New Delhi, July 24 -- Personal loans are among the costlier forms of borrowing. Yet, many turn to them during a financial crunch, overlooking a smarter alternative: Top-up home loans.

A home loan is typically the cheapest borrowing option in terms of interest rate. If you already have a home loan, you can apply for a top-up loan for any purpose, often at rates only slightly higher than your existing home loan.

But beware: While some banks charge just 0.25-0.5% extra, others may quote a much higher premium, making negotiation essential.

Pune-based Nishant Chalasany was only charged 0.25% higher than his home loan rate on the top-up loan. "They did quote me 0.5% higher than the home loan rate, but my repayment schedule and credit rating ...