Replying to comments teaches me many things, so I want to share one useful learning today. One of the NRI reader called Rahul was facing a strange problem, He had taken a home loan from ICICI bank few year back and now he wanted to pre-pay his home loan. However the problem was that he was outside India and bank wanted him to visit in person to pre-pay the home loan. The other way was to go through a Power of Attorney route which is extremely lengthy process. So Rahul was really stuck, however Manu appeared and shared that he has been pre-paying his home loan by adding his LOAN account as third-party account and then doing a normal NEFT transfer.
One big reason why you should connect your loan account for prepaying your home loan or other kind of loans is because at times we get some spare cash in our life through bonus or some other reason but because prepayment needs some effort and physically going to bank takes away our excitement and all that money finds its way to some other expenses which could have been avoided. I was aware of this trick earlier but really wanted some more confirmations from other readers before writing it and now I have got 3 confirmations from different readers that a LOAN account can be added as third-party account in your online banking account and you can do a NEFT transfer to your loan account. This is a simple and powerful way of pre-paying your home loan or any other kind of loan because it’s at your finger tips and you don’t have to delay the decision of prepaying your loan just because of inconvenience caused by visiting the bank.
Let me share with you some instances where readers have confirmed about this trick -
Proof by Manu on prepaying his loan through NEFT
I have done the similar way for SBI. In the last few months I have paid off a substantial chunk online without visiting the bank – in fact they themselves suggested this option. What Manish said should be possible with ICICI bank. It’s like setting up an account to which you transfer funds – lets say you send some money to your parents every month. You would have added their account in third-party transfer section. Same applies to loan account. Hope this helps.
Proof by Lakshman on prepayment by NEFT
I have a Home loan from state bank of travancore. I have online access to the loan account and part-paying is simply initiating a neft transfer from any of my saving accounts to this loan account. It has been very convenient so far.. Since its online, i can see the outstanding principal amount i have on any given day.
Proof by Pradeep on home loan prepayment by online transfer
Apart from PPF and other instruments, you can make part payment of your home loan or loan EMIs through NEFT also. Well I am doing NEFT transfer to my OBC Home loan a/c every month. Initailly it was paid through post-dated cheque.
Steps of adding your Loan Account to your online Banking account
1. Make sure you have internet banking enabled and the branch where you hold the loan account also accepts the online payments (mostly this is always true)
2. Just like you add a third-party account , in the same manner add your loan account as third-party account so that you can make the NEFT payment later. Once the account gets added , you should be able to see it as one of the added accounts
3. Once the account gets added, you can then make the payments to your loan account , it would be considered as your pre-payment .
Some points
- Note that this online prepayment through NEFT should be possible for all kind of loans, not just home loan.
- Why only pre-payment, you can also pay your regular EMI’s using online options instead of post dated cheques. So ask your bank to allow/enable this option.
- It might happen that this does not work in some banks. But we have seen 3 confirmations from different readers for 3 different banks , so mostly this should work on all the banks.
- If you have bank account and loan account in same bank , it should be more easy process of just linking the accounts, ask your bank on this to guide you.
So If you have a home loan, you should definately explore the idea of connecting your loan account with your bank account so that whenever you have some spare amount , you can quickly prepay the loan by a click of the button , otherwise that “extra” cash can evaporate very soon. Are you going to do this ? Try it out and let us know in comments section if it worked for you .
Also read Online transfer to PPF account through NEFT payment
{ 134 comments… read them below or add one }
Hi All,
I have opted for home loan from IDBI bank.They have a simple procedure .Let me share that information here. First of all they told me to open a savings a/c in IDBI bank . latter they connected my loan a/c with the newly open savings a/c.Now i am transferring the requires amount to the IDBI savings a/c from my another a/c through Net-banking.And IDBI is deducting the required EMI every month’s 10th day. So no going to bank any more. Saving the time and effort. Just thought to share the info with all of u.
Thanks,
Avisek.
Avisek
Thanks for sharing that information with us
. It will really be helpful for everyone and a proof of this tip .
