Amount Debited from SBI Maxgain against SBI GEN PROPERTY INSURANCE

Hi All,
An amount of approx 21k is debited from my SBI Maxgain account against”SBI GEN PROPERTY INSURANCE”and that too without any intimation about the same. When I ask the Bank about the same, they said that it is mandatory to have property insurance if you avail the loan for a property from the bank. I found it very unprofessional on the bank’s side to sell me the product without even thinking it necessary to inform me about the same. Pls suggest if it is mandatory to go for the Propery Insurance and is it true for all the banks offering the Home loans. Is there any way to ask the bank to refund my money?

Thanks in Advance.
Brgds
Parag

39 CommentsAdd Comment

  1. devsb11

    I too need similar information. My flat is under-construction. SBI told me that I will have to pay property insurance premium after possession of the property (around Rs 20000) which will be going to happen in next 5-6 months. But when I checked my OD account (SBI MAXGAIN) today there is debit of Rs 9339/- with description mentioned as PROP INS RENEWAL FOR SBI GEN. Can someone please explain why they have deducted amount now & whether I can ask them to refund this amount.

  2. anirban8

    Hello guys, Need some information from you. I have an SBI MAXGAIN H/L account for my under-construction apartment (took loan approx 6months back). While applying for H/L I didn’t opt for any personal insurance. But SBI told me there will be a property insurance which is mandatory. But I need to pay the premium only after possession of the property which I am yet to get. But today from my MAXGAIN A/C an amount of Rs. 11695 deducted with description mentioned as General Insurance premium Renewal.
    Can someone throw some light on this? Is it one time or recurring? Why the word “Renewal” is used in the description?

  3. bhadresh

    Hi Ankit,

    >>>I got cancelled my Property insurance from SBI General.
    What actions you took to cancel your property insurance?

    Regards,
    Bhadresh

  4. Sandip Pawar

    “how the loan figure is coming down so heavily in next 4Y? ”
    Yes. That is why I said I am confused on above calculations. I know its somewhat tough to repay so much loan in next 4 years. Repaying 5L per year along with Interest is tough. So in that case, my saving towards interest is gonna increase due to switching to lower spread rate. So I think I should go for switchover the spread rate to lower rate.

  5. Dear Sandip, how the loan figure is coming down so heavily in next 4Y? Yes for the said loan figure, the saving in actual interest outgo ‘ll be that much only as you have calculated.

    thanks

    Ashal

  6. Sandip Pawar

    Dear Ashal,

    My current outstanding Loan is almost 20Lacs, and Loan account is 2 years old only. Outstanding amount would reach to 22Lac soon after final disbursement. Today if I pay 0.56% on outstanding amount (please correct me if I am wrong here), then it would comes around 11200/- This would be one time fees. On doing so, if I say in next 4 years outstanding loan amount is as below:
    2013 – 22L – I would save 0.25% (spread rate) = 5500/-
    2014 – 17L – I would save 0.25% (spread rate) = 4250/-
    2015 – 12L – I would save 0.25% (spread rate) = 3000/-
    2016 – 7L – I would save 0.25% (spread rate) = 1750/-
    Total saved interest on loan in 4 years = 14500/-
    In above calculations, I am little bit confused 😀 :D, but still I feel that paying 0.56% fees and switching over to lower spread of 0.25 from 0.50 is beneficial. What do you feel ? Kindly let me know if my calculations are wrong somewhere.

    -Sandip

    • yuva010

      How did you manage to get it cancelled… I read earlier, you complained to manager and he has escalated it to higher level. But what happened after that …
      You quick response would be helpful to us…

      Regards,

  7. Dear Sandip, the original offered spread to you was 0.5% & current spread is 0.25%. There is very rare chance that SBI ‘ll go lower from this spread i.e. to 0%. In my personal opinion, you may switch to lower spread of 0.25% to get benefit of lower interest rate over all but do remember this change ‘ll cost you 0.56% fee. Please do calculate what ‘ll be your real benefit, if you pay this 0.56% fee upfront.

    Thanks

    Ashal

  8. Sandip Pawar

    Dear Ashal,
    First, Sorry for asking too many queries.

    As you know SBI charges loan interest as “base rate + spread rate”. During loan signing I got spread rate 0.50%.

    If Base rate changes as per RBI rule it gets applied to us immediately. But spread rate remains constant for a loan account. Now SBI has decreased spread rate to 0.25% for new customer. SBI said I can switchover to new spread rate by paying certain fees. But switchover is possible only once in a loan tenure. So even further spread rate decreases in future I cannot go for it 2nd time. So should I do switchover or should wait more with the hope that spread rate would get decrease more ?

Leave a Comment