What is a Home Loan Overdraft Facility?

Fresh home loan borrowers having restricted liquidity can opt for the home saver option, a home loan variant. Many Lenders offers home loan overdraft facility, branded as home saver, home loan – advantage etc. But they require higher liquidity. Under this facility, an additional overdraft account is opened in the form of savings or current account. The borrower can park his surpluses in overdraft account and withdraw from it as per his cash flow requirements.

The lender would calculate the interest cost after deducting the surplus in the savings / current account from the outstanding home loan account. This, borrowers would derive the benefit of making prepayments without sacrificing liquidity.

WHO SHOULD OPT FOR IT?

Borrowers having regular savings from a monthly income.
Double income families with surplus funds.
Business owners who get excess funds periodically.