The home loan overdraft facility is often confused with the redraw facility. Here’s everything you need to know about the overdraft facility. An overdraft is an extension of credit from a lending institution when an account reaches zero. In layman’s term, it is when a bank allows you to withdraw.
Expert: PV Subramanyam, Home finance expert. Question: I want to borrow Rs 45 Lakhs from Central Bank of India. Should I opt for a home loan or an overdraft-linked loan? Will I save money if I use.
· Another option is increasing the home loan tenure. If his home loan tenure is 20 years according to the loan agreement, he can make arrangements with the bank to increase his loan tenure to 25 years. Banks will be willing to offer this option based on the age of retirement.
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If you are planning to take a home loan and are confident of generating a surplus funds regularly after paying the EMIs, you can opt for loan schemes with an overdraft facility. This will not only cut interest payments significantly but will also reduce the loan tenure.
Why Should You Opt For Overdraft? There are certain reasons which make overdraft a better option as compared to the loan such as:-An Overdraft loan facility is involved with the flexibility in borrowing and the repayment options. This allows you to set a specific amount that you want to pay on a monthly basis.
Hello, It’s a very clever ploy rather business strategy, to attract more and more customers into its fold, initiated by SBI and now lot of other banks are following this. Its a win-win for both the bank and the customer. How? Under normal circumst.
Prepaying the loan brings down the interest you end up paying, as well as the tenure of the loan. The EMI remains unchanged. When to opt for the home loan overdraft? “The home loan overdraft facility.
Like getting a line of credit for your home loan, the interest on an overdraft facility is usually slightly higher than your business loan. In addition, the interest rate is always variable unless you have a strong business turnover and are using the facility on a regular basis, in which case you’re likely in a position to negotiate a fixed rate.