Manish
I had instance where I was paying to my SB a/c just to get a shock, after couple of months, that my SB a/c was freezed due to no transactions !!!.. I was just having online debit & credit…..when enquired was told person who frozed went on leave & didn’t knew about this standing instructions….!!!??? 3 months no entry to loan account & money was lying in SB account…They didn’t even inform me…Since then i pay directly to my loan account via NEFT
Mahesh
thats scray .. the problem of this can be many .. your EMI’s might not reach the bank and this can effectively bring your CIBIL score down ! .. there can be penalties !
Manish
Dear Mr Avisek Das
Its good to know about linking of savings account with Loan A/c. Its good that you are using the same for regular monthly EMI.
However, here the point of discussion is not about paying regular EMI. Mr. Manish is discussing about PRE-PAYMENT or PART-PAYMENT of Loan amount.
Pl. tell us are you using the same facility for any PRE-PAYMENT of loan amount?
Regards, KK Babu
KK Babu
Actually the articles is more on how to connect the accounts so that you can make the prepayments or even regular payments .
Hi All,
Please make a note, though IDBI banks has a ECS facility for your regular EMI payment, it do not allow the Pre-Payment/Part Payment if you plan to do so.
I have my home loan account+saving account both from IDBI bank linked up, but sad to understand they do not allow the Online Pre-payment/part payment facility neither by Third Party Transfer or NEFT.One has to visit the respective IDBI branch in person for completing the procedure for pre/part payment.
Regards,Vidyanand Nayak
Thanks for that information !
I second to what Mr Vidyanand Nayak has said.
I was also told by IDBI that i need to visit the branch to pre-pay the loan and online option is not available!
Regards
Swaroop
It might be the case with some banks
Dear Manish,
Excellent information as usual. However, most of the banks charge an avg of 4% as pre-payment charges. If I pay some spare funds apart from my regular EMI amount, month on month, how are they gonna calculate pre-payment charges ?
Will it be on every extra installment I make or on the total amount I have paid till the end apart of the EMI’s ?
As such prepayment is not like automatic fund transfer in most banks.
As most bank still charge prepayment penalty(even after RBI advise and few banks nullified it), it is required that you intimate them first before hand and find out the penalty amount. then one can make a transfer for the total amount(Prepayment + Penalty).
This is the process i follow for prepayment in mu ING Vysya home loan account.
As regards how the amount is treated, normally banks treat it as principal paid after the current instalment period. One can see the benefit from the next cycle onwards.
Thanks Manish, for the useful input.
Rohit
But those prepayment penalty is more for a lumpsum payment , right ? Most of the banks allow upto a limit each month like upto 1 month EMI per month , so if your EMI is 30k per month and you prepay additional 30K per month , then its allowed without any penalty amount . Is it not the case with your bank ? or my understanding is not right ?
Manish
Indeed. Actually Banks have no limits (at least with IOB and SBI) on the monthly pre-payment. The interest is calculated on reducing basis so any amount excess of the planned EMI is accepted and the principal reduces so the future interest reduces as well.
I have a homeloan and savings account with ICICI. I tried to add the HL account as a 3rd party account, seems ICICI currently does not allow this. Tried to add it as a ICICI Bank account, but the problem is with the LOAN account number failing validation. Please let me know, if someone has managed this with ICICI Bank.
Ashwin
Sadly .. i guess ICICI has issue with this, even the guy whom i was helping in this , he also had ICICI bank loan and this was not possible with him.
request on ICICI netbanking(thru U R saving account) website for adding Loan account/link LA to your regular savings account.This will do.I did.
Ashwin
Look at yogesh suggestion and act on it , let us know if that worked or not ?
I’ve added PNB home loan to ICICI savings account online and prepay using NEFT. ICICI website has a problem in validation as they don’t accept account numbers with alphabets in them. To add my PNB homeloan account, which had alphabets, I had written an email. They said initially that they just can’t do it. But after some days, when I tried they seem to have disabled the validation JavaScript for NEFT transactions. Looks like they still do the validation for intra ICICI transfers.
Hi Manish,
Both my savings and loan account with ICICI are already linked, but I still cannot do a part payment. This is a big issue with ICICI bank. I have contacted them through Facebook/email as well, but still awaiting any response from them.
Yogesh – How do we go about after linking the accounts, I mean how do we do the payment to the loan account from savings account. I tried doing it, but it does not let me select my loan account to transfer the amount.
