Home loans top the secured loan segment of a bank’s retail book. To
address the needs of various customers, banks usually come up with variations of
home loans, such as fixed-rate loans, floating-rate loans, fixed-floating loans,
etc. But did you know that there is yet another category of home loans wherein
your surplus funds can be linked to the home loan to reduce the equated monthly
instalment (EMI) outgo? Here is how such a loan works and what it means for
you.
What’s on offer?
To avail this product, you have to link a current or a savings
account to your home loan at the same bank. You can deposit any surplus funds in
this linked account. Whenever you deposit a surplus amount in the account, the
bank considers this amount and deducts it from the principal of your home loan
while calculating the interest on the
