How to maximize the gains in SBI MaxGain homeloan account?

POSTED BY Kulkarni P ON January 23, 2012 3:11 pm COMMENTS (985)

H all,

I have taken SBI MaxGain housing loan couple of years back but mt using it to maximum extent. Does anyone taking benefit of Overdraft facility of this type of account to reduce the interest? Please share some tips to save interest amount on the hosing loan. I plan to use following technique :

1. Transfer additional amount from my salary account to OD account.

2. Get ATM card for OD account and start using OD ATM card rather than savings account ATM card.

3. All short term amount will be transferred to OD account.

4. As and when needed, use OD cheque book to transfer the money to savings account or even to third party payments(I did not see any option online to transfer money from OD account back to savings account)

Any help will be greatly appeciated if you can help me understand these queries on SBI MaxGain.

Thanks,

Kulkarni

 

985 replies on this article “How to maximize the gains in SBI MaxGain homeloan account?”

  1. theash says:

    Should I invest money in PPF or keep in OD account. Which will give me better returns?

    1. PPF would be a better choice !

  2. Rusty says:

    I have query for MG A/C. My EMI ECS bounced for this month due to some cross issue of cheques and online scheduled transfers. Say my EMI is 59000/- . However, I maintain around Rs 8 Lac in my MG OD A/C.
    On calling the branch as well as RACPC, they are saying nohing to worry as you have more than the EMI amount in your OD A/C.
    I read somewhere that any unpaid EMI will attract interest of 2% pa after 30 days of non-payment of EMI.

    Now, what I am not able to understand is whether this EMI due will be added to my loan records and at sometime in future they will ask for some insane charges or whether interest and principal adjustment will happen this month from my available balance and issue is closed there itself.
    Any help or any experience in this regard would be helpful
    Thanks,
    rusty

    1. Hi Rusty

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  3. Vinod says:

    Need Help
    I have taken the Maxgain SBI home loan along with home loan insurance, in SBI online (net banking) I can see 3 account
    1 is for Home loan account
    2 is for Insurance account
    3 is for Saving account.

    for Home loan account the account type showing as “Cash Credit” when I checked with my other friends for them for home loan account it is showing as “OD” (Over Draft) Account.
    for Insurance account the account type showing as “OD”.
    I went to Bank and asked why “Cash Credit” showing for Loan Account instead of “OD” , Bank people saying both are same only product name is different.

    My question is whether it should be OD for Loan Account or it’s ok for “Cash Credit”.
    For Insurance Account the account type is “OD” it’s ok or it should be something. please suggest.

    Regards,
    Vinod

    1. Gyanadutta says:

      Hi Vinod,
      I too have the same problem. Its showing cash credit AC instead of OD account. Any leads here would be helpful.

  4. Amit says:

    Hi,
    I have loan from LIC which I want to shift to SBI MaxGain, with wife as first owner and me second owner.
    I had below queries:
    1. Savings account is mandatory as per what I read. Will this Savings account and MaxGain account be linked together and have single Online Login? Also, will NetBanking be free?
    2. What will be the charges for NEFT to other banks say HDFC?
    3. No. of Free cheques per year?
    4. Is ATM card given for MaxGain account? If yes, the annual fees for it? Also charges for withdrawal at SBI and non-SBI ATMs?
    5. I have two seperate PPF accounts in my name and wife’s name (just PPF didnt opt for savings account that time). Can I transfer those two PPF accoounts and get it linked to this Joint Savings account?

    1. Jay says:

      1. Yes, the savings account and the maxgain account will be linked. If you get netbanking activated for your maxgain and your savings account then you can see both the accounts under the same login.
      2. Normal NEFT charges apply (same as any other bank)
      3. From what I know they have stopped Cheque and atm for maxgain; you can have it for savings account though. However, netbanking is available for Maxgain, you have to ask them to get it activated by putting an application. Its not activated by default.
      4. Not anymore from what I know. You will have atm for savings account and transfer of funds withing your own accounts is free and Instant.
      5. This you will need to check with Bank.

  5. Parag Kumar says:

    What is MCLR spread? When i approached the bank, they said my existing rate of 9.65 will be converted to 8.8% after paying 0.46 +service tax for outstanding loan amount. When i asked why not 8.3 or 8.2, they said your interest rate is converted to ‘MCLR+spread’ and not ‘MCLR’. I didn’t get if this spread remains constant throughout loan tenure as we had a ‘base rate +x ‘ formula previously where ‘x’ remained constant throughout. Can anyone throw light on this?

    1. Sorry, we are not clear on this at the moment !

    2. rahul says:

      which bank is this ?

  6. Arup says:

    I have a home loan( home saver account) with flexible interest rate of 9.35%. There is a linked current account to it and idle money can be perked there to reduce the share of interest from the emi I am paying. The following dilemma I have

    1) I am keeping money in the home saver account( which doesn’t give me any interest earning) which gives me a savings of 9.35% of the idle money and hence, not able to invest fresh funds into either Mutual fund or trading account. What should be the strategy going forward so that I can finish off the home loan at the earliest and also, can take advantages of investing in the stock market?

  7. tarun Pahuja says:

    Is there an process where an old loan will automatically get converted from base rate to mclr regime without any switching fees?

    1. No, there is nothing like that

      1. Ramnath Gokul says:

        Hi Manish,

        If the outstanding loan amount is lets say 35 lakhs and there is already a balance on 20 Lakhs in the over draft (max gain) account, how is the conversion fee from base rate to mclr calculated? Is the calculated on the total outstanding amount OR on (Outstanding amnt – OD balance)?

        Thank you.

        1. Sorry I am not clear about SBI maxgain that much.

          1. abc says:

            yes, it will be on outstanding amount

  8. SRINIVAS says:

    I took Max gain account with loan amount is 26,10,000 with interest rate 9.4 %
    Tenure is 12 years with emi around 30,300.
    If we keep paying emi starting fom this month ie., sep 2016, the loan will be closed on sep 2028.

    I have downloaded a max gain calculator , In the calculator What i see is
    if I keep adding 10,000 every month as surplus deposit to OD account starting from Jan 2017. The loan tenure is reduced to july 2024. My understanding is that loan will be closed in around 8 years.

    But in some articles, I see that though we keep adding surplus deposit to OD account, neither EMI nor loan tenure gets reduced. If this is correct, then where am I getting benefit here.

    Please correct me if any of my understanding is wrong. Any example with some explanation would be helpful to me.

    1. Jay says:

      Hi Srinivas, I am also a current OD account holder in SBi under maxgain.

      In response to “But in some articles, I see that though we keep adding surplus deposit to OD account, neither EMI nor loan tenure gets reduced. If this is correct, then where am I getting benefit here.”
      SO all that surplus amount you are adding is getting added directly to your principal and hence you are paying the interest rate of 9.4% only on the remaining (ie. outstanding-surplus).

      you are right when you say “neither the emi reduces nor the tenure” BUT, since you are adding surplus everymonth.. a greater portion of ur emi now goes to the principal and less in interest and the interest reduces. Also..in ur case..after 2024 if you continue with EMI and surplus..that will be like adding money to the OD (which now you must be seeing as negative). Anyways..after 2024 you can approach the bank and ask them to close the loan as the book balance wud be the same as the outstanding amount.

      1. Ritesh Kumar Sinha says:

        I would like to comment on this statement:

        “BUT, since you are adding surplus everymonth.. a greater portion of ur emi now goes to the principal and less in interest and the interest reduces.”

        It doesn’t work this way.

        The way it works is like this:

        1. EMI is fixed.
        2. Principal Portion of EMI is fixed.
        3. Interest Portion of EMI is levied only on the BOOK BALANCE which is = (Principal – surplus money parked – savings on interest). To understand “savings on interest”, refer Point 4 below.
        4. EMI (which is fixed) – Principal Portion (which is fixed) – Interest (which varies based on book balance) = X. This X is the Savings on interest. This X gets added to your Book Balance to increase it and therefore reducing your Interest outgo.
        6. So, eventually Book Balance = Outstanding Principal – Surplus money parked – Savings on Interest

  9. pavan says:

    Hi,

    i have taken housing loan from SBI under Maxgain, i had asked for zero moratorium period that means amount to be deducted towards both interest and principal from the day of sanction of the loan. But after 6 months i do observe that the amount is credited towards interest only and the rest is parked in loan account. can this be changed to include payment towards principal as well. if so what is the procedure.

    Thanks,
    pavan

  10. Divyashree says:

    Hi Manish,

    We have taken a home loan from SBP for 20L for 20 years with 8 months moratorium in Nov 2014. During the moratorium period we have paid only interest. Later the EMI started. But the whole amount got disbursed only in march 2016. Now the bank is telling we have to pay some due amount. I am not understanding whether there is any due amount to be paid from our side and the bank people are not responding properly. I can attach the statement for clarity from starting. Can you please help me and let me know if i have to pay any due amount to bank.

    Thanks,
    Divyashree

    1. Its not a straight forward calculation here. Please ask them for explaination on how the dues exist and why ?

      1. Divyashree says:

        Thanks for your reply Manish. But the bank officials are giving a explanation that their system has some fault so it does not show proper numbers hence whatever they are telling is correct. But they are not able to explain any of the numbers.
        Every month on 30th / 31st the Debit interest is put on the account along with some transaction “OD PNLTY INT TXN” for which amount between 100 to 500 is charged every month.

        I am in helpless situation as i don’t know whom can i contact to get everything cleared. I am also thinking will transfer the loan to some other bank as they are not helping.

        Any help would be appreciated.

        Thanks,
        Divyashree

        1. This looks like Overdraft penalty. Did you take any overdraft ?

          ALso bank cant say that “system is showing something …” , They are bound to find out and share about it. Check with their customer care about it and also tell them that you will use RTI etc for this.

          Manish

  11. Tarun says:

    When exemption under 80 C is taken for Stamp duty exemption ,whether stamp duty certificate is to be submitted with it for approval.

    1. No , but you need to keep it at your end, because you might require it later if there is any tax enquiry !

      1. Tarun says:

        Just few more query please, Will be thankfull to you:
        1) the payment of stamp duty was made from my wife account to Builders ACCOUNT from cheque, and from that builder purchase the stamp duty for us . Now can we claim exemption for Stamp duty as final payment to Registrar office was done from builder not us.

        2) i also contribute to my wife account continuously in terms of payment of which i have proof as bank statement of both of us. Can i also take the benefit of the same.

        3) whether the exemption of stamp duty is to be taken in ratio of ownership of property. and can we three of us with mutual agreement endorse on stamp paper that the property is equally divided among three of us, so that we all can take stamp duty exemption.

        1. Tarun says:

          the stamp duty and property is on the name of three people me , my wife and father

        2. 1. Yes, you can claim the stamp duty payment from your side.