I also hava a homeloan & saving account with ICICI bank and last saturday I visited a branch & enquired about the same. I got the reply that you can’t do online ransfer from saving to homeloan account and have to visit branch every time for pre partpayment(s).
One more thing I come to know that we can’t do partpayment less than the regular EMI. ie, if a person is paying Rs 25,000 EMI then the partpayment amount should be Rs. 25,001 or more, we can’t do partpayment less than or equal to Rs. 25,000.
That may be very specific rule of ICICI . There is no such requirements from all the banks
Hi Manish,
I have been using this option in SBI since 2 years. It is indeed very useful.
Regards,
Dhaval
Thanks for confirming Dhaval
Can you give more info on this ? Is your bank and loan account both into same SBI bank ? or different bank ? Are you aware if its get ugly if one has loan and bank account in different banks
Manish
Hi Manish,
I have loan account in SBI and i am transferring from HDFC. One important thing is , one has to select account type “Overdraft” and then you go.
Regards,
Dhaval
Dhaval
You mean at the time when we have to select “type of account” , that has to be choosen as “Overdraft” , right ?
Hi Manish,
My loan account in SBI shows as an OD account. I am yet to try transferring to my loan account though. Both my SB and Loan accounts are with SBI. Will be sure to try it.
Can you please let me know how this amount will affect the interest paid? I mean, will there be a difference between the interest paid without such prepayments and the interest paid with prepayments? And if the interest amount will decrease, any idea how I can check this?
Thanks,
Pearlie.
Pearlie,
The extra prepayment reduces your outstanding principal. You have two options after this:
- Reduce the tenure and keep the same emi.
- Keep the same tenure and reduce the emi.
In both the cases, your interest goes down since you don’t need to pay any interest on the amount that you paid in advanc.e
Pearlie
When you pay EMI , it repays your principle and interest , but when you PREPAY , then it goes towards your loan outstanding (principle) , hence brining down your interest in long run , which is better
Manish
Pearlie
When you pay EMI , it repays your principle and interest , but when you PREPAY , then it goes towards your loan outstanding (principle) , hence brining down your interest in long run , which is better
Manish
Thanks Elbis, Manish
Really appreciate your quick response and for providing me with additional incentive to prepay my loan!
Hi Dhaval,
I have been paying my EMIs for SBI loan through online transfer since last year.
I have not yet tried to pay an amount greater than my EMI, which I am planning to do now.
But I do not see any option like ‘Overdraft’ when I try to add this account. Note that I am trying to transfer from a Citibank account. It has only two options Savings and Current for account type.
Do you happen to know if the ‘Overdraft’ type is a must for transferring extra amount? Or can I just transfer this extra amount as I have been transferring the EMIs till now and it should be enough?
A very good information indeed.
It is always helpful to link loan account via netbanking. Even small amount pre-paid multiple times a year can save a lot in ling run.
Also – a customer should try to negotiate the removal of pre-payment charges. In some cases banks do remove it – even though they might be present in the initial documents.
Additional point – linkages of account in the same bank. Earlier I have heard stories where the credit card amount was auto deducted from the linked savings account. Even when the cardholders were in need of money and withhold the credit card payment till next month. So read the fine print carefully before starting the auto deduct facility.
Ashish
Correction “Even when the cardholders were in need of money and WANTED TO withhold the credit card payment till next month.”
Thanks for your views Ashish
I agree that it has convinience factor but along with that some fine prints are there which one should be aware of !
Manish
Hi,
I have taken home loan from LIC housing finance. I dont think I can do NEFT payments for the same anytime online, as LIC is not a bank.
Is there any way to do this, other than going physically and giving cheques?
Regards,
Jassi
Jassi
Yea that can be an issue .. however you must have a loan account number , try adding it as third party atleast. . see if it gets added or not .. Mostly it should fail, but atleast try and see what happens , if it gets added ,then you can try to make a prepayment of Rs 100 to test
Tried. Cant add as LIC is not a bank and has no IFSC code. :’(
Same case here. Tried adding LIC HF to ICICI/ HDFC/ SBI accounts – no success.
