Hi Ashal

I have a home loan from SBI Maxgain for 29L.

5^th June 2013 – 20L was disbursed to the builder

Book Balance – (-2000000)

Available Balance – 900000

7^th June 2013 – Deposited Rs 1000 to OD account

Book Balance – (-1999000)

Available Balance – 901000

30^th June 2013 – Rs 14619 got debited from the OD account as Debit interest ( 5^th June to 30^th June) This amount was deducted from Availbale balance and added to Book balance

Book Balance – (-2013169)

Available Balance – 886831

My EMI date is 5^th July 2013. I would like to know whether the interest for the period 1^st July to 5^th July 2013 will be calculated on the new Book balance (-2013169).

How to avoid this interest on the interest, if this is the process followed for the calculation