Overdraft home loan vs Regular Home Loan

[usama0581]

Hi All,

Can someone help me to understand the benefits of Overdraft home loan over Regular Home Loan? I'm planning to buy a under construction property and exploring different banks for home loan. In SBI regular home loan comes with 8.55 interest where as max gain comes with 9.65 interest rate.

 

[ShavirB]

Benefit of OD over Regular Home Loan

1) Regular home loan usually has penalty for prepayment, that means if you wish to pay more than your scheduled EMI you will have to pay some penalty. OD allows you complete flexibility

2) Surplus funds parked in OD account will automatically be considered as part of Loan payment. Your overall interest may reduce.

OD could be great if you generate surplus funds, and are planning to prepay home loan. Otherwise it won't make sense to pay the extra interest

 

[swapnil raut]

Benefit of OD over Regular Home Loan

1) Regular home loan usually has penalty for prepayment, that means if you wish to pay more than your scheduled EMI you will have to pay some penalty. OD allows you complete flexibility

2) Surplus funds parked in OD account will automatically be considered as part of Loan payment. Your overall interest may reduce.

OD could be great if you generate surplus funds, and are planning to prepay home loan. Otherwise it won't make sense to pay the extra interest

what if applicant is salaried have some amount can be parked in Surplus funds monthly and same can be utilized as an when needed.