          2. NO

          3. Only the person who paid (cheque) it can claim it

  12. Tarun says:

    Supposing 3 people have taken loan jointly on property owned by three of them. But only 2 of them are actually paying EMI, so the income tax benefits for principaland interest payment will have to be shared by all three or if possible only two people can gain benefit of EMI payment.
    IN CASE ONLY TWO PEOPLE want to claim benefit as third is not interested what declaration have to be made.

    1. The claim benefits can be used only by people who are paying it. If one is not paying it, then how will he claim it ?

      1. Tarun says:

        the matter is such that , the complete EMI payment is from my wife account which is almost equal to her salary and as husband and wife living together, we were in a impression that we can equally divide the principle and interest benefit. Is it possible with a certificate or some affidavit

        1. No , unless the EMI is paid from the account and the house is in name of the person, the person cant claim tax benefits

          1. Tarun says:

            Thanks for all the replies , I want to ask that if EMI is not paid from my account that is only paid from my wife account, but i am also the co-owner in the property. In that case, Will I be able to take the benefit of 80 C and 24 C of Income Tax act.

            1. No , unless you pay from your pocket, how can you claim it … ?

            2. Msl says:

              Yes, you can claim tax benefit. you will hv to just giv a declaration that both of you are sharing the EMI, say 50-50 or watevr ratio u prefer.

  13. Tarun says:

    In Maxgain loan, do we get Principal amount payment exemption from Income tax under 80 C for the compulsory principal amount deducted along with the EMI . Supposing my EMI is of 25,000 in which interest amount is 20,000 and principal amount payment is 5,000. So, Will I get 5,000*12=60,000 exemption of Principal payment under Section 80 C.

  14. Prashant says:

    I learned that we can make min 20% pre-payment, that too only 2-3 times during tenure. Now to get full income tax benefit, I need to pay additional principle amount each year. For this i was thinking of contacting SBI to reduce tenure of my loan, so that EMI and effectively principle payment per year increases.

    Will SBI honour request to reduce loan tenure to increase EMI?

    1. Yes they will do that !

  15. SRNM says:

    Hai
    Pl let me Know about the IT Exemption for Interest portion and Principle In SBI Maxigain Home loan

    1. What exactly you want to know in that?

  16. Amit says:

    Hi ,

    I have taken Home Loan from SBI Max Gain, i have around 4 lakh balance in OD account. I will get possession of the flat within this week. Can i withdraw the remaining money from OD account after that ?

  17. Rakesh says:

    Hello,

    property is under construction it will take 1 more year for completion. Maxgain loan of 35L is sanctioned and I am having currently 15L. I am in doubt
    1)in construction period I ask bank for complete disbursement (35L), 15 L i will deposit in OD account to save interest OR partial disbursement (35-15= 20L), 15 L I will pay directly to builder?
    2) it good to start full EMI construction period onwards OR should be pre-EMI (in contruction) then full EMI (after construction) ?
    3)could you please share your view on 10.70.10.10 scheme. How it works and does the bank pay interest for the construction period?
    Thanks

  18. Ajeet Singh says:

    Tax on resale Flat

    if i want save long term property gain on resale flat, then as per my understanding I have to invest the amount in new home within three years from sale date
    or purchase the new flat one year before sailing
    is this correct understating?

    if new flat is under construction and it takes 2 years to complete then how do we consider the date
    new flat booking date or government registration date ?
    example booking date is 25 April 2014 and registration date 15 Jan 2016

  19. Ajeet says:

    if I take home loan by 10 March 2016 then as per Tax rule when possession should be done to take advantage of income tax debate on home loan

    possession should be before 31March 2019 or 31March 20 20?

  20. Vinayak says:

    I have recently took loan and opted SBI Max gain, in Bangalore, I have enquired with the bank that they are not providing ATM to the OD account only cheque book will be issued. Is that so? Can you confirm with latest info.

    I have opted for ECS, Every 10th of he month EMI will be deducted from ICICI bank as my salary acount is ICICI.
    Can I change the OD account to salary account?

    1. Hi Vinayak

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  21. Patil says:

    Will it be beneficial to claim tax benefit and use surplus amount as Fixed Deposit especially for second house wherein you can claim tax benefit for entire interest and claiming tax benefit also reduces tax slab from 30% to 20%

  22. Naveen says:

    Hi,

    In Max gain home loan if I have opted for full EMI payment ( Pay full EMI even when full loan has not be disbursed) . Where extra amount that I am paying in each EMI is settled against ?

    1. It should be settled against Principle !

  23. leanprateek says:

    Kindly help me understand this

    Description SBI H L MAXGAIN OD (DEC13)
    Name Mr. PRATEEK KAPOOR
    Book Balance -15,36,415.00
    Available Balance 7,13,585.00
    Limit 22,50,000.00
    Uncleared balance 0.00
    Drawing Power 22,50,000.00
    Currency INR
    Rate of Interest (% p.a.) 9.45%
    Lien Amount 0.00

  24. Amit says:

    Hello,

    If SBI reduces the interest rate, for SBI MG account holder, has to pay certain amount to get adjusted to the newly reduced interest rate, why this payment is required and is it advisable to pay that amount and get the reduced interest rate..Also how the amount to pay is determined..Can you please advise.

    Regards
    Amit

    1. Hi Amit

      Its a complicated calculation, you need to contact SBI only for this

      1. Amit says:

        Ok thanks. I have one more query please.

        My EMI goes via my another SB account in SBI to MG OD account on 5th of every month. Can I transfer on say 3rd of every month the amt (surplus amt?) same as EMI from OD A/C to SB A/C which ultimately will be used as EMI (on 5th it will again get transferred to OD A/C). Will this be beneficial in anyway..

        1. I think you should not complicate it to this level

          1. I am not sure what help you need ?

        2. Ankur says:

          Yes, this is a very nice way to extract the maximum benefit out of the Maxgain account. You should do this asap.

  25. Vivekanand says:

    Hello,
    I have MG in SBI, Many times I use to transfer small amounts balance in SB account to OD account. After possetion and full disbursement by Bank to Builder I am able to transfer amount from OD account to SB account. But now I am unable to transfer small amount from SB account to OD account. I have contacted bank and also shows demo on my mobile but they are unable to resolve. Kindly advice what to do or to whom I should approach?

    1. Hi Vivekanand

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that

      Manish

  26. Gagan says:

    Hi,
    CAn anybody explain when transfer option will be available in my maxgain od account. I have withdrawn all the money from the account. Will it be enabled automatically or should i contact sbi branch for the same

    Thanks

  27. NIKHIL says:

    HI,

    I have taken 15L loan from SBI in MAx Gain Account. I have started to pay EMI from Last yest September 2015. Now after end of financial year I recevied interest certificate for account as below :

    Repayment towards Principal Rs. : 30816.00
    Repayment towards Interest Rs. : 82005.00
    Repayment towards Charges Rs. : 0.00
    ————————————
    Total Repayment Rs. : 112821.00

    But if we count from September to April I have Paid (16300 x 8 month) = Rs. 1,30,400.00
    So there is gap of Rs.17579
    Can you explain me what is this?
    Or is Bank has make mistake

    1. Kamlesh says:

      Please check your Maxgain Suraksha account details as well. May be the amount transferred to your MXGAIN Suraksha account.

    2. Srsabat says:

      The gap of the gap of 17k must be some kind of charges. Like stamp duty, service tax or insurance added to ur account. Better talk to manager of the branch u have sb account or the loan ac.

  28. Krish says:

    Hi,

    This topic could be beaten to death, but search didn’t get answer to my below question. So, pardon me if it’s already answered somewhere – would appreciate a pointer.

    Is SBI Maxgain beneficial for buying 2nd home for investment to use the maximum “interest” portion of loan in tax deduction?

    In SBI Maxgain, if I put surplus amount in the OD account (assuming it is pre-payment and not parking), the interest outgo is minimum and goes against my wish of getting maximum tax deduction for “interest”.

    In these cases where I want to pre-pay instead of parking the amount, does a normal home loan account work better than Max gain account?

    Thanks,
    Krish

  29. Nilesh says:

    I am getting Funds transfer failure error as “Transaction result into closure of loan account. Please contact your branch.” when I transfer funds from my SBI saving account to Maxgain OD account. I tried to contact branch many times, but they are unable to resolve this problem. Even I paid the due of Maxgain suraksha account then also same problem occurs. Please suggest.

  30. Devender says:

    Hello Sir, I took max gain home loan of 30 Lakhs 15 thousand i.e 3015000 Rs. @ 9.85%. I want to close this loan as soon as possible.

    How much amount i need to deposit into max gain account monthly to close this in 3 years. pls reply.

    Thanks.

  31. kumar says:

    HI…….
    I have SBI HL I want know whether my HL a/c is maxgain or term loan how found about it,

  32. Manu K Paul says:

    Hi ,

    I Took a MG Loan for 36 L and opted for 12 months pre EMI, but entire loan a got disbursed within 6 months and I got registered my Flat in My name.

    So My question is even though I opted for 12 months PRE EMI, since full disbursement is done within in 6 months , will my EMI start from 7th month on-words or I need to Pay the pre EMI till 12 months

    Thanks
    Manu

  33. investwise says:

    Hi Manish/Atul,
    I have a question relating to early home loan payment and I have never been able to get this clear. Can you help me understand to make a wise decision?
    I took a home loan of 33L for 15 years tenure for which I started paying EMI from 2012. I plan to close the home loan by end of 2016. By doing this, I would have roughly paid 10L in interest in 4 years to close the home loan. I met an LIC agent yesterday who said its a bad idea to close the home loan so fast as its like paying 33% interest annually to close the loan (in 4 years) as against 10.15% in 15 years. Moreover I will be losing tax benefits for the 1.5L interest component. I am convinced that prepaying is good enough, but not able to do the math. Will you be able to guide me?

  34. sumantgupta says:

    I am already SBI Maxgain home loan borrower,following are the details:

    Home Loan : SBI Maxgain
    Loan Outstanding: 28 .5 Lacs
    Current rate : 10.1 %
    Loan duration left: 17 years

    Should i go for loan conversion to 9.9 % by paying 0.56% of Outstanding?
    As per my calculation:
    If my loan continues for 17 years total interest i pay would be if interest rate is 10.1:
    Rs : 31,24,174 (A)
    If my loan continues for 17 years total interest i pay would be if interest rate is 9.9:
    Rs : 30,50,564 (B)

    Total difference b/w interest is: approx ((A-B) is Rs 75000.
    If i pay conversion fees of (0.56 * Outstanding loan of 28.5 ) = Rs 16000.
    Seems there is benefit. Should i go for it or no or am i missing something?

