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Update Date : 03-Jan-2023

Created Date : 03-Jan-2023

Category : Home Loan E-Book (Promotional_BT)

All about “Home Loan Overdraft Account”

This facility gives borrowers the ability and liberty to transfer all excess funds that are lying idle in their savings account (at a low rate of interest) into their home loan account (at a higher rate of interest) and save interest on the entire amount being saved on a daily basis.

This account is so efficient that if exploited fully, it can help you save up to 100% of your home loan interest and eventually pay off the loan faster.

For this, you neither have to wait for interest rates to change nor do you have to make any prepayments at all.

Further, what makes this product stand apart is the liquidity it offers.

In other words, you can withdraw funds being parked into this account as and when required. Until then, it keeps compounding and saves you interest.

Moreover, the process of accessing funds being parked into this account is also very simple.

You can either write a cheque to someone or you can simply use an online bank transfer facility to access funds.

And for the number of days, the funds remain in this account, the entire interest on the home loan is saved on a daily basis.

In other words, this facility helps can enjoy the benefits of making prepayments and the comforts of not making prepayments at the same time.

Let us throw some light on some of its important features.

1. Instant benefit – Any amount being deposited into this account reduces the principal balance of your home loan instantly and saves you interest.

So, you continue to pay interest only on the remaining balance until you withdraw funds.

2. Efficient – Interest is calculated on daily basis. So, the funds being parked even for a day save you interest for that particular day.

3. Liquidity – The amount being parked in this account remains liquid at all times.

4. Convenient – Amount can be withdrawn without any hassle using net banking and cheque leaves.

5. No restrictions – Any amount can be deposited for any number of days and for any number of times.

Here’s the list of benefits this product offers and how it can help you streamline your financial life:

1. Promotes savings – Any amount that you do not need today is “Surplus”. You can park your entire surplus into this account without worrying about future cash requirements. Its liquidity feature helps you make the most of every rupee that is lying unused in your savings account.

2. It bails you out during a financial crisis – You can prepare when you can foresee certain events like your job slipping out of your hands. But what if it just happens unexpectedly? Since the deposits you make into your home loan OD account remain liquid at all times, it helps you stay prepared at any given point in time. You can withdraw funds anytime either for managing your cash flow or for paying your home loan EMIs and saving your property from being foreclosed upon.

3. Invest and prepay at the same time – Can you invest and prepay your bonus at the same time? With a home loan OD account, you can. Deposit the entire sum into this account and divert a small portion of it into mutual funds SIPs every month. That way, you can create wealth from the same corpus that is saving you interest on your home loan.

4. Enjoy higher savings – You may not be comfortable giving away all of your savings to prepayment citing emergencies. But if the liquidity remains intact, you may not mind parking all your savings into your loan account. This way, you continue to save interest on the full amount uninterrupted.

5. Put your salary to work – Since this facility is being offered without any restrictions, you can park all your salary into this account for as long as you don’t need it and save interest on a daily basis.