Prestige Willow Tree

Will Home Loan Overdraft Work for You?

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Planning to buy a residential abode in Prestige Willow Tree?

Prestige Willow Tree
Prestige Willow Tree Apartments

Now that you have made up your mind to invest in this luxury you must be searching options for raising home loans. Right? Here is how you can go about with facilities on offer.
When buying a home, consider numerous options to get the home loans in different financial institutions having different interest rates. Banks now are giving flexibility to home buyers to use their home loan as an overdraft account.

The scheme of home loan overdraft is similar to the current account with an overdraft limit. One can deposit all their surplus funds into their home loan account and this surplus will be reviewed as an advance payment against your principal amount.

In the regular home loan, the interest of loan is calculated on the outstanding principal amount, from which the savings deposited in the home loan account is deducted over and above the EMI. Regular depositing to your home loan account would proportionally reduce the outstanding principal. Hence, the overall liability of the loan is dropped down.

For the home loan with an overdraft facility, the interest on loan calculated is based on the outstanding principal amount only, like in the regular home loan. The only difference is, in OD facility interest is calculated on a daily basis and is debited at month end. Thus, it differs, based on outstanding principal amount. This advance payment of the loan pulls down the amount of interest you end up paying together with the tenure of the loan. The EMI remains unchanged in this case.

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                                                              Home loan

When to go with home loan overdraft facility?

On a regular basis, if you are able to save some money monthly after paying off those regular EMI, then only the overdraft facility on a home loan is a good option for you. Otherwise, for the person who has easy access to short-term liquidity like a self-employed man, it is a good option.

What benefit home loan overdraft facility offers?

Home Loan OD is a good option for families with double incomes. Appealing for the buyers who have excess fund inflows like the businessmen, who enjoy a secure financial position with regular access to surplus funds. They can also withdraw the surplus when required, without having to opt for a personal loan.

The OD on Home loan gives greater liquidity on the amount deposited as well as flexibility in the repayment. Bank charges no penalties for advance payment of loan amount. The Biggest advantage of this facility is that the buyer can withdraw the surplus amount at any point in time.i.e. the liquidity. In case of a regular home loan, the part payment made reduces the outstanding principal but that money won’t be offered to you again. However, in the home loan overdraft scheme, the surplus amount in the account is available for withdrawal that too at any time.

With so many benefits this facility is not good for people who do not earn regular income are only able to meet their regular EMIs. For such buyers a normal home loan is only better, as with an OD facility home loan is slightly expensive.

The decision of raising a home loan for your dream space should not be made in haste. Look for different options and select the best to buy luxurious Prestige Willow Tree Vidyaranapura, a project that is just enough to suit your purpose of dream housing.


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