  35. Hiren Suthar says:

    Hi Ashalamshu,
    I went through the earlier posts and I feel that my query can be resolved on this post only.
    Recently I have taken Home Loan from SBI with Max gain feature.
    Loan amount is: 32,60,000 with Interest rate as: 10.15% and Tenure is: 20 yrs.
    I have gone for: Full EMI option.
    I am expecting possession by Dec 2015.
    Only one disbursement is done to builder of Rs: 27,01,987.00 (done on 24th Feb 2015 by SBI bank from OD account)
    EMI will be: 32,217 and starting from 10th April 2015
    I have following query:
    1. On what basis EMI is calculated to be 32217?

    2. How can I see the Principal and Interest component for each EMI?

    3. What are following two entries in my statement :
    DEBIT INTEREST (Debited) on 28th Feb 2015 for 3757
    DEBIT INTEREST (Debited) on 31st March 2015 for 23324

    4. Will my first EMI (on 10th April) be same as told by bank manager or it will change?

    5. Will EMI deduction from my Saving Account revert any of the above transactions (related to DEBIT Interest)?

    I am really hoping for the clarification on this as things are confusing me and need to plan it in better way.

    Thanks in advance.

  36. msreddy says:

    Hi Ashal,

    Please provide me guidance on the below.

    I have taken a home loan from SBI with max gain policy. Every month end an amount is getting deducted from my OD account saying “DEBIT INTEREST”. The amount is my savings money transferred to this account for utilising the max gain policy. Again an EMI is getting deducted from my salary account every 5th of the month. So, am I ending up paying two times a month, since both the cases its my savings money only. Please clarify and let me know if you need further details. Thanks in advance.

    Thanks.

    1. nsabhyankar says:

      Dear Msreddy,

      The EMI deducted from salary account is deposited in the MaxGain (MG) account. It adds to your credit balance. In the MG AC, search for an entry like this: ‘BULK POSTING ECS DT 05/03/2015’. It will show a credit entry for an amount equal to the EMI.

      The bank deducts the interest on the month-end and the entry is marked as ‘debit interest’. This is the interest that you pay on the home loan. The interest debit will happen irrespective of whether you have any surplus in MG or not. The EMI that is transferred from salary AC to MG AC covers this.

      You are not paying two times. The EMI amount gets added to your balance in MG. The interest is debited as you observed. The principle reduction is shown by a reduction in the drawing power.

      In a normal home loan, your EMI is debited from your salary AC and goes directly to the bank. However, in the MG scheme, you need a separate loan AC where you can deposit your surplus. The same AC is used by the bank for EMI deposit and interest debit. This is causing the confusion.

  37. nsabhyankar says:

    Thanks Manish,

    I had sent a mail to the bank and they refunded the amount.

  38. nsabhyankar says:

    I have a MaxGain loan AC with SBI. I had a debit card linked to this AC. However, it does not work anymore. The loan branch says that debit cards were closed for MaxGain AC’s. Is that true? Can anyone confirm?

    Also, the bank has deducted card maintenance fees from my MaxGain AC. Is this allowed?
    Has anyone else been charged for this canceled card?

    1. Hi Nikhil

      Seems like the answer for this can be given by bank only !

  39. Loganathan says:

    Dear Ashal,

    I am holding max gain account, i started paying full EMI from beginning. At present i have left out around 4 lakhs. available balance in my account. Now i am planning to buy a car, were i am in short 3 lakhs, could you please suggest whether i can go for car loan offering at (10.75%) or to utilize the balance amount in Max gain account(10.5%) which will be more benefit.

    Loan Amount: 30 lakhs.
    Tenure: 25 yrs
    EMI: 29,000
    According to my calculation if i go for car loan at 10.75% total interest payable will be Rs/- 34,741.
    In case if i utilize available balance in Max gain account i will loose interest saving around Rs/-69,766.
    Kindly advise whether my understanding is correct, if it wrong please give your opinion.

    Thanks

  40. nsabhyankar says:

    Should the partial pre-paid amount be included in the ‘principle repaid amount’ on the interest certificate?

    I have an MG loan account. I had made partial pre-payment in the last FY (2013-14) I requested for an interest certificate for the same period. The principle repaid amount mentioned in the certificate does not include the pre-paid amount. It only includes the regular principle parts of the EMI for the year. is this correct?

    If the pre-paid amount reduces the principle, why is it not included in the principal amount on the certificate? Does it make any difference if the MG account has a credit balance (i.e. the balance = loan outstanding and thus no interest charged)?

  41. VivekMumbai says:

    Hi Ashal, thank you for running this forum. Glad to see so many people satisfied, appreciate if you could help with some guidance.

    Situation: If I take max gain (loan with OD) and plan to pay full emi for a under construction property of 1cr.

    Q1 – If the project goes on hold or gets into a litigation, I’m sure bank will continue to ask full EMI until I close by full loan payment irrespective of how much is disbursed. a) Is this right? b) Is there any safeguard for a consumer?

    Q2 – I need 50 lakhs for a property of 1cr (as I have 50lakhs from another resale for upfront payment now). I need financing immediately to cover slab payments.
    I dont want to finance more than 30 lakhs because
    – I can arrange 10-20 lakhs additionally through savings in the next 2-3 yrs of construction period but not right now.
    – I want to keep current and future emi wrt 30 lakhs as MG OD will only reduce my interest amt for a 50L loan and still deduct huge principal every month (affecting my future savings)
    – Not sure but the interest to recover a 50L loan unlike for a 30L loan will be higher, again affecting the savings.

    a) Is my understanding listed above right?

    Q3 – What approach would you recommend if none of mine listed below are relevant? I had some thoughts about approach, but not sure if these work, please can you guide?

    Approach 1 – can I ask the bank to not disburse some of the demands as I may have savings to do so on my own. But will the bank sanction loan for a part of the remaining payment to the builder (e.g. 50L = 30L bank+20L me). I want SBI to release some for initial slab payments (atleast 75% of 30L) and then I can cover in the interim, remaining 25% for the final slabs from bank.

    Approach 2 – If I finance 30 lakhs and xfer 10-20 lakhs partly during the 2-3yrs construction period, apart from saving the interest through these xfers (as you’ve kindly made us understand), will the disbursement capacity get reset to a new value everytime I xfer to OD.
    Illustration: Assume 30L loan emi 30k (5+25); then 10L xferd to OD will reduce next months interest component (e.g. 2+28) …..but will my loan capacity get reset to 40L (30+10)

    What this will mean is that the bank will have more than 30 lakhs in the OD to disburse as I would have continued to add during the constrution period. So the bank will end up disbursing 50lakhs even though I am financing only 30 lakhs from them, since I would have added that remaining 20 lakhs in the OD account before 30 lakhs burns out.

    Thanks
    Vivek

  42. sreekanth101 says:

    Dear Ashal,

    This is by far the best article and discussion on Maxgain that I have come across.
    Really appreciate your patience and contributions.

    Would be great if you could respond to my queries as well (kindly bear with me for the longish question):

    Background:
    – SBI MG HL sanctioned in 2013 Nov
    – Total sanctioned amount – INR 99 lakhs
    – Amount disbursed till date – INR 42 lakhs
    – Pending amount to be paid to the builder: INR 40 lakhs
    – Expected possession: Dec 2015 – March 2016
    – EMI starts from – May 2015 ( EMI Amount : INR 101, 264)

    Q1:
    When can I start using the MG account as an OD account – Is it post disbursement of INR 99 Lakhs or only on the possession of the flat?
    Got 2 conflicting replies from the bank on this one

    Q2:
    Can EMI be deducted from the MG account itself?
    E.g. I park additional amount in the MG account and on the EMI date the amount is deducted from that account. Is this possible?

    Q3: Can the limit be reduced
    Is it possible to reduce the limit to say arnd 60 lakhs, since I feel that by the time I get possession I will have the remaining equity ( of 24 lakhs).
    The idea is to reduce the limit to INR 60 lakhs.. by march – april this amount would be disbursed, at which point I could start using the MG as an OD acct

    Many thanks in advance for your assistance.

    Best Regards,
    Sree

  43. Reji m says:

    Thanks Ashal!

  44. Reji m says:

    Hi Ashal,

    I’ve a doubt: Consider I’ve started the EMI from day 1 and the registration of the property is another 8-12 months away.
    If my understanding is correct SBI will charge interest amount only for the amount released. So what will happen to the excess portion of EMI?
    Does it go towards principal or it will remain parked in the MAX gain account.

    For example, I am using a 50 L loan. The EMI would be 48583 (20 yrs, 10.1%).
    Consider 35 L released so far. Then 29458 will get deducted as the interest from the EMI, so what will happen to 19125?

    1. ashalanshu says:

      Dear Reji, the unused interest amount ‘ll become part of Available balance and ‘ll help to bring down the interest outgo next month.

      Thanks

      ashal

  45. Ashwani says:

    Thanks for nice article…I have queries regarding the same. I got MaxGain sanctioned in Apr’13 for 38,00,000 Rs, with Moratorium period of 18 months. Initial demand by builder was 14.25L, hence I calculated and started paying the EMI of Rs 15,000 from May’13 onwards, next builder demand was Rs 7.25L in Oct’13, hence I got my EMI increased to 21,000 Rs and so on for next demands. As of today, my moratorium period of 18 months is over while I haven’t taken full disbursement of Rs 38,00,000 and SBI officials have asked me to pay full EMI of Rs 38,620 starting today. As of today, Book balance is -29,93,338 and whole disbursement will take another 18-24 months as builder demands every 6 months. I recently asked SBI officials to increase my EMI to Rs 31,000, they state they gonna do it, but that might show your account going irregular. Is that the case? If its true, any suggestions on this. Please suggest, your valuable inputs might help me.

    1. ashalanshu says:

      Dear Ashwani, as your moratorium period was just 18 months and your builder has not withdrawn the full loan amount, you do not have option now to pay partial EMIs. Please start paying full EMIs now.

      Thanks

      Ashal

      1. Ashwani says:

        Thanks Ashal. Is there any wayout I can get the moratorium period extended? Also, wanted to check if full EMI on 38,00,000 would be calculated on basis of 240 months or 222 months.

        1. ashalanshu says:

          Dear Ashwani, the full EMI ‘ll be calculated for remaining 222 months. For extension of moratorium period, you should approach the AGM Loans, RACPC of your city.

          Thanks

          Ashal

          1. Ashwani says:

            Thanks Ashal for your prompt response and advice, will try to get MP extended.

