Home Loan Overdraft (Maxgain/Smart Save): The Liquidity Hack

In India, we love keeping cash safe. We keep lakhs in Savings Accounts earning 3% or Fixed Deposits earning 6-7% (taxable).

Meanwhile, our Home Loan is draining our wealth at 8.5% or 9% interest.

What if you could have the liquidity of a Savings Account but the interest-saving power of a prepayment? Enter the Home Loan Overdraft (products like SBI Maxgain, BoB Advantage, HSBC Smart Home).

The Problem: The "Locked" Prepayment

In a standard Term Loan, once you prepay ₹5 Lakhs, that money is gone. You gave it to the bank. If you have a medical emergency next month, you cannot ask for it back.

This fear of losing liquidity stops many Indians from prepaying their loans.

The Agitation: The Negative Carry

Keeping ₹5 Lakhs in a Savings Account (3%) while paying a Home Loan (9%) is a negative carry of 6%. You are losing wealth every single day.

The Solution: Parking vs. Paying

An Overdraft Home Loan creates a linked bank account.

• Any money you deposit in this account reduces your Outstanding Principal for interest calculation.
• Crucially: You can withdraw this money anytime via ATM or Cheque.

If you park your Emergency Fund (₹5 Lakhs) in this account:

1. The bank calculates interest on (Loan Balance - ₹5 Lakhs).
2. You save 9% interest on that ₹5 Lakhs instantly.
3. The money is still yours to use.

It is the ultimate financial hack: Interest Savings + 100% Liquidity.

📱 The Amorti Simulation

Visualize the daily savings.

1. Open AmortiApp.
2. Set up your loan details (e.g., ₹50 Lakhs, 9%, 20 Years).
3. Simulate a "Lump Sum Payment" of ₹5 Lakhs today.
4. Look at the "Interest Saved".

In an Overdraft account, simply parking the money yields the exact same interest saving as paying it off in the standard loan simulation.

If the saving is ₹10 Lakhs over the tenure, that is your reward for simply moving money from Account A to Account B.

Make your idle cash work harder.

Calculate Interest Savings