Is overdraft savings really reducing loan interest?
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Before assuming that the overdraft savings balance directly reduces interest on the outstanding loan, what other things should I verify regarding whether Bank of Baroda applies a daily reducing balance calculation, any minimum balance rules, or hidden overdraft-related charges that could affect the actual EMI–principal split?
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Be sure to confirm a few details with Bank of Baroda before using your savings to cut down loan interest. Inquire whether the interest is compounded daily, as this method typically maximizes your savings. Also, make sure there aren't any hidden fees or "minimum balance" rules for that specific account. You want to ensure that keeping your money there truly lowers your interest without hidden fees or penalties.