Dear Manish
First of all thanks again for starting an excellent discussion,
online transfer for loan pre-payment will save so much time and effort for working individuals who cannot afford to run after home loan companies even to repay their loan. Myself i am currently out of country and looking for mechanism to pre-pay my homeloan with LIC housing finance…it would be great if we get solution for this…alternately i have kept 2 signed cheques with my freind to drop into their office…but the above mentioned option if works out would be the best for me…
What is your opinion on ‘home-saver’ type of accounts that are offered by SCB and others? You can park extra funds in the linked savings account, the interest due is subtracted from the EMI. In case you want to withdraw money, you can always do it.
Would like to hear your opinion on this. Thank you,
Joseph
Will have to do some analysis on this .. But is there anything which is not looking right to you ?
PS : read your flipkart article .. good one .. agree with you . I am also a loyal customer of Flipkart, even though they are not cheapest every time
Joseph,
Even SBI has similar scheme – MAXGAIN where the home loan will be considered as an overdraft account and deposits can be made to this account which will reduce the Interest amount. HSBC also has similar option.
These schemes provide dual advantage – one the deposit gets the same rate as the loan & 2 -> the deposited amount can be withdrawn at anypoint giving an excellent liquidity. It is as good as prepaying but the customer can withdraw the prepaid amount at any point of time.
Regards,
Hari.
Hi Manish,
I have car loan which taken 2 years back from SBI for a term of 3 years. I was repaying the EMIs through PDCs. As only 24 PDCs were given to the bank, I’ve received a communication from the bank asking me to fill up the ECS madate form & give 6 ‘blank’ signed cheques as security. When I visited SBI with 12 PDCs for the remaining tenure, they accepted only 1 cheque for Feb 2012 and asked me to go for ECS since RBI has made it mandatory and SBI has stopped accepting PDCs.
Is there any directive from the RBI making ECS mandatory? Is it safe to give signed blank cheques to SBI? Can I have any confidence after parting signed blank cheques to a bank which can’t even print my name correctly in the letter addressed to me?
Anil
I dont think its still mandatory (not sure) , but this article gives some pointers http://articles.economictimes.indiatimes.com/2011-10-30/news/30338942_1_ecs-sponsor-banks-destination-bank
However now a days most of the people pay their loans through ECS mandate only , its green and easy way .. if they are asking for PDC , I think it can be given if you keep the proofs of it and also what you can do is , give PDC and then direct your bank to NOT honour those cheuqe (give the cheque number)
Manish
Thanks Manish.
Even I had thought about giving the blank PDC but directing my bank not to honour those cheques.
good
Well, I took SBI car loan 16 mons back, and they linked the loan account to my then already existing savings acct. I was also asked to submit around 20 PDCs but they asked me to fill all the acc payee,future dates,and all the necessary stuffs in the cheque, thus I am worried of its misuse since its not signed blank cheques. Also, thru net banking I could see the account statements for the loan account with details like reducing interests by month, outstanding principle,etc which really is beneficial as I had never visited the branch since the loan got sanctioned, everything online!. I new third party transfer for pre-payment of loans is possible, but didnt felt to do. Reading your post, it is making me tempted to try out. Very informative post indeed and all the best for your work to educate all the people.
Though not related to home loans, you might be aware that credit card bills also can be paid through NEFT transfer. I feel this is lot more easier than paying through cheques or through bill desk payments as you dont want to go through the pain of filling ur credit card nos (sometimes thinking what if i had entered the wrong one in a hurry!). I am using this for the past 2-3 months and its very useful.
I feel RBI is introducing lot of reforms in banking space but it is not percolating to the bottom level much or rather people are not using it?
Deiva
Deivasigamani
I pay my ICICI credit card bill directly from ICICI bank internet account , havent added it from other bank , but i can see that it should be possible
Manish
I took a credit card from a different bank as i dont want to auto-link my accounts. Initially it was some what pain to pay this (as writing cheque and finding a drop box etc..) but now its super cool..
great
I have been paying my credit card amounts via NEFT and it gets credited on the same day of transfer. It’s great.
Plus I can schedule the NEFT payment from ICICI netbanking.
So as soon as I get the credit card statement, I schedule the payment via NEFT one day before the due date. No more remembering of due dates.
Anand
Great .. good that you shared that .. I pay my icici credit card bill directly from internet banking itself . Most of the banks allow it from their portal itself .