  46. saj says:

    Hi Ashal,

    This discussion has been very informative. Have gone through most of the comments above and have a couple of questions-

    I am buying an under construction property and has decided to go for the max gain loan.
    But should I go for full-emi from beginning or pre-emi? I have read from the comments above that we should go with full-emi, but I do not understand the benefit of full-emi with maxgain. With maxgain, we can always park the surplus amount in the maxbain account, right?. So going with pre-emi and parking money in max gain will be as good as going for full-emi. Is this right or I am not understanding something here?.
    Also, I understand from the above discussion that the period of loan is of not much importance with maxgain. We can go for a 15 years term even though I am planning to close the loan in 10 years. Is this right?

    Thanks a lot for the help.
    Regards,
    Saj

    1. ashalanshu says:

      Dear Saj, in case of Pre EMI, you ‘ll not be closing the loan although saving ‘ll be there in terms of paid interest if you put excess amount directly (EMI- Pre EMI). In case of full EMI from day one, the principal ‘ll also be paid and hence more benefit for you in interest outgo on the loan amount.

      Yes you may even opt for 20-25-30Y period in Max Gain as you can actually control your interest outgo.

      Thanks

      Ashal

  47. ashalanshu says:

    Dear Rita, if your interest outgo is 1.5L Rs. and your tax slab is 30% than resultant tax saving is around 45K Rs.

    Thanks

    Ashal

  48. ritasrik says:

    Hi Ashal,
    The tax saving would be around Rs.45000 while (if I m not wrong) the saving on the interest would be around Rs. 1,00,000/-. Am I doing the calculations right? Is there any clause that I need to be aware of?
    Thanks.
    Ritasri.

  49. ritasrik says:

    Hi Ashal,

    I have a SBI Max Gain home loan with drawing power Rs. 30,00,000.
    As I have parked around 25 lacs in the OD account the total interest charged till date for the 2014-2015 financial year is at around Rs. 23,000.
    My query is, would it be better for me to keep the amount in the account and avail the benefit in the interest charged OR withdraw the amount and avail tax benefit .

    Many thanks.
    Ritasri.

    1. Krishna says:

      Dear Rita,

      If you haven’t parked 25L in OD, you saved int 2.5L for 10% int. if you not parked, you will get the tax benefit 45000 only when you are in 30% slab.

  50. ashalanshu says:

    Dear Chandan, in few cases SLOP has been applied by SBI. Why it’s selective and not common across the board for all borrowers, I do not know.

    Thanks

    Ashal

  51. chandan blr says:

    Hi Ashal,
    I got SBI max-gain loan sanctioned in June 2013 , have been paying EMI’s since then.
    In sep 2014 , my loan account is debited with 1000/- saying “Supplementary Legal Opinion Charges” . I had submitted legal opinion from SBI endorsed lawyer when I applied for loan and they had taken that with all other documents. DO you know why this debit gain , is that yearly ?

  52. parvinder13jun says:

    Hi All,

    I have taken SBI YUVA HL MAXGAIN home loan for 57 lacs and disbursed around 31 lacs. I have transferred my saving in Loan account and now out standing amount is around 7 lacs.

    But I need to make payment to builder but as per my discussion with SBI, they will disbursed only Rs 57 lacs – Rs 31 lacs = 26 lacs.

    Book Balance -6,22,568.00
    Available Balance 50,77,432.00
    Limit 57,00,000.00
    Uncleared balance 0.00
    Drawing Power 57,00,000.00
    Currency INR
    Rate of Interest (% p.a.) 11.0%
    Lien Amount 0.00
    Now my questions are.

    1. How do I pay Rs 40 lacs to builder now as i have already transfer my savings to OD Account??
    2. What is the use of OD account if they will not disburse the requested amount?
    3. Can I transfer my saving back to Saving account from OD?
    4. How OD amount will be transfer back to Saving account?

    Please suggest me.

    Regards
    Parvinder

    1. ashalanshu says:

      Dear Parvinder, it has been told many times to not park your savings in MG account till final disbursal of your loan amount. To get back your own amount, please contact AGM loans in your RACPC.

      Thanks

      Ashal

  53. sarkarsk says:

    I have a query on restructuring the home loan, please advice.

    I have taken a home loan of Rs 18 Lac (property price of 29 Lac) on May, 2012 from SBI (Maxgain). The tenure is 8 years.
    With regular EMI and pre-payments, as of Sep, 2014, Rs 5 Lac is outstanding.
    Now I want to purchase a second property.
    My plan is to pull up Rs 5 Lac from SBI Maxgain a/c (which is my capital parked in to reduce loan interest component).
    I will use this 5 Lac as downpayment for the second property.
    Total down payment requirement is 10 Lac for the second property.
    I will arrange another 5 Lac from relatives/friends.

    Coming back to SBI Maxgain loan of my first property; now my present loan outstanding will be 10 Lac.
    I want to restructure this loan amount as 20 year tenure.
    Emi for 10 Lac having tenure of 20 years will be approx 10K per month.
    If I buy my second flat, the existing flat will be on 10K per month rent (ball park figure).
    So this way, rent will offset the EMI for the first property.

    Now can I apply for 40 Lac loan with 20 year tenure, which is under my loan eligibility?
    The second property is RTM and price is 50 Lac.

    Experts, what do you think? Will my bank, SBI accepts this proposal ?

    1. I think this is a very good idea . Go ahead .

  54. hima says:

    Hi, This forum was very helpful. However, I still have issues in my Maxgain loan.
    I have a home loan SBI Maxgain for 35 lakhs. EMI is around 35000 pm. The moratorium period got over in May 2014. I have started paying EMI from Sep 2013.
    I do not see my principal amount of EMI debited since June 2014. Nor my Drawing power has reduced with that amount. When will the bank start debiting the Principal part. I have handed over the completion certificate of flat and the loan is fully disbursed.
    Pl find the details as shown in the account as of now
    Book Balance -34,79,325.00
    Available Balance 20,675.00
    Limit 35,00,000.00
    Uncleared balance 0.00
    Drawing Power 35,00,000.00

    Who should i approach to get the principal deducted every month?

    1. ashalanshu says:

      Dear Hima, please approach to your loan serving branch for the same.

      Thanks

      Ashal

  55. Reji m says:

    Hi Ashal,

    I would like to know the procedure or points to keep in mind while loan closure:
    1) Obtain No Object Certificate
    2) Get back all the original documents ( make sure all pages are there)

    Anything else I need to do know?

    1. ashalanshu says:

      Dear Reji, yes NOC as well as all the original docs are the things you need to check.

      Thanks

      Ashal

  56. htumesh says:

    Hi,

    This site was very helpful for me. After seeing this site I transferred my home loan from other bank to SBI in Apr-2013. Thanks a lot, I am sure I have saved money.

    From the day I took loan I am entering the details in an excel sheet and following up. I have formulas in excel sheet for “Book Balance” and “Available Balance” I just have to update debit, credit and other details. My formula works for “Book Balance” whereas for “Available Balance” it doesn’t work whenever there is “Debit Interest”. I do not know why. It works for other transactions (other than Debit Interest) Here are the details:

    For example on 26th Aug online web showed be below details:
    Book Balance: -3917192 (my formula is “Previous Book Balance”+Credit-Debit)
    Available Balance: 1239492 (formula “Previous Available Balance”+Credit +Debit)
    Limit: 5156584

    On 31 Aug:
    Debit Interest: 37649
    Book Balance: -3954841 (-3917192+0-37649 = -3954841, which is correct)
    Available Balance: 1195007 as shown in my account
    As per calculation: 1239492 +0-37649 = 1201843
    So my Available Balance is reduced by Rs 6836/-
    Am doing anything wrong in my calculations? Why I am getting this Rs 6836/- difference? If I download the statement I will not get “Available Balance” for each day.

    Could you help me to understand this? I have another home loan taken recently, even in that loan I see similar difference.

    Regards,
    Umesh

    1. ashalanshu says:

      Dear Umesh, can you mailme your account statement in exl. format?

      Thanks

      Ashal

  57. ashalanshu says:

    Dear Pushkar, the Processing fee is your usual home loan processing fee. The Cersai fee is meant for some certification related charge done for you by SBI.

    Thanks

    Ashal

    1. Pushkr says:

      Thanks for clarification Ahsalanshu. But at the time of signing and finalizing home loan, my power of attorney paid these fees via separate checks. So SBI deducted these fees twice so far. I email RACPC branch and the local branch where my loan account is processed, but none of them replied so far.

      1. ashalanshu says:

        Dear Pushkr, if you have paid already these fee, please visit your loan serving branch with a written application for reversal of these debit entries.

        Thanks

        Ashal

  58. Pushkr says:

    Hi All,

    This is extremely useful forum I have seen on SBI maxgain. Specially great contribution my Ashalanshu. Kudos!

    My question is – I recently purchased SBi MG home loan of 30lkh on underconstruction property. Out of 30lkh , 10lkh are disbursed to builder. Now on the day on opening OD account, I could see OD account details along with my saving account as –

    Description SBI H L MAXGAIN OD (DEC13)
    Name XXXXXXXXXXXXX
    Book Balance -10,00,000.00
    Available Balance 20,00,000.00
    Limit 30,00,000.00
    Uncleared balance 0.00
    Drawing Power 30,00,000.00
    Currency INR
    Rate of Interest (% p.a.) 10.15%

    I had some surplus amount that I transferred to OD account. Now day after transferring the amount to OD, I see that SBI has charged me TWO DIFFERENT FEES. I am unable to understand what those fees are and why they charged me if there was not suppose to be any fees for transaction OD account.
    Below are the description of those fees –

    DEBIT CERSAI – 562.00 Rs
    DEBIT PROC FEE = 6,500 Rs

    Can anybody help me understand what going on here??

  59. tarun says:

    Hi All,

    Plz help me in understand the transactions related to SBI Max Gain home loan account:

    I was having 54253.35 Rs. as my Available balance till 31st July 2014. But when I checked on 1st Augaust 2014, Available Balance showing was 37436.35 Rs. i.e. less by 16817 Rs. On 10th of every month, an amount of 16810 Rs is getting deducted from my savings account as an EMI.

    Now, my account looks like this as on 4th Aug 2014:

    Book Balance – 17,38,780.65

    Available Balance – 37436.35

    Limit – 17,762,17

    Uncleared Balance – 0.00

    Drawing Power – 17,762,17

    Plz find below the recent transactions on my OD account:

    31-Jul 2014 (31-Jul-2014)

    DEBIT INTEREST

    15,192.00

    11-Jul-2014 (11-Jul-2014)

    BY TRANSFER
    INB 4253.35_50000_11-14-2014

    II16063214 TRANSFER FROM 20158347433 Mr. TARUN SHARMA

    50,000.00

    11-Jul-2014 (11-Jul-2014)

    BULK POSTING
    BY E.M.I. TRF FROM 05491610063548

    16,810.00

    30-Jun-2014 (30-Jun-2014)

    DEBIT INTEREST

    15,004.00

    11-Jun-2014 (11-Jun-2014)

    BULK POSTING
    BY E.M.I. TRF FROM 05491610063548

    16,810.00

    02-Jun-2014 (02-Jun-2014)

    BY TRANSFER
    INB loan

    II15422391 TRANSFER FROM 20158347433 Mr. TARUN SHARMA

    113.00

    31-May-2014 (31-May-2014)

    DEBIT INTEREST

    15,522.00

    As per my understanding, whatever is interest saved will be added to the Available Balance. but here, I have paid EMI as well as 16817 Rs. got deducted from my Available Balance.

