So you’re running a Home Loan for a dream house. You are also an outstanding performer and get rewarded with annual performance bonus by your employer.
Now, what do you plan to do with this bonus money?
First thing that comes to your mind is to make part-prepayment in your home loan to fast-track your home loan repayment. The moment you do that, you part away with the money. Tomorrow, if you need this money for any exigency, would you be able to pull out this money from your home loan account? Alas!! You cannot. That is why making part-prepayment in a home loan is a double whammy.
Every salaried customer faces this problem while he repays his Home Loan.It reduces the future EMIs but incurs more risk in case of emergency situations in future. How about, getting an option to withdraw the extra money you’ve paid on top of your regular monthly payment(EMI) anytime.
Isn’t it an Aha-feeling? Existing Home Loan consumers can transfer their home loan to HomeSaver account.
Yes. Because the interest you are paying on your home loan is likely to be higher than the interest you are able to earn on any fixed deposit account. It’s a good deal to park excess money in such a HomeSaver account rather than park it in bank’s fixed deposit. All you need to do is to put your usual savings, in the current account. Depending on the savings you put in the current account, you can reduce the quantum of interest paid and thereby reduce the tenure of your loan.
The principal on which your loan interest is calculated, is the principal outstanding minus the savings you have deposited in your linked current account every month, over and above your Equated Monthly Instalment (EMI).
Here’s is how this home loan facility functions.
There are several banks in India that offer this facility. It is called by different names like SBI Maxgain, IDBI Bank Interest Saver Home Loan, Standard Chartered HomeSaver, HSBC Smart Home, Axis Bank Super Saver Loan, Citibank Home Credit. Usually this kind of home loans carry upto 0.50% higher interest rate but the interest calculation method can result in significant savings in interest paid and quicker repayment of loan.
If you are seeking further information regarding HomeSaver, we have provided a comparison table below that contains Banks who allow this feature.
You can apply online by filling up this form on the sidebar.