grant you the top-up loan facility.

Can you apply for a top-up personal loan if you already have more than three loans?

The lender's assessment of your ability to repay the loan will determine whether your request for a top-up personal loan is approved. If the lender believes you lack the ability to settle the loan, it will reject your request for a top-up personal loan.

Does taking a top-up personal loan affect the credit score?

Your credit score is unaffected by a top-up personal loan until you miss payments.

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