    Plz help me understand this.

    Thanks,

    Tarun

    1. ashalanshu says:

      Dear Tarun, can you mail me your account statement over my personal mail id?

      Thanks

      Ashal

  60. rahulmunjal says:

    Team,

    I have a pre-approved loan from SBI for 55 Lkh for a property of value 65 lkh (possession next year). I have some surplus money that I might need in near future (before the possession of the current flat). So I am planning to take loan between 30 to 40 lakh.

    1. Should I take loan for 40 lkh and put the surplus in maxgain?

    2. How much extra processing fee (stamp duty, assessment, etc) will be incurred for the extra 10Lkh loan??

    Thanks.

    1. ashalanshu says:

      Dear Rahul, please opt for maximum possible loan and then park your own money in Max Gain to keep liquidity of your money open to you.

      Thanks

      Ashal

  61. nsabhyankar says:

    @Anshudeep

    1. Part pre-payment can not be done by NEFT from savings to MaxGain. That would be just parking the surplus into MaxGain.

    It will not reduce the drawing power. You need to approach the RACPC and submit an application asking them to accept the pre-payment and reduce EMI. The DP will reduce once this happens.

    2. EMI can be reduced. I have done it for my MaxGain loan.

    However, as per RACPC Pune official, this can be done only twice in the entire tenure. So, make sure you are pre-paying a substantial amount as per your scenario.

    A very small amount won’t change the EMI much and you will use up one of the two chances you have.

    3. Better option depends on why you want to do it.

    I was looking for another loan and thus wanted the EMI to come down. This helped in increasing the eligibility for the second loan.

    If you are only looking for saving on interest, just park the surplus in MaxGain.

  62. anshudeep says:

    Hi,

    I had taken 28 lakhs of Home Loan from SBI and its a Max Gain account (EMI effective from march 2013) and paying full EMI from Day 1.

    I would like to make a part payment (instead of parking Surplus funds in OD) of some amount so that my EMI gets reduced. But as per the SBI officials the EMI can never be reduced. So what happens in this case? the tenure gets decreased? Also, I have following questions:

    1. My SBI savings account is linked with my OD account. For doing part payment is it possible to make an NEFT funds transfer from this SBI savings account to OD account?

    2. Is it actually correct that the EMI can never be reduced or is there a way?

    3. Which is a better option considering the EMI can never be reduced, a) parking surplus funds in OD which can be withdrawn any time OR b) making part payment which will never come back to you?

    Regards,
    Anshudeep

  63. sathis.venugopal says:

    Hi Ashal,

    I took my housing loan with SBI and its a Max Gain account and curretly my 1st Loan disbursement is happened for Rs.267999 and i opted for paying Full EMI and for me the sanctioned loan amount is Rs.3538000 with interest rate of 10.15 and being my wife as primary and im secondary and when saw the same in online linked to my SB Account the limit is showing as Rs.3527232 instead of 3538000 and interest is 10.1 (in my sale agreement my name was 1st and my wife name is 2nd applicant so the sanction letter shows 10.15 as interest). Now my question is
    1.why in online it is showing wrongly
    2. Do i need to get seperate internet banking for the OD Account
    3. Since im opting for Full EMI and the house is under construction can i opt for tax emption (expecting ill get the house in the month of Jan/Feb’15)
    4. The sanctioned loan amount is Rs.3538000 but i require only Rs.2450000 when can i ask the bank to change the same.

    Account Number 00000000000000000
    Description SBI HL MAXGAIN OD(WOMEN-DEC13
    Name Mrs.
    Book Balance -2,67,999.00
    Available Balance 32,59,233.00
    Limit 35,27,232.00
    Uncleared balance 0.00
    Drawing Power 35,27,232.00
    Currency INR
    Rate of Interest (% p.a.) 10.1%
    Lien Amount 0.00

    1. ashalanshu says:

      Dear Venugopal, let me try to answer your queries.

      1. It’s not wrong. the DP has been reduced due to start of your regular EMIs.

      2. Please wait for final disbursal to avail transaction rights.

      3. If house possession comes to you in Jan/Feb 15, you can claim full FY’s Interest as well as principal for tax benefit.

      4. Once your requirement is over, inform the bank about the same to reduce the loan amount.

      Thanks

      Ashal

      1. sathis.venugopal says:

        Hi ,

        Thanks for your reply, Another Doubt i have incase if i got delayed possession consider after Mar’15 then for this year i cant able to use the IT Exemption on 80C for the principal amount but consider the registration i can do before getting the property in such case can i claim for the IT Exemption (if i do registration by this year itself) on 80C for stamp duty and registrtion cost.

        1. ashalanshu says:

          Dear Venugopal, yes Stamp duty and registration charges paid in the year of registration are available for section 80C benefit.

          Thanks

          Ashal

  64. parit says:

    Hi Ashal/Jagoinvestor forum members ,

    I have been following this thread for quite a while . It has helped me in taking right decision to avail SBI homeloan . My loan is of amount 35 lakhs and house is worth 50 lakhs . My loan was sanctioned in June 2014 , so far 10 lakhs have been dispersed to builder .
    Now yesterday new RBI guidelines have come under which my housing loan comes under priority sector lending . My questions are as follows :-
    1. Will my loan be eleigible under this and consequently will i see a drop in my interest rate ?
    2. When and how do I negotiate with SBI regarding this ?
    3. if the bank insist that it is only for new loans what is the recourse available to me ?

    Thanks in advance for your reply .
    Paritosh

    1. ashalanshu says:

      Dear Parit, the ROI on your SBI Max Gain is already low.

      Thanks

      Ashal

  65. Vaninath says:

    Hi Ashal,

    I took SBI Maxgain Home Loan in 2009.
    I have been utilizing overdraft facility to maximum extent and reduced Interest out go considerably by parking surplus money in Overdraft account.

    Now my interest out go is just around 1 Lakh per annum.
    My home loan interest rate is 10.25%
    My query is regarding raise in exemption limit of income tax on Home Loan interest which is 2 Lakhs in recent budget.

    Which one of below is beneficiary ?

    1. I continue to park surplus amount in Over Draft SBI Max gain account. Pay an interest of around 1 Lakh and also pay around 30% extra Income Tax since my Home Loan Interest out go is less than 2 Lakhs.

    2. Withdraw surplus amount from Over draft SBI Max Gain account. Invest in say Fixed Deposit for 9% interest. This will increase my Home Loan Interest per annum to 2+ Lakhs and take advantage of paying less Income Tax.

    Please let me know which one is beneficial.

    Kindly get back to me in case of any queries.

    Regards
    Vaninath

    1. ashalanshu says:

      What about income tax liability on FD interest?

      Thanks

      Ashal

  66. Venkata says:

    Dear Ashal Sir,

    Thank you for the wonderful guidance. Its immensely helpful.

    Our builder is pushing for registration, at the time of which the final disbursal 5% is to be released by SBI. Before registration itself, I parked about 8 lakhs amount into MAXgain account, which I am not able to access now for the obvious reasons. If I go for the registration now and final disbursal is done, can I expect the transaction rights ”immediately” so that I can access that 8 lakhs for my important needs. Are there Only two conditions: 1. Final disbursal 2. registration or More…!?

    I am asking this because, the builder can give for possession only after 3-months; Not now as water & sanitary connections are not yet given. Is possession and possession letter are mandatory for transaction rights. I could not find any official document for this from SBI.

    I am not able to postpone the registration for 3-more months till possession due to the pressure from builder, as he is not allowing us to do woodwork without registration.

    Please help.

    Thank you,
    Venkat

    1. ashalanshu says:

      Dear Venkata, possession letter is not necessary from builder. Yes registration and final payment receipt from builder is required for transaction rights activation. After the final 5% disbursal, contact your builder to provide receipt and issue a covering letter that all the money have been recieved against the property (details ofnthe property in question). Contact now your loan serving branch for transaction rights.

      Thanks

      Ashal

  67. Parag Kumar says:

    Hi Kulkarri Sir,

    You have to pay 0.56% of outstanding loan amount(outstanding Principal) to SBI to get the loan rate reduced from 11.35 to 10.1.

    You need not go to RACPC. You can do it through your branch.

    Thanks,
    Parag

  68. chandan blr says:

    Hi Ashal
    Have two questions – if you can help me with

    1) wrt to “DEBIT INTEREST” entry in my OD account , I understand that this money is the interest I pay on Balance (Book balance) and it reduce if I put surplus into OD account, the doubt I have is when I pay EMI , part of the EMI will be principal amount and part of it is for the interest , so here I am paying interest in 2 parts (one is in-side EMI and one is taken on last day of the month) , is that true ?
    if EMI is fixed , will principal part of EMI increase to the extent of “debited interest” – a bit confusing for me ( I know this is the standard practice in SBI but trying to understand the economics behind)

    2) when I signed SBI maxgain loan , interest show there (on papers) was 9.95% (one year back) , but when I login to account/online , it show interest rate in 10.25% , how does this work

    Regards

    1. ashalanshu says:

      Dear Chandan, in case of Max Gain, interest is not debited from your account on EMi date. it’s actually debited on last day of the month. So from EMI datwe till last day of the month, this interest part of EMI remains as available balance and thus also help a bit to save on interest outgo.

      When you applied and availed home loan the base rate was 9.7% which has been increased to 10% and thus your own loan being Base Rate + 0.25% spread, has become 10.25%.

      Thanks

      Ashal

  69. Kulkarni P says:

    Ashal,

    My current Maxgain interest rate is 11.35% which is I think on higher side compared to new loan rate of 10.1%

    How can I reduce the interest rate? Do I need to visit RACPC office for the same?

    Thanks.

    1. ashalanshu says:

      Dear Kulkarni, please contact your loan serving branch to get reduced ROI. You w’d have to pay a conversion fee for the same. Around 0.56% of your as on date DP.