Manish
I pay my Citibank cc bill via HDFC Bank’s net banking.NEFT…it is very convenient
Hi,
I have homeloan with ICICI and loan payment is done thru OBC bank. I have checked with ICICI customer care for adding the loan A/C as third party. They have confirmed that I can add the Loan A/C as third party only if I was paying thru ICICI bank and not any other bank. Also customer care, has indicated, that prepayment is possible thru physically visitint the branch.
Anybody having ICICI homeloan pls confirm if prepayment ids possible.
Hi Manish
Thanks for your detailed and informative post.
I will like to share my experience also. I have a SBI Max gain home loan. While obtaining a home loan itself, SBI opened an current account styled account with a Debit card and chq book. As per the product feature, whatever amount is deposited by me in the account, gets auto-adjusted against the principal o/s balance, for calculation of interest. What I usually do is that whatever amount I have on hand as surplus/ is a part of my contingency fund, I put in that account (effective opportunity gain is the rate of interest on home loan, in such case)
All in all, I could link my ICICI Bank savings account very easily with my SBI Maxgain account.
Abhinav
Ok great … So one more proof of this ..
Some people are facing issue to connect their ICICI Loan with other bank accounts , looks like ICICI Bank does not allow it ,do you have any idea on this ?
Manish,
Can you please help us to understand what is Max Gain Account? I have SBI Home loan with max gain account. Please tell us how to make good use of it.
Vassu
Read this : http://www.jagoinvestor.com/forum/how-to-maximize-the-gains-in-sbi-maxgain-homeloan-account/2635/
My home loan is from SBI and in case of SBI, even adding loan account as third party is not needed. because when we logon to internet banking of SBI it shows saving account as well as loan account. So while transferring it has option of ” Transfer to own account”. If we choose that option we can transfer money from saving to loan account..SO SIMPLE
Yes, SBI makes it really convenient! I agree they create a lot of fuss while taking a loan with them, but once the initial formalities are complete, SBI is really a piece of cake! As with Sushil, all I needed to do was make a Fund Transfer to my own account and transfer the amount. No hassle of even linking account or any such thing
I really don’t understand why people want to take a home loan with banks like ICICI!
Kudos to SBI for making life so simple
Very informative article Manish.
One relevant thing to keep in mind while making prepayments is the reducing nature of your loan. If it is daily reducing, you should prepay the moment you have free cash. If it is monthly reducing (which is the case in most of the loans), you can wait for the scheduled date when the bank calculates the interest and deploy the cash elsewhere.
Dear Manish
I always follow your website, some really nice information comes up. Now relating to topic, I have a NRI home loan from HDFC ltd(Housing finance not bank). When i open my loan account on internet they have a option of pay online, but when i called up their customer support to check if i can make a pre payment online they advised me against doing that as they require another document as well stating if you want to reduce your tenure or EMI amount. Hence it is not advisable to pay online . If you have knowledge on this please share.
Regards
kunal
Hi Manish,
Please share your view on the same, I got similar reply from employee of HDFC Ltd. on e-mail that I have to visit personally the branch for pre payment when I checked with them , if I can pre pay my home loan with NEFT transfer, Is it correct procedure to be followed by bank?
Kunal
I am not sure on this , but there should be a default option in this , I mean if you prepay then they should either decrease the tenure or decrease the EMI anyways .. one thing they will do . .
I would say why not try prepaying 1,000
and see what happens
Manish,
I too have a housing loan with HDFC. Recently, I pre-paid a part of my housing loan in person through my mother. No, they do not have online option of for part prepayment of housing loan.
In fact, they even revoked the facility of online payment of monthly EMIs (earlier they had with 100/- fee). Now, you have to pre-register to pay online even the EMIs which is allowed on an intermittent basis only.
Irony is, you don’t have even get to see the updated principal based on the EMIs… the online site still shows the original Principal borrowed. this screws up my intuit money networth calculation…
Looks like, they want to frustrate the borrower as much as possible in order to avoid pre-payment of principal
(
Chennaivaasi
thanks for sharing that .. NO idea why such a big bank does like that .. they are called father of HOME LOANS .. anyways .. did you check all the options and still not able to do this ?
