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POSTED BY ON April 7, 2014 10:18 pm COMMENTS (3)
Dear Ashal
i have sbi maxgain loan rs. 1753000 with roi 10.25% and 18 months moratorium period. Loan disbursement started in oct 2013. My full emi will rs. 18000/-
I have two questions.
1. As all of us know initially major portion goes to interest part and small portion goes to principal part. Suppose my int portion is 15000/- and principal portion is 3000/- and if park rs. 200000/- in maxgain then naturally my 200000/- will be consider as principal payment and hence int outgo will be same even though emi is same, Then what is division of rs. 18000/- towards int payment and principal payment. ?
2) If after 4-5 years my parked amount = outstanding amount, then also my emi will be same but int will be zero being parked amount=outstanding amount . Then as per my understanding whole emi of rs. 18000/- should be adjusted towards principal payment and tenure will be reduced , kindly elaborate the same.
regards
milind
pune
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Please refer below 3 links (all raised by you):
https://www.jagoinvestor.com/forum/sbi-maxgain-tenure-gets-reduced-or-not
https://www.jagoinvestor.com/forum/when-to-put-own-contribution-in-sbi-maxgain-loan
https://www.jagoinvestor.com/forum/query-on-sbi-maxgain-surplus-amount
Dear Milind, the answer provided by dear Viren is very apt, still I’m giving my view as you pointed the query to me. 🙂
1. As all of us know initially major portion goes to interest part and small portion goes to principal part. Suppose my int portion is 15000/- and principal portion is 3000/- and if park rs. 200000/- in maxgain then naturally my 200000/- will be consider as principal payment and hence int outgo will be same even though emi is same, Then what is division of rs. 18000/- towards int payment and principal payment. ?
Due to your parked amount, the interest outgo ‘ll be lower and saved interest from EMI ‘ll become part of already available balance (parked surplus amount of 2L Rs. in your example).
2) If after 4-5 years my parked amount = outstanding amount, then also my emi will be same but int will be zero being parked amount=outstanding amount . Then as per my understanding whole emi of rs. 18000/- should be adjusted towards principal payment and tenure will be reduced , kindly elaborate the same.
No, EMI ‘ll be same but whole EMI ‘ll not be considered for principal repayment. The interest part ‘ll become available balance as usual. As your Drawing Power is now equal to available balance, you can withdraw this interest part of EMI immediately for personal use.
Thanks
Ashal
In normal home loan: EMI = Principal + Interest
For Maxgain:
EMI = Principal + Interest + OD amount
Principal amount is always same in Maxgain. So if the interest component is reduced due to excess cash in OD account, the third component in above equation comes into picture. If interest reduces, to balance the equation, OD amount increases.