Same EMI. Fewer months. Your money stays yours.
In a savings-linked home loan, whatever sits in the linked savings account is knocked off the loan outstanding every day before interest is worked out. The EMI does not change — more of it simply goes to principal, so the loan ends early. And unlike a prepayment, the money can be withdrawn whenever you need it.
Plan the balance
Blank means the balance above. Set a whole year in one box, or open a year and change single months — a bonus month, a fixed deposit that matures, a year the money goes into a wedding.
Interest you save
Regular loan vs savings-linked
Loan outstanding over time
The gap between the two lines is interest you never pay.
The rate you really pay
You are quoted one rate. Because the linked balance cuts the interest, the loan behaves like a regular loan at a lower rate — same EMI, same shorter tenure. That lower rate is your effective rate.
Year by year
What each year looks like with the balance you planned. Loan outstanding is after the year's last EMI.
| Year | Avg balance kept | Interest · regular | Interest · linked | Saved | Outstanding · linked |
|---|
Month-by-month schedule and summary, as a file Excel, Google Sheets and Numbers all open.
How month one is worked out
The same three steps repeat every month, on that month's outstanding and balance.
Before you sign up
What the brochure does not spell out.
Interest is calculated on each day's closing balance. Money that comes in on the 1st and leaves on the 5th helps for four days only. Enter your realistic average, not your best day.
The benefit is the loan interest you avoid, which at home-loan rates is worth far more than savings-account interest. But it means the account is doing one job, not two.
Some lenders charge a small premium over their regular home-loan rate for the linked version. If the balance you can really keep is small, a cheaper regular loan can come out ahead — run both rates through this page.
Take the money out and the saving stops at once; the loan does not remember it. That flexibility is the whole point — just do not count parked money as money already repaid.
Questions people ask
What is a savings-linked home loan?
A home loan tied to a savings or current account. The balance in that account is set off against the loan outstanding every day, so interest is charged only on the difference. The EMI stays the same, so the saving shows up as a shorter loan.
Does the EMI come down?
No. The EMI is fixed. Because less of it goes to interest, more goes to principal, and the loan closes early. That is why this calculator shows months saved rather than a lower EMI.
Can I withdraw the money?
Yes — that is the point of the product. The moment the balance drops, the interest on that part starts again. Nothing you saved earlier is taken back.
Is it better than prepaying?
Rupee for rupee, money kept in the linked account saves the same interest as a prepayment, as long as it stays there. Prepaying is permanent; parking keeps the money available. If a lender charges a higher rate for the linked version, compare both at their own rates.
Is this the same as an overdraft home loan?
Close, but not always. In an overdraft version the unused limit sits in the loan account itself; in a savings-linked version the money sits in a separate account. The interest arithmetic is the same: outstanding minus balance.