Yes, did extensive research and effort on exploring options, nothing worked out…:-(
Agree with you. Trapped with HDFC.
True – I checked with HDFC and they told that there are no options to link and pay through NEFT
Hi Manish,
I have home loan from HDFC and HDFC does not allow online prepayment. Secondly the prepayment amount has to be more than 2 EMIs. Strange but true.
Good to hear that SBI and other nationalized banks allow this facility. Trapped with HDFC now.
Regards
Atul
Hi Manish,
Thank you very much for the wonderful post, after reading the post that NEFT transfer is possible for pre payments at so many loan providers, I chased HDFC LTD to provide the facilty, after exchanging few e-mails they provided me account details of one company account for wire transfer and I made payment to the account, and send details of payment to mentioned e-mail, in 4-5 days the payment got credited to my loan account. feeling sense of achievement and sense of freedom to be able to make payment towards prepayment sitting at comfort of home and not have to be in India for that
Good to hear that
. now you can make the payments on the go and whenever the money is in your account !
i would like to know the process of online payment of hdfc home loan.
Axis bank does not have this option.
From them later in 2011:
For part payment in home loan account prepayment charges are nil. You can visit any nearest ASC and submit cheque for part payment.
Further, part payment amount should be more than two installments amount and can be accepted once in-between two installments date.
After part payment we will reset the loan account with same EMI amount and reduction in tenure and process will require 10 working days.
Cheque Favouring :”Axis Bank Ltd, Loan A/C No._______________ .”
kindly be informed online transfer of funds to loan account is not available. Kindly confirm the same.
Thanks Gaurav for sharing. After reading this article, I though of dropping an email to Axis, but, then I saw your comment.
If online payment is not possible you can always send a physical check to the bank branch by post. From USA you can send a regular USPS Post to India by paying just $1.76. It takes normally 14 days to reach India. I have used this option 2-3 times.
Thanks for sharing that info
Hello Manish,
Adding further, Even the education loan repayment can be done online same way.
I did it by adding my SBI loan account with SBI/ICICI saving account online.
Addionally,
I remember I used to repay credit card bills by adding card numbers as saving account and transfer money online. This one I used 3 yrs back when visa credit card transfer option not there. I did it for ABNAMRO, ICICI, HSBC, HDFC credit cards hassle free.
I think people should giv a try online before taking the hassle of approching bank branches for repayments. Loads of time cud be saved.
Happy sharing !!
Regards
Rajendra
Rajendra
Thanks for adding your comment . your experience will help others
Hi Manish
Good and informative article. I too have availed this facility about 4 years back. this was for my car loan. I used to transfer money regularly from ICICI bank in one city to State bank of Patiala A/C in another city. In the end too I finished off the whole loan by the same method.
Keep up ur good job
dr kishan
Thanks Dr Kishan
to inform about this .
Has anyone tried this with bank of baroda?
Tarun
Are you holding BOB ? Better you try it .. nothing to loose ?
Hi Manish,
I tried to add my BOB loan account to my BOB saving account through BOB internet banking but it did not allow me to do so.
I have added BOB loan account as third party transfer for NEFT to my ICICI bank account now and will try to transfer some amount to BOB loan account and will confirm.
Thanks for this information.
Tarun
Anyone tried NEFT tranfer from HDFC bank Savings account to HDFC Home Loan account? I tried but not able to setup.
I have taken car loan in 2011 summer in SBI bank. They opened a savings account along with the loan. There is also a separate Loan account number. I have added this load account number to my Citibank account as payee and i now pay my EMIs every month through NEFT transfer.
thats great .. thanks for sharing that .. I guess you must be paying it through ECS and not manually each month ?
No, i do it manually. I check the availability of funds , adjust if needed and transfer before the EMI date.
Also for ECS i had to fill the ECS form and personally submit in the bank. This they informed me little later and after that i really never bothered to do that since i was managing it with the manual transfer.
Yes. I have tried it with bank of baroda and its working.
Ankit
Thanks for confirming this
Hi Ankit,
Can you please tell me how exactly you have done this? Have you transferred the amount from some other Bank account to BOB loan account or something else? Plz elaborate a bit.
Regards
Tarun
Hi Ankit
I have an Bank of Baroda home loan a/c do you think if i add the same to my citibank as an NEFT Payee..I should be able to make prepayment
please reply at the earliest
Tejas
Yes, that should be possible , why dont you try it atleast .. in worst case it wont work , thats all !
Hi Manish,
I have been doing such transfer from past 2 years or so, without visiting them single time after submitting documents for possession. I have my home loan account with SBI.
Some banks gives overdraft facilities as well (SBI surely does) so if you wish you can withdraw pre-paid money later, if needed, and enjoy relaxation on interest amount for deposited time due to reduced outstanding.
Thanks,
Harsh
Good to know that .. some other readers have also confirmed this overdraft facility
Hi Manish,
I had education loan with SBI earlier and used to repay using this NEFT option.
Regards,
Durga Prasad.
Durga
but from which bank ? was is SBI to SBI ?
I like the points mentioned about home loan but may be this link provide you more details http://www.dialabank.com
Thansk Alisha
I have a Citibank Home Loan. I have tried to contact them multiple times regarding this, but have not got any clear response. Below is the email response that I finally got from them -
——————————————————————————-
Dear Mr. Tewari,
This is with reference to your query dated February 07, 2012.
We understand that you choose to make part payment towards your home loan account. We regret that simulated part payment details cannot be provided as the interest rates are highly volatile. However, we have provided the norms applicable for part payments for your reference.
Part payments will be adjusted against the Principal outstanding of the loan. Part payment can be made for any amount greater than the Equated Monthly Instalment (EMI) amount.
For online part payment, the part payment amount has to be a minimum of 3 times the EMI amount. Part payment can be made leaving a minimum of 12 EMIs payable in the loan. Pre-closure of loan will attract loan pre-closure charges.
If a loan is pre-closed within 12 months from the date of making part payment, pre closure ( pre payment) charges will be applicable on the part-payment made considering the completion of entire 12 months and not the dates.
Part payment amount can be sent as a demand draft to the below-mentioned address. The Draft is to be drawn in favour of “Citibank N.A. loan account number *****”. Citibank N.A Mail RoomNo.2, Club House RoadChennai 600 002 Please revert us for any further clarification.
Thank you for accessing Citibank Online.
Sincerely,
——————————————————————————-
They have set the limit high enough so that I cannot be met easily.
Also, its been almost a year since I have been following up with them to change the ECS date from 01st of every month to 05th or later. They have clearly said that this cannot be done. I am yet to understand the reasoning behind this.
Does anyone else have a experience to share ?
-Ashutosh
Ashutosh
Better discuss it on our forum for better answers and more experiences : http://www.jagoinvestor.com/forum/
Done.
Hi,
I transferred a small amount from my ICICI bank saving account to my BOB loan account. The amount got transferred and reduced from the Principal amount. But on the following EMI due date, EMI deducted by bank is reduced by the amount I transferred through NEFT. Can anyone please explain me the reason?
Regards
Tarun
Tarun
Can you put numbers and rephare the issue .
Hi,
My EMI is Rs. 30000 and it is payable on every 15th of the month. Just for experiment, I transferred Rs. 500 on 04/03/2012 to my BOB bank loan account through ICICI saving bank account through NEFT. My loan balance got reduced by Rs. 500 from 04/03/2012 (adjusted towards Principal)
But today when I saw the EMI amount, it was Rs. 29500 (30000-500).
Although the interest charged is calculated as per my reduced outstanding balances.
Regards
Tarun
Tarun
I guess your BOB is assuming this Rs 500 as advance payment for EMI and not as prepayment . Thats the reason they deducted rest of EMI (29500) . Better ask for explaination from BOB now .. also see in comments section who else succeeded in making prepayment for his BOB loan account, i can connect you to him/her if required to know more on this .
Thanks Manish.
I posted a query on BOB customer care but they are not even aware that funds can be transferred to loan account via NEFT. They have told me that funds cannot be transferred to Loan account via NEFT. And even if I will ask in the branch, I will get the same reply for sure.
I have gone through all the comments and Mr. Ankit has successfully transferred the amount to BOB account.
Regards
Tarun
Tarun
I have connect you to ankit on email. I guess you should start a thread on our forum now : jagoinvestor.com/forum
Thanks Manish…
Even Credit Cards balance payment can made using NEFT.
Just wanted to bring this to your notice as this may be helpful to people.
Rahul
Thanks !
. Any kind of loans (cc) can be paid through NEFT !
Hi Manish and Readers,
I am planning for a Home loan from SBI and had given the application.If I can get the SBI Maxgain(Manager told he need to verify) , I had a question.
If I want to make a permanent pre-payment and do not want to withdraw it from MaxGain account anytime in future , Is that Possible?How to do it online?
For example , I had 2 lakhs surplus with me.Can I pay 1 lakh permanently and keep 1 lakh in OverDraft account so that I can withdraw this 1 lakh in case of emergency?
Manish , as you are also customer of same bank , can you clear my doubt and advise me the best way to proceed for SBI Home loan?
Ravi
I am not a customer of SBI
.. I think this question needs more views and its better to post it on our forum : http://www.jagoinvestor.com/forum
Hi Manish, thanks for all the articles and replies to our questions. i have a question… i wish to make part payment to my sbi home loan account. i am having onlinesbi account with the facility to transfer fund. my intention is to reduce the period of emi and maintain the monthly emi amount as is. how to instruct the bankers wihtout going to racpc in person.
Haribhaskar
I think by default , they will reduce the tenure only .. how is your EMI going ? If its going through ECS or PDC , anyways they will keep cutting same EMI
Manish
Hi Manish.. Thanks for your response. In fact, I visited RACPC, Chennai on 16.04.2012. I am surprised to see the good response from the working under, Mrs. Bharathi, DGM. The lady staff, missed her name, she briefed me all about the concept and suggested a way out of reducing the No. of Months of EMI by suitably increasing the EMI. It was my misconception that SBI doesn’t serve properly. I take back my words. Thanks to SBI, RACPC for good response and making thinks easier for people who have availed home loan. I have reduced my EMI period from 180 to 108 months by a small increase of 1,000 pm in EMI. Happy over all. Thanks Manish…
Haribhashkar
Good to hear that ..
Hello,
I tried to link My HDFC Loan account to HDFC saving account.
But it failed to add account because while registration, 14 digit acc. no. is necessary.
And the home loan acc. no. is only 9 digit.
Please let me know if i am doing anything wrong.
Thanks & Regards,
MSharad.
No , I think that can be the reason .. This will not work in all the cases like yours
Hi I have a loan account in LICHFL.
Please tell me can I link my LICHFL loan account to SBI or ICICI saving accout and can do the pre-payment.I tried to liny my SBI/ICICI saving accout to LICHFL but cant do so. I also cant found the MICR or IFSC code for LICHFL.
Please help.
Amit
Generally there will be issue with non-banking institutions like LICHFL .
Hi
I have made a few part payments online to my SBI loan. Is there a way to check the balance amount online using the loan account number?
Thanks
Nitesh
I want to know if I can know my outstanding amount without visiting the bank.
That information is with Bank only .. you cant get it otherwise
Doesnt it show the “outstanding balance” for you ? Check with bank if its activated
I called the branch and they emailed the electronic statement till date.
If one has a savings account also with SBI then they can get the information by calling the customer care. As I had only loan account, I had to call the specific branch to get the info. I am amazed at the quick response.
Good to hear that ..
Just got the Car Loan from SBI; sanction was fast but disbursement was slow. Younger staff is energetic and helpful but old and lethargic employees are spoiling the image of this bank. Still, I went ahead with SBI (5 yr. tenure) due to Lowest interest rate, Daily Reducing Balance and No Pre Payment charges.
As I hold Saving account with the same branch and now car loan account is linked with it. As soon as disbursement of loan was done by bank; I started paying off outstanding thru “Funds Transfer (Own Account)” facility of SBI Online banking.
Wish to payoff my loan soon.
Good to hear that .. I am sure you will pay off your loan soon . Linked accounts are very convinient as you can pay as you get some money in your account .
I have taken the Home loan from Axis Bank and pay my EMI from ICICI Bank through ECS Facility and want to attach third party account to make the pre payment of my home Loan
Please suggest me for the facility
Prateek Agarwal
Are you not able to connect the loan account with the same Bank account for prepayment also ?
Manish