But tax exemption will depend on the purpose Balance transfer of home loans has become very common after the removal of penalty on pre- payment. Many banks are offering borrowers the option to avail of a top- up loan while doing the transfer. The advantage is the possibility to shift to a lower interest rate loan and getting a higher amount at the same time. The additional amount can be used for any purpose as long, as it is not speculative in nature. Today, banks are willing to offer top- up home loans at the same rate as a home loan, as a strategy to entice borrowers to do a balance transfer, says Gaurav Gupta, of Myloancare. in, a home loan advisory. “Most banks tend to price top- up loans closer to rates on loan against property ( LAP). But to make balance transfers attractive, many are offering discounts on top- ups as an incentive,” Gupta says. As compared to an LAP, the advantage of a top- up home loan is a lower interest rate and longer repayment period. Processing is