Best Home Loan Tips: Own house, own car — the dream of every middle-class person in the country. To make that dream come true, many people buy a house by taking a home loan. But the calculation shows that if someone pays 8.5% interest per year on a home loan of ₹60 lakh, they end up paying around ₹1.25 crore in 20 years. However, there are some ways where you can save about ₹20 lakh on your home loan. Surprised?
Finance expert Sumit Bangar explained about the home loan overdraft account in a LinkedIn post. He said that instead of keeping money idle in a savings account, one can put it in this overdraft account. While a savings account gives only around 2.5% interest, an overdraft account helps save interest at a rate of about 9%.
How This Smart Loan Strategy Works
Let’s understand it simply. Suppose you take a ₹60 lakh home loan through an overdraft account. The interest rate here is a bit higher — around 9%. Now, instead of keeping ₹8 lakh in your savings account, you deposit it into this overdraft account.
What happens then? Your loan amount reduces to ₹52 lakh. If you keep the same EMI and reduce the loan tenure, your loan can be fully repaid in about 14 years. The best part is, you can withdraw your ₹8 lakh anytime you need it.
A Slightly Higher Rate, But Bigger Savings
Overdraft home loans usually come with 0.25% to 0.5% higher interest than normal home loans. But if your income is steady and you have some savings, this small difference can help you save several lakh rupees in the long run.