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What is Loan Top-Up?

A loan top-up is an additional advance on an existing loan, where the outstanding balance is typically settled from the new facility and the member continues with a single larger loan. It is usually available once a member has repaid a portion of the original loan or grown their deposits enough to support more.

A real Kenyan example

A member partway through repaying a loan applies for a top-up; the SACCO settles the remaining balance out of the new advance and issues a new repayment schedule for the larger amount.

Why it matters

A top-up resets the term, which lowers the monthly repayment and raises the total interest paid. Members frequently take one for the lower monthly figure without noticing the second effect, and repeated top-ups can keep a member permanently in debt to their own SACCO.

FAQs

When can I top up a SACCO loan?
Eligibility is set by each SACCO, commonly after a minimum number of repayments or once deposits have grown enough to support a larger amount. Ask your SACCO for its specific rule.
Does a top-up cost more?
Usually it increases total interest, because settling the old balance and extending the term means paying interest over a longer period on a larger amount. Ask for the total repayable on the new schedule and compare it against what remained on the old one.
Is a top-up the same as a second loan?
No. A top-up replaces the existing loan with a larger one. A second loan runs alongside the first. Which is available depends on the SACCO and on whether your deposits and affordability support both.

Related terms

Loan RefinancingLoan RestructuringLoan ReschedulingLoan Multiplier

See all 72 terms