Everything you need to know about ‘Home Loan Overdraft Facility’
Recently, The Economic Times published an article covering the home loan overdraft facility and its ramifications for customers. The article talks in detail with regards to how to opt for the overdraft facility, how the overdraft facility works, why it may or may not be useful to you, and talks about its disadvantages as well. Given that home loans with overdraft facilities typically have a higher interest rate, the article also explains how to conduct a cost-benefit analysis and see for yourself if your savings are higher than the cost of the original loan. The article explains about clearing your existing loans, improving your CIBIL score, taking joint loans, step-up home loans, longer tenure of home loans, and more.
Amit Prakash, Principal Partners at Square Capital and a matter expert goes on to explain in simple terms about overdraft facility. He elaborates by adding that the Overdraft facility is much like a current account with an overdraft where any excess money is treated as a prepayment against the loan as long as the money is parked in the account. You can know a lot more by going through the article – like why home loan aspirants should repay their existing loans and close all loan accounts by taking the loan closure. Moreover, they should also ensure that their CIBIL score is updated. There are various things to take into consideration like always clearing EMI and credit card dues on time, keeping a low credit utilization ratio, avoiding defaults and loan settlements, and checking for errors in your credit report, which could be the main culprit behind your low score.
The article provides great in-depth insight into overdraft facility and home loan eligibility. Read further to know more about the subject.
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