Home Loan Overdraft Facility
Last Updated : March 20, 2020, 3:14 p.m.
Flexibility is vital to the sustenance of any financial service, be it a home loan, in times of increasing competition amongst lenders and emerging needs of the customers. To keep with the challenging times, banks have introduced a home loan overdraft facility to give customers the flexibility they want to meet their emergency needs. As a customer, you will continue to service the Equated Monthly Installment (EMI) as you do in a normal home loan. The difference is you have the flexibility to deposit surplus funds in a savings or current account linked to your home loan account. On depositing the surplus amount, the outstanding balance will reduce and so do the interest obligations. Any withdrawal will add to the outstanding balance and increase the principal component of the EMI, which will, however, remain the same during both deposit and withdrawal. The rate of interest can be slightly higher compared to a normal home loan.
This is nothing but a 2.0 version of the home loan part payment. You can deposit and withdraw the same from a home loan overdraft facility, unlike a normal part payment where the surplus funds go into making home loan payments alone. So, this is clearly for those seeking liquidity else servicing debt obligations at a higher rate won’t be of any worth.
These Banks Offer the Best Home Loan Overdraft Facility to You!
There are quite a few banks that oblige to this growing need of home loan overdraft facility. So what are you waiting for? Just read this post and see the banks that have the best offers for you!
SBI Maxgain
The country’s largest lender State Bank of India (SBI) leads the pack with its Maxgain product suitably designed to meet all your emergency needs. Check out the rates it offers for different professionals under this scheme.
Interest Rates (In Per Annum) for Salaried Borrowers
| Home Loan Amount (In INR) | Women | Others |
|---|---|---|
| Above 20 Lakh to 30 Lakh | 8.15%-8.25% | 8.20%-8.30% |
| Above 30 Lakh to 75 Lakh | 8.40%-8.50% | 8.45%-8.55% |
| Above 75 Lakh to 3 Crore | 8.50%-8.60% | 8.55%-8.65% |
Interest Rates (In Per Annum) for Non-salaried Borrowers
| Home Loan Amount (In INR) | Women | Others |
|---|---|---|
| Above 20 Lakh to 30 Lakh | 8.30%-8.40% | 8.35%-8.45% |
| Above 30 Lakh to 75 Lakh | 8.55%-8.65% | 8.60%-8.70% |
| Above 75 Lakh to 3 Crore | 8.65%-8.75% | 8.70%-8.80% |
ICICI Bank Home Loan Overdraft
ICICI Bank also offers a home loan overdraft facility to its existing home loan customers, along with those making balance transfers. However, you must have a salary account with ICICI Bank or be working in select corporates to avail of this offer. The private lending leader has not disclosed the interest rate and will levy the same based on the quantum of loan, the type of employment, as well as the earnings of individuals. The loan amount offered under this facility ranges from 5 lakh to 1 crore.
Axis Bank Super Saver Home Loan
Axis Bank has branded its home loan overdraft facility as Super Saver Home Loan. The deposit of surplus funds into the super saver account will reduce the principal outstanding and the interest will be charged on the net outstanding balance (Principal Outstanding Before Parking Funds – the Funds Parked to the Super Saver Account). The withdrawal amount will subsequently add to the principal outstanding. You can get a minimum loan of INR 50 lakh and a maximum of 22 years# to pay your debt obligations. No prepayment charges will be levied.
The interest rate will be based on the floating rate. Axis Bank has started using the RBI repo rate as the benchmark to price home loans. As of now, the repo rate stands at 5.15%. The bank charges a spread of 3.40%-4.05% over the repo rate for salaried professionals. This takes the overall rate to 8.55%-9.20% per annum. Self-employed will have an increased spread of 3.50%-4.25% over the repo rate, taking the overall rate to 8.65%-9.40% p.a. The interest rate on a home loan overdraft facility can be higher than what’s shown above.
Canara Bank Home Loan Plus
Canara Bank also offers an overdraft facility to customers availing a home loan or wanting to do so. Individuals having run a home loan account satisfactorily for one year will be eligible for the overdraft facility. Salaried borrowers can get a maximum loan equating to the gross salary of 10 months. However, the maximum loan is limited to INR 25 lakh. Banks calculate the quantum of loan in a manner that the combined liability of the borrower under the housing loan and the proposed home loan plus won’t exceed 75% of the value of the property. Net take home shall not be below 40% of the gross salary post the deductions of EMI under the existing home loan and Home Loan Plus. Non-salaried borrowers can get a maximum loan at upto 75% of 3 years average gross income. The maximum lending amount, however, equals INR 25 lakh.The loan quantum is ascertained in a manner that the combined liability of the borrower under the housing loan and the proposed home loan plus won’t exceed 75% of the value of the property. The annual EMI will not be above 50% of the annual income as per ITR or ITAO during the past financial year. The rate of interest ranges from 9.10%-11.15% per annum.