      Thanks

      Ashal

  70. kapil1004 says:

    Hi Ashal,

    I have couple of queries below. Appreciate your suggestions:

    I have takeb SBI Maxgain loan amount 18 lacs @ 10.15% ROI. I have some suplus fund of 5 lacs which I kept separate and don’t wish to touch them
    1) Which is better option from returns point of view? Investing this 5 lac in Fixed deposit @ 9.5% or put this amount in OD?
    2) In Maxigain type home loans for Income tax benefit do we need Provisional certificate at start of FY or Actual Certificate from bank at end of FY? As there can be a lot diff between Provisional and Actual certificate on Interest paid.

    Regards,
    Kapil

    1. ashalanshu says:

      Dear Kapil, due to positive compounding, the FD option ‘ll be better in the long run. to keep the matter simple from your employer’s point, please demand the provisional letter only in Dec Jan so that 9-10 months interest ‘ll be factored in already and very little ‘ll change.

      Thanks

      Ashal

  71. Sudarshan B says:

    Hi Ashal,

    I have already availed a loan from SBI. how can I get to know my cibil score?

    1. ashalanshu says:

      Dear Sudarshan, please go to CIBIL site, fill in your details. Pay the fee and the cibil report and score ‘ll be there in your e-mail id.

      Thanks

      Ashal

  72. sunnyvijay says:

    Hi,

    In the above discussions it has been claimed that the home loan interest paid on Max Gain loan is fully exempt from tax, if the property is let out and not self occupied and adhering to other conditions as applicable.

    When I try to file my IT Return online (via taxsmile) they provide exemption of home loan interest only up to 150000 though its a let out property.

    Can others tell me how do they file their IT return ? anybody can suggest a good site which supports for claiming the full home loan interest instead of the 150000 ?

    Or doing it manually is the option ?

    Thanks

    1. ashalanshu says:

      Dear Sunny,how about filing on your own?

      Thanks

      Ashal

  73. Reji m says:

    Hi Ashal,

    I’ve 2 dounts:
    1. Is it possible to interchange the “primary” and “secondary” applicants. I heard SBI offers a discounted rate if a woman is the primary applicant. (At present I am the primary applicant and my wife is secondary)
    2. My current interest rate is 10.4, but the current rate is 10.15, is it possible to shift to this new rate with or without any fees (My loan amount is not fully released to the builder, it will take another 9-12 months for completion)

    Thanks
    Reji

    1. ashalanshu says:

      Dear Reji, no you can not interchange primary and secondary applicants. To get a lower ROI, please apply with your loan serving branch for rate reduction. You w’d have to pay a conversion fee to get lower ROI.

      Thanks

      Ashal

      1. Reji m says:

        Thanks Ashal! I changed my ROI, it is not possible to this from the branch. You have to visit RACPC.

        1. ashalanshu says:

          Dear Reji, in my personal case, the ROI was changed at my home loan serving branch itself. To add – I did not even go there on my own. As I was out of India, hence my friend went there for me and got it done.

          Thanks

          Ashal

  74. chandan blr says:

    Hi ,
    I missed telling that , its a self constructed independent house (Got the construction done by hiring labours/labour contractors ).

    1. ashalanshu says:

      Dear Chandan, please file a demand note to SBI to release the remaining amount to pay out to your contractors.

      Thanks

      Ashal

  75. ashalanshu says:

    Dear Chandan, your builder should raise the demand for final disbursal if construction is over.

    Thanks

    Ashal

  76. chandan blr says:

    Dear Ashalanshu,
    Is there any specific thing I should do to get my last disbursement (have already got 12 lakhs in 3 installment , remaining is 6 lakhs).

    What is that I need to get my last disbursement and active transaction ( so that I can put/get money into OD account) , is there a need for completion certificate or ?

    Regards

  77. ashalanshu says:

    Dear Prateek, your loan is partially disbursed or fully disbursed?

    Thanks

    Ashal

    1. leanprateek says:

      My Loan is partially disbursed . I have started my EMI also .

      MY EMI is Rs 20, 685. I am putting my extra saving in OD account .

      What is debit interest ?
      Please help me explain below as well…

      Description SBI H L MAXGAIN OD (DEC13)
      Name Mr. PRATEEK KAPOOR
      Book Balance -12,11,706.00
      Available Balance 10,38,294.00
      Limit 22,50,000.00
      Uncleared balance 0.00
      Drawing Power 22,50,000.00
      Currency INR
      Rate of Interest (% p.a.) 10.1%
      Lien Amount 0.00

      1. ashalanshu says:

        Dear Prateek, debit interest is the interest charged on you on the disbursed loan amount with the adjustment of surplus money parked by you.

        How much loan amount is disbursed as on date?

        Thanks

        Ashal

        1. leanprateek says:

          15l

          1. ashalanshu says:

            Dear Prateek, the interest is charged on 15L Rs. amount. the extra amount paid by you in your regular EMI is becoming part of your available balance.

            Thanks

            Ashal

  78. leanprateek says:

    Account Number 00000033628318971
    Description SBI H L MAXGAIN OD (DEC13)
    Name Mr. PRATEEK KAPOOR
    Book Balance -10,52,490.00
    Available Balance 11,97,510.00
    Limit 22,50,000.00
    Uncleared balance 0.00
    Drawing Power 22,50,000.00
    Currency INR
    Rate of Interest (% p.a.) 10.15%
    Lien Amount 0.00

    PLEASE HELP me explain

  79. Reji m says:

    Hi Ashal,

    Does the interest amount charged vary from month to month? From my sbi max account Rs 40,00,000/ was issued to the builder as on 20 Dec 2013. After this no payment is given to the builder ( next payment is another 2 months away). When I checked the interest outgo, each month it varies! Why is it happening?

    Jan 14 I paid 37,106.00 as interest
    Fed 14: 33,299.00
    Mar 14: 36,526
    Is it calculation error?

    1. roshan says:

      On a quick glance it appears proper. Please note that interest is calculated as follows

      (outstanding principal * no.of days in month * rate of hundred) / (365 *100)

      Jan has 31 days,Feb has 28 days,March has 31 days.Hence the variance.

      1. roshan says:

        *In above it should be rate of interest & not rate of hundred

        1. Reji m says:

          Thanks Roshan!

    2. ashalanshu says:

      Dear Reji, any more query?

      Dear Roshan, thanks for answering it.

      Thanks

      Ashal

  80. ashalanshu says:

    Dear Pankaj, in your case, the SBI’s software has erred and wrongly adjusted money towards drawing power from your undisbursed loan amount. Please contact your loan serving branch to get it rectified. In the mean time, you may park your EMI amount on your own.

    Thanks

    Ashal

    1. pankajgaud80 says:

      Hi Ashal,

      As per your Suggestion I have parked the EMI amount on 12th Apr. The a latest data account statement is as below
      Description SBI HL MAXGAIN OD(WOMEN-DEC13
      Book Balance -15,07,189.00
      Available Balance 14,64,540.00
      Limit 29,71,729.00
      Drawing Power 29,71,729.00

      I have asked SBI about the change in my loan limit the answer is “Since, you have opted for EMI option, the limit gets reduced to the extent of EMI payable every month. Hence, the limit with not remain constant throughout, it gets reduced every month” and I ask again for the limit was 30 lack and the answer is “Your total limit is 30.00 lacs only. In the system it gets reduced as the loan is Maxgain scheme. Hence, need not worry about the system details as I have explained you already.”

      I am still not able to understand the account details.
      Is somthing wrong in my account?

      1. ashalanshu says:

        Dear Pankaj, the drawing power should come down from EMI repayment not from undisbursed loan amount.

        Thanks

        Ashal

        1. pankajgaud80 says:

          Please tell me what to do?

          1. ashalanshu says:

            Dear Pankaj, contact AGM retail Loans of your RACPC and discuss your issue with him/her.

            Thanks

            Ashal

  81. pankajgaud80 says:

    Hi Ashal,
    Can you help me in understanding the SBI Max gain account details?
    Book Balance -15,39,611.00
    Available Balance 14,32,118.00
    Limit 29,71,729.00
    Uncleared balance 0.00
    Drawing Power 29,71,729.00
    Currency INR
    Rate of Interest (% p.a.) 10.1%

    My loan section limit was 30,00,000. First loan amount disbursement was on 28th Mar 2014 Rs. 15, 39,611. My EMI start date 5th Apr 2014 (32422, Full emi from day 1). I have paid the March interest Rs. 1704 transfer through SB account
    I opt for EMI repayment through ECS from my salary account. This month EMI is not debited from my bank. I inquired about this so bank told that it will take 15 days.
    I checked my account today so the limit is changed to 29,71,729 from 30,00,000.
    Is this due to EMI is not debated from my bank?

  82. ashalanshu says:

    Dear Mehul, what’s your 2nd question?

    Thanks

    Ashal

  83. ashokkms says:

    Hi

    I took a SBI Max Gain Loan(40L) of Jan 2013. I have SBI OD account and Saving account to repay the loan EMI. I do have online access for those accounts.

    (1) I can transfer money from Savings to OD account. But the reverse is not possible. The SBI online system doesn’t give me the option for OD to Saving account transfer. Do i need to do fill some forms to get this option enabled?

    (2) I want to pre-pay some amount of the loan (5L). Is that good enough to just transfer the pre-payment amt to the OD account? Or do i need to do something else?

    Thanks
    Ashok

    1. ashalanshu says:

      Dear Ashok, has your loan been fully disbursed or partial disbursed? In case it’s fully disbursed, please ask for transaction rights for your OD account from the loan serving branch.

      Please park the 5L Rs. amount into OD account to get the benefit of lower interest outgo. Once transaction rights are there with you, this 5L Rs. can be redeem in case of need.

      Thanks

      Ashal

      1. mehulhirpara says:

        Dear Ashalanshu,

        I was having same two questions and you have resolved first one. Could you also provide some comment on second question on pre-pay option.

        Thanks,
        Mehul

  84. roshan says:

    Dear Ashal,
    Assuming that best practices discussed in forum are mentioned above does it make any difference if EMI date is 5,15 or 25 ?

    My thought is that the date should not matter if we create a SI to move emi amount from MG to SB one day before emi due date

    Is my assumption proper or there any benefits of choosing an early date or later date?

    Thanks
    Roshan

    1. ashalanshu says:

      Dear Roshan, this EMI date benefit ‘ll be in the first month only after that, it does not matter but due to this first month, there ‘ll be a bit more interest saving and it ‘ll create a Gap in over all interest payment. This Gap is small, may not look meaningful for few people but Gap is Gap. 🙂

      Thanks

      Ashal

      1. roshan says:

        Hello Ashal,

        I am not clear on how there will be EMI date benefit for first month if i park all surplus funds from day 1 in MG ?

        Thanks,
        Roshan

        1. ashalanshu says:

          Dear Roshan, do you have Drawing power equal amount to park into your MG account? If the answer is yes, no impact ‘ll be there on interest due to your EMI date. But if you are parking only partial amount, the EMI amount deposited on a earlier date means the interest part of EMI ‘ll remain as part of surplus amount for few extra days and it ‘ll impact the interest calculation and ultimately a bit less interest ‘ll be paid.

          Thanks

          Ashal

          1. roshan says:

            Hello Ashal,
            I have a basic question. Let us assume that my emi date is 10th of every month. Now interest to be deducted at end of the month will be calculated from 1st to end of the month or from 10th of previous month to 10th of current month?

            Thanks,
            Roshan

            1. ashalanshu says:

              Dear Roshan, the interest is calculated on daily basis from 1st to last day of the month in question.

              Thanks

              Ashal

      2. coolrohitlad@gmail.com says:

        Hi Ashalanshu,

        First of all thank you for putting this extremly helpful information here.

        I have home loan of 34 Lakh in ICICI bank at ROI 10.65%. My current outstanding balance 33 Lakh. Right now SBI have ROI 10.15%.

        If I transfer my current loan to SBI then Balance transfer cost will be approx 38,000 Rs. (16,000 processing fee + 18,000 mortgage charge + 4,000 other charge).
        Following is my questions.

        1. Should I transfer my loan to SBI? I am hasitating becasuse I need to pay extra 38,000 Rs.
        2. Is there de-mortguage charges applicable when loan is closed?
        3. If I decide to transfer my loan to SBI Maxgain then,
        a. Which one is preferable? Invest 2 Lakh Rs. in FD for 2 years at 9.5% ROI OR parking 2 Lakh in Maxgain OD account?

        b. can I continue my ICICI lombard Insurance policy after transfering loan to SBI.

        c. Is general home insurance is compulsory to take from SBI. I already have home insurance from ICICI bank.

        Please advise.

        Thanks,
        Rohit

        1. ashalanshu says:

          Dear Rohit, in my personal view, if merely the ROI is the main pain point, please opt for ROI conversion within ICICI by paying a conversion fee of 0.56% of your outstanding balance amount.

          Your take please.

          Thanks

          Ashal

          1. coolrohitlad@gmail.com says:

            Hi Ashalanshu,

            Thanks for your reply.

            1. ROI is one of major point but in addition to that I also concerned about maintaining liquidity of my money. Because I don’t have much saving which I can use in some emergency, I think Maxgain will allow me to withdraw the money anytime I want. ICICI does not have this facility.
            I also come to know that for March month processing fee of SBI will 1000+service tax fix. So in my case transfer cost will be approx 20,000.
            So do you think it is still not advisable to transfer.

            2. Is there de-mortguage charges applicable when loan is closed?
            3. If I decide to transfer my loan to SBI Maxgain then,
            a. Which one is preferable? Invest 2 Lakh Rs. in FD for 2 years at 9.5% ROI OR parking 2 Lakh in Maxgain OD account?

            Thanks,
            Rohit

            1. ashalanshu says:

              Dear Rohit, OK. Go ahead.

              No there are no demortgage charges. As you want to use money for emergency also, park it in Max Gain.

              Thanks

              Ashal

            2. coolrohitlad@gmail.com says:

              Thank you Ashal for your useful guidance.

              Rohit

  85. ashalanshu says:

    Dear Roshan, in case of Max Gain, loan term becomes insignificant as interest outgo changes based upon your surplus amount. So 15-20 or 25 or even 30Y loan can be taken for Max Gain.

    thanks

    Ashal

  86. roshan says:

    Dear Ashal,
    Correct me if i am wrong here. In a normal home loan scheme taking a shorter tenure loan makes more sense as you would be paying lesser interest overall at end of the tenure compared to a higher tenure loan . (assuming that borrower can afford emi difference between a 15 year and 20 year loan with their current take home salary)

    However in case of Maxgain the interest savings will be same irrespective of tenure if a borrower follows all recommendations mentioned in this discussion( i,e park surplus funds in MG account,use credit card to pay bills,transfer salary to MG account on day of credit,Create SI to move funds from SG to Savings a/c 1 day before emi date etc ) . Is this assumption proper? Or does it still make sense to go for a lower tenure loan?

    Thanks
    Roshan

  87. ashalanshu says:

    Dear Roshan, it’s overdraft.

    Thanks

    Ashal

  88. roshan says:

    Dear Ashal,

    when adding maxgain account as 3rd party account in HDFC which option should i choose

    a) Current
    b) Overdraft
    c) Loan

    Thanks,
    Roshan

  89. Bala says:

    Dear Ashal,

    Looks like when I got my regular home loan converted to Maxgain, the Insurance cover policy premium (that was unused ) also added to the Limit and drawing power. This affects in finding what is actually the Available Balance or the exact surplus I have in my account.

    I am sending the statements of my account to your email

    Kindly review and give your comments so that I can understand the statement better

    1. ashalanshu says:

      Dear Bala, thanks for the update. Let me check my personal mail and ‘ll answer you there.

      Thanks

      Ashal

      1. Bala says:

        Thanks Ashal for your help and guidance over email

        I will contact SBI RACPC tomorrow as I am on travel from Wednesday

        If something useful for everyone comes up I will post details.

        Regards
        Bala

        1. Bala says:

          Dear Ashal,

          The branch is completely ignorant about the details

          I contacted RACPC on the issue of DP and Limit being higher in my Maxgain. As there are too many details I had sent you a personal mail instead of posting here. (Sorry for a long mail)

          If you can clarify them it would be great.
          Regards
          Bala

          1. ashalanshu says:

            Dear Bala, I confirm the receipt of the personal mail. Please wait for my personal reply. 🙂

            Thanks

            Ashal

  90. icoshikhar says:

    Hi,

    I have recently take home loan from SBI. It got sanctioned on Jan 25, 2014. I have not yet paid an EMI. They have provided me Term Loan account under the Yuva Loan scheme. Is it possible to convert it to Max Gain account now? Please help.

    I went to SBI RACPC. They said it is not possible as I have YUVA Loan.

    Requesting prompt response,

    With Regards,

    Shikhar Maheshwari

    1. ashalanshu says:

      Dear Shikhar, please contact your AGM in RACPC for clarification on the matter.

      Thanks

      Ashal

  91. ashalanshu says:

    Dear Rohit, what’s your drawing power on both dates? Can you share your account statement with me in exl. sheet over my personal mail id?

    Thanks

    Ashal

    1. rohit says:

      Hi Ashal,

      I have shared excel. Please help on this.

      Thanks,

      1. ashalanshu says:

        Dear Rohit, I confirm the receipt of your mail. Please wait for my detailed reply over e-mail.

        Thanks

        Ashal

  92. rohit says:

    Hi,

    I have loan of 32,50,000 + 1,14,000 sbi life shield. Total is 33,64,000 with ROI 10.4%.My final disbursment is done on 20th Jan and EMI is 29,867. In jan the Book Balance was -32,68,264 and Available balance was 1,87,059(which includes my saving money as well).
    On 1st feb the Book balance was -31,68,424 and debit interest is 23,027 and Available balance is 1,93,152.
    Can you please explain how this is calculated. How the difference of 99840 in book balance and 6093 in avalable balance is calculated.
    Thanks.

  93. ashalanshu says:

    Dear Jatin, please opt for rate switch over post final disbursal.

    Thanks

    Ashal

  94. jatin says:

    Subject: How to calculate, should I switch interest rate or not?

    Hi,

    SBI Maxgain gives an option to switch interest rate one in life time to existing user. This will be liable to .59 of limit/drawing power.

    Drawing power/limit can’t be reduce until builder handover the property & get registration.

    As of today, I have limit of 22L. Current book balance ( of -6.75L).
    I will required additional 6.5L for registration & make remaining payment to the builder. Which means I’m going to use only 13.25L out of 22L.
    I’m expecting to get position within 3 months.

    I’m in dilemma, should I switch interest rate today or I should wait for another 3 months to get the position & switch.
    How to calculate the EMI difference for both the interest rate to know I will gain/lose money by switching interest rate (consider .59 penalty need to pay + interest on that over a period)?

  95. ashalanshu says:

    Dear Rohit, the EMI credit is called Deposit transfer.

    Thanks

    Ashal

  96. rohit says:

    What is DEPOSIT TRANSFER in max gain

  97. luckyr18 says:

    i m giving info because i have two max gain accounts

  98. luckyr18 says:

    i m giving info.

  99. luckyr18 says:

    interest in od account is counted on per day basis.

    1. ashalanshu says:

      Dear Lucky, are you asking or giving info? Yes the home loan in Max Gain is on daily reducing balance.

      Thanks

      Ashal

      1. luckyr18 says:

        i m giving info because i have two max gain accounts

  100. Parag Kumar says:

    Hi Ashal,

    I had a small doubt. Whenever the EMI is deducted from our account, the same gets credited to OD account and from that, the interest gets deducted on the last day of the month. Does our OD account earn interest for the EMI amount credited to the OD account from the day its deducted till the last day of the month?

    Means suppose i have a EMI of 30k which is deducted on 10th of every month. This EMI amount gets deducted from my savings amount and gets credited to my OD account on the 10th of every month. This 30k remains in my OD account upto month end i.e for almost 20 days. So my question is does this amount of 30k in OD account for 20 days every month contribute in reducing the interest amount deducted at the end of every month.

    Thanks,
    Parag Kumar

    1. ashalanshu says:

      Dear Parag, NO, there is no interest earning in OD account. The thing is if there is any surplus parked by you, it ‘ll bring down your book balance and thus the calculated interest ‘ll be lower and accordingly this lower interest ‘ll be debited on the last day of the month. Remaining interest ‘ll be there in OD account as it is becomeing part of your already available surplus.

      Thanks

      Ashal

  101. ashalanshu says:

    Dear Hitesh, can you share your loan account statemwnt in exl. with me?

    Thanks

    Ashal

  102. ashalanshu says:

    Dear Rajesh, you are not paying interest twice. On EMI date, the interest part of EMI is merely credited into your OD account after it’s transferred from your SB account. On the last day of the month, the actual calculation of interest takes place and accordingly the calculated interest is debited from the OD account not the one you paid through your EMI.

    The 12.25% ROI is due to old loan, you have the option to convert it to a lower ROI by paying a conversion fee of 0.56% of your as on date drawing power.

    Thanks

    Ashal

  103. rajeshaggy says:

    I have a home loan of Rs 40 Lakhs taken in 2009 alongwith MG acct facility. Currently my balance in max gain is about (-) 18,14,245 and available balance is 20,49,971. Drawing power is 38,64,216. The rate of interest being charged is 12.25%. The interest per month is working out to the tune of 18-19000 per month. In addition an EMI of 34830.00 is being transferred from my SB to OD every month after a moratorium of 18 months. I keep on putting surplus funds in OD acct as and when avail to me.

    Now my question is

    (a) Why is the interest at the rate of 12.25% is being charged again monthly as I believe that the EMI which I am paying contains the interest and principal component both for the entire loan amount for the entire loan period. So why is the double charging of interest??
    (b) If double interest is being charged where is it being adjusted??
    (c) The entire EMI gets deducted against Rs 40 Lakhs Principal?? Does this mean that interest component of EMI is treated as zero and the interest is levied at the end of the month??
    Please reply ASAP

    Thanks

  104. hiteshpanchal says:

    Dear Ashal,
    Thanks for the tips on using SBI Maxgain acount. I have a SBI MG acccount with a total loan of Rs. 22,25000. The account started in Sep 2011. Today I just parked a surplus amount of Rs 2000 from my salary acccount to the SBI MG account to check the netbanking transaction. But after the transaction aslo I could see the Available balance as Zero. Instead the amount got reduced from Book Balance . Previously the Book Balance was -21,43,032.00 which has now become as -21,41,032.00.. Does that mean that I have done a pre-payment of Rs 2000 which I cannot withdraw again.
    Also I tried to add my salary account as beneficiary into the OD account, but couldn’t find any option to do so.
    Note: My SBI MaxGain Account is linked with another SBI Joint account an I have a single user-Id for both.

  105. ashalanshu says:

    Dear Sunnyvijay, thanks for the praising words. Regarding your query, If all the down payment money for the house is paid by you and your wife’s name is only for operation purpose and the fact that she is a home maker, you can claim full interest for yourself. Please do note, if the house is self occupied, the maximum interest ‘ll be limited to 1.5L Rs.

    Thanks

    Ashal

    1. rajeshaggy says:

      I have a home loan of Rs 40 Lakhs taken in 2009 alongwith MG acct facility. Currently my balance in max gain is about (-) 19 lakhs and available balance is 19 lakhs. The rate of interest being charged is 12.25%. accordingly the interest per month is working out to the tune of 18-19000 per month. In addition an EMI of 34830.00 is being transferred from my SB to OD every month. I keep on putting surplus funds in OD acct as and when avail to me.

      Now my question is

      (a) why is the interest at the rate of 12.25% is being charged again monthly as I believe that the EMI which I am paying contains the interest and principal component both for the entire loan amount for the entire loan period. So why is the double charging of interest?? Please reply ASAP

      Thanks

  106. sunnyvijay says:

    Dear Ashal,

    Never in history of internet I have seen anyone answering queries for the benefit of others and their enlightenment like what you are doing on this forum. Great Job.

    One quick query:
    House owned jointly in my and my wife`s name
    Max gain loan with my name and my wife`s name
    However my wife is not working and a home maker.

    In that case can I claim 100% of interest paid (whatever applicable within limits) or I can claim only 50% of interest paid ?

  107. ashalanshu says:

    Dear Dr Kishan, thanks for your praising words. For your understanding – Bank is not maintaining 2 separate accounts. There is only one account which is Max Gain or OD account. Yes in the system, the loan amortization schedule is fed to calculate the principal part that’s to be recovered from each EMI. So reduction in Drawing Power happens only on the basis of this loan amortization schedule. Basic calculation of OD account, interest is done as per a routine OD account.

    If you want to use the section 80C benefit, over and above the routine EMI repayment. you w’d have to contact your loan serving branch to adjust the principal as per your need from the available surplus.

    You can withdraw only available balance. If it’s 5L, your maximum limit is 5L. You can not withdraw 10-15L from your account. So Available balance is key here to look out for.

    This 1Rs. thing may be due to some software related problem (back end job in SBI). So contact loan serving branch to get the job done.

    Thanks

    Ashal

  108. kishanm77 says:

    Dear Ashal,
    Hats off to you. Your patience in answering each query pointwise and clarifying each doubt is phenomenal. If only some more experts like you were available then the situation would be quite different in the financial world.
    About the working of Maxgain, does the bank maintain two accounts or two sections in the same account so as to identify the principal repayment component of EMI and the surplus amount kept parked there by the customer. Because as you said there is no relief in income tax for the amount parked as surplus but there is surely a relief on the principal repaid as part of emi. That simply means the bank must keep a track of both heads separately or else they would not be able to give the interest certificate at the end of the financial year.
    Secondly is there any system of part prepayment in Maxgain as there is in the classic home loans. As you know whenever we make a small payment in the classical loans, although the money is gone forever, it is considered as principal repaid and thus is countable for the income tax savings under section 80c (max 1 lac). This, as I understand is not available in Maxgain system since there is no part prepayment. If we put extra amount in MG account it is treated as surplus and not as principal repaid and thus will not be countable towards 80c savings. Am I correct? If I am correct then it means that people having loans with total scheduled yearly principal repayment of less than Rs 1 lac may be at a disadvantage in Maxgain system since the option of part prepayment of home loan and using it for reducing income tax is not available in Maxgain system
    Thirdly, suppose I am NOT making any surplus parking in the MG account and am just paying the normal monthly EMI can I still withdraw a part of the repaid principal (as a part of EMI)? In other words can i withdraw more than the surplus amount parked in that account? Like if my loan outstanding is Rs 25 lacs and I park 5 lacs for decreasing interest outgo, then if need arises, can I withdraw something like 10-15 lacs for some other purpose and use this money for my personal requirement instead of getting some personal loan as the ROI of personal loan is anyways higher than Home loan ROI. If yes then what is upperlimit upto which I can withdraw again? If it could be done then there is a big advantage of maxgain system.

    I recently shifted from SBI easy home loan (also called term loan) to SBI maxgain system. As I understood from the bank officials at RACPC this has been made possible only after August 2012 and is described in SBI MASTER CIRCULAR HOME LOAN PART 3 PAGE 40. The processing fees they took for this purpose is RS 1000. The ROI, term of the loan etc remain the same as in the original loan. They do this by opening a new OD account and debit the OD a/c and repay the original home loan account(the loan account no. changes and therefore there is a requirement of re-doing the ECS process altogether) i.e. as good as a balance transfer from SBI to SBI. But one strange point was that they did not close the original loan account completely. They left Re 1 as remaining and asked me to foreclose the original loan account in the concerned branch. I wonder why they couldn’t the fore close the original account themselves.

    Thanks in anticipation
    Dr KISHAN

  109. ashalanshu says:

    Dear Tutun, in wordings of section 24 (b), there is no mentioing that home loan should be only a term loan and Over nDraft kind thing is not eligible. Please ask the commissioner to provide you in writen that OD/Current account is not eligible for 24(b) benefit.

    Alternatively you may approach to higher ups in Income Tax department.

    Thanks

    Ashal

  110. tutun says:

    During a tax audit (scrutiny case U/S 142(1) )by Deputy Commissioner of Income Tax at Kolkata, I was questioned regarding my MaxGain loan.
    I paid 1.73 lac as interest for a particular FY for my MaxGain home loan and had taken the tax benefit of 1.5 lac.
    The officer claimed that this loan is not eligible for the tax break and he will charge me tax on it. His reasoning was that this was not a term loan and my bank statement shows that I have used it as a current account.
    I am totally at a loss, and need supporting material to show the officer. I have called SBI and they are yet to get back to me.
    Can anyone help please with some pointers to tax laws?
    Thanks in advance.

  111. ashalanshu says:

    Dear Bhavin, please contact your loan serving branch for actual principal adjustment from your EMI.
    thanks

    Ashal

  112. bhavin says:

    Dear Ashal,

    Thanks a lot for putting this article. By reading your article I made a decision to change my loan from Private bank to SBI Max gain. Now my home loan is transferred to SBI Max gain. I have few doubts. before that let me give you the details of my loan. I got loan sanctioned as Rs. 19,41,000 (Somewhere in jul-2012) based on the balance of my Previous bank loan amount. By the time i got disbursment (7th Oct -2013) from SBI, it got reduce to 19,12,151. SO SBI Disbursed Rs. 19,12,151. But my limit was not changed and accordingly i was not given the transaction rights on my OD account. I asked them to reduce the limit and the transaction rights which i was given yesterday (i.e. 11th Nov-2013). I have paid first EMI of 18667 on 01st nov -2013. Account shows debit interest of 13163 on 31st oct 2013. Even after paying the first EMI, my drawing power is still as 19,12,151.

    Question:Should not Drawing Power be reduced to the principal amount paid of one EMI?

    Thanks,
    Bhavin

  113. msherikar says:

    Hi,
    My question is about the MaxGain Account with SBI.
    1) How to add SBI Max gain Home Loan Account in ICICI Bank Net Banking??
    I have added My SBI Maxgain Account as Loan Account in 3rd party Transfer.. Is that correct??
    Should i add it as Current Account or loan Account while adding in my ICICI 3rd party Transfer??
    Please do clarify me on this issue..
    – See more at: http://sohamfp.com/sbi-maxgain/#comment-20061

    1. ashalanshu says:

      Dear Msherikar, please opt current account in ICICI netbanking.

      Thanks

      Ashal

  114. Aarav says:

    Hi Ashal ,

    Could you please let me know which would be better investment(home loan is in name of my wife and me and both are paying EMI’s jointly)

    1. SBI maxgain at 10.05 %.With this i get income tax rebate @30% on interest part so the effective yield is 10.05- 3%=7%

    2. Fixed deposit at 9%.On this income my wife is not eligible for income tax as my wife left the job and is currently income-less and all the FD would be in her name(Since before she left the job she contibuted 5 Lacs in SBI maxgain account and now she can transfer that amount to her normal bank account and create a fixed deposit out of it).So effetive uield remains as 9%

    Is my calculation correct ot is investing in FD a bad idea ?

    Regards

    Sumant

    1. Aarav says:

      help…Please answer …my above query

      1. ashalanshu says:

        Dear Aarav, due to positive compounding, FD ‘ll provide better return over Max Gain in the long run.

        Thanks

        Ashal

  115. ashalanshu says:

    Dear Ramp, HSBC, CITI, Standard & Chartered, IDBI are offering similar product. PNB is also offering a combo product where 80% loan amount remains as normal home loan and remaining 20% as OD. Please check on your own also, if any other bank which is available but not included by me.

    ICICI was earlier offering this product under the brand name, Money Saver Home Loan, but withdrew for new customers.

    Thanks

    Ashal

  116. ramp says:

    Thanks for the Quick Response Ashal.
    So it looks like there is no need of SB Account, as we can pretty much use OD account to transfer funds/pay bills/misc usage.
    Please confirm once.
    Is any other bank providing such facility apart from SBI?

  117. ashalanshu says:

    Dear Ramp, let me