A Top-Up Home Loan is a short-term loan that you can take from your mortgage lender in the event of an urgent monetary need.
Top-Up Home Loans are generally available to existing home loan customers of India's top commercial banks who have a record with their bank of diligently serving their existing loan for a year or more.
The top advantage to the top-up home loan is that it can be used for multiple purposes just as a personal loan, but with a lower interest rate than the 14-20% generally charged for a personal loan. Additionally, it requires less paperwork since you are an existing client of the bank. The mortage lender will, however, ask for an undertaking specifying the use of the funds in order to ensure that they are not being used for illegal or speculative activity.
It is important to keep in mind that, although top-up home loans are relatively easily granted, they can be difficult to pay back in addition to the existing mortgage and should not be considered a primary solution.