A top-up loan or a concurrent personal loan: which option is best?

Personal loans are definitely very popular nowadays, where you will always find two common terms: top-up and concurrent loans. It is important to understand the difference so that you can do a personal loan online apply when you are financially stuck. Let's take a closer look at what a concurrent loan is and how it can help you deal with a financial emergency.

What are concurrent loans?

A concurrent loan is when the loan provider offers a loan when the borrower already has an existing loan. A loan provider offers a second loan along with an existing one, and that is termed a "concurrent loan", which can be really helpful to meet extra expenses and emergencies. Going forward, a concurrent loan is not going to be a very safe one since you will have multiple repayments and a monthly EMI.

Advantages of a Concurrent Loan

• A concurrent loan can actually help you with any kind of emergency, even if you have existing loans. It is only given by the loan provider that you have an existing financial relationship with. If you have existing loans, it will be difficult for you to get another loan if you try out a new loan provider. However, from the same loan provider, if you try out concurrent loans for any immediate need or emergency, you can always get the same.
• In concurrent loans, the rate of interest is always very low since you already have an existing financial relationship. However, the same is dependent on the track record of the previous existing loan that you are currently repaying.

What are top-up loans?

Top-up loans are extra funds that are given by the loan providers to individuals with existing financial relationships. This means, if an individual is ongoing with an instant personal loan and has a clean track record with the existing financial institution, they are eligible to get a top-up loan on the basis of the existing personal loan. The top-up loans are completely flexible in nature and can be used for anything and everything. Basically, individuals with a clean track record are only eligible to get a loan that does not show any kind of risk of default or delay in repayment.

Benefits on top-up loans

• Top-up loans are completely flexible. This means you can use the funds for anything and everything as it does not have any end-usage restrictions. These kinds of loans are very helpful for meeting any kind of emergency or instant requirement since they are not meant for any specific purpose.
• Top-up loans are very affordable as the rate of interest and hidden charges are almost minimal. The rate of interest is always high when the risk measure is also high due to the low credit score and low income of an individual. The highest loans, on the other hand, are only given to individuals with a quote credit profile and a clean track record, implying no risk at all.
• Top-up loans are already approved loans, which means that you do not go through the eligibility check and documentation approval process. This kind of loan is offered by the loan provider on behalf of a borrower with a clean track record and good repayment history. The loan provider offers you this kind of loan because you have a good track record and it is already approved by the loan provider.

Wrapping up

After understanding the difference and the benefits completely, it is always easy to go for an instant personal loan and take care of the rest of your finances and manage emergencies.

Financial Analyst at a leading lending firm in India with 15+ years of experienced in providing advice on instant personal loans and home loans in India.