Would you suggest to withdraw money from OD account and pre pay the car loan?

Hi Anil,

I have a Max Gain OD home loan recently i have taken car loan. Would you suggest to withdraw money from OD account and pre pay the car loan? Is it even possible? Both the loans are from SBI. I haven’t parked much.

Hi Barnali,
It depends on the interest rate difference on your home loan vs car loan.

If the car Loan interest rate is higher than home loan, it makes sense to pay off the car loan first. And that too if you have parked some money in Maxgain OD.

For e.g. if Home loan is at 10% and car loan is at 12% (assuming car loans rates are always higher), you would gain 2% on the amount that you pre-pay in your car loan directly.

Please note that you can ONLY withdraw your parked funds from maxgain, if and only if, your loan has been fully disbursed or you have taken the possession of your property.

As far as allowing by SBI is concerned, they don’t care about it. They are two separate loans for them and are serviced by two different departments. You take out money from Maxgain and pay it in Car loan account. Its your money.