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Estimated reading time: 4 minutes
When considering a home loan, it’s important to explore various features that can enhance your financial flexibility. The HDFC home loan overdraft facility is one such feature that can provide significant advantages. This blog delves into the details of the HDFC home loan overdraft facility. Explain how it works, its benefits, and what you need to know before opting for it.
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Want to reduce your home loan interest payments? We can help you leverage HDFC’s overdraft facility to save more
What is an HDFC Home Loan Overdraft Facility?
The HDFC home loan overdraft facility allows borrowers to convert their home loan into an overdraft account. This means you can deposit surplus funds into your home loan account. Reducing the outstanding principal and thereby lowering the interest burden. You can also withdraw these surplus funds as needed, providing flexibility akin to a savings account.
Features
Feature | Description |
---|---|
Interest Rate | Charged only on the utilized amount |
Loan Amount | From ₹50,000 – ₹10 lakh |
Collateral/Security | Not required |
Loan Amount Eligibility | Up to ₹7.5 lakh for MSMEs with a minimum of 6 years of business experience and ₹10 lakh for those with over 6 years |
Benefits of HDFC Home Loan Overdraft Facility
Reduced Interest Burden
By depositing surplus funds into your home loan account, you can reduce the principal amount and thereby lower the interest charges.
Financial Flexibility
The ability to withdraw surplus funds at any time provides financial flexibility and liquidity, which can be helpful in managing day-to-day expenses and emergencies.
Convenient Management
Managing your home loan becomes easier as you can use the overdraft facility to handle both your loan repayment and savings.
HDFC Home Loan Overdraft Facility Charges
Here are the typical charges associated with the HDFC home loan overdraft facility:
Charge Type | Amount |
---|---|
Processing Fee | Up to 1% of the loan amount, subject to a minimum fee |
Interest Rate | Linked to HDFC’s RPLR (Retail Prime Lending Rate) |
Overdraft Maintenance Fee | As per HDFC’s terms and conditions |
Home Loan With Overdraft Calculator
To effectively manage your finances, Credit Dharma provides an overdraft calculator. This tool helps you estimate the potential interest savings and benefits of converting your home loan into an overdraft account.
Step | Description |
---|---|
Input Loan Amount | Enter your current loan amount. |
Input Surplus Deposits | Enter the amount you plan to deposit into the overdraft account. |
Calculate Savings | The calculator will show the reduced interest liability and the new effective loan amount. |
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Save Lakhs on Your Home Loan with HDFC’s Overdraft Facility
Conclusion
The HDFC home loan overdraft facility offers a unique blend of interest savings and financial flexibility. By understanding how this facility works and its benefits, you can make an informed decision about whether it’s the right option for you. Always consider your financial situation and consult with HDFC to explore this feature further.
Frequently Asked Questions
Yes, HDFC offers an overdraft facility for home loans, allowing borrowers to deposit surplus funds to reduce the outstanding principal and save on interest.
An overdraft facility in a home loan allows borrowers to convert their home loan account into an overdraft account, enabling them to deposit and withdraw surplus funds, thereby reducing the interest burden.
Taking an overdraft on a home loan can be beneficial for managing irregular cash flows and saving on interest costs, but it should be used wisely to avoid financial mismanagement.
The overdraft interest rate in HDFC is linked to the Retail Prime Lending Rate (RPLR) and can vary based on the loan agreement and market conditions. Check with HDFC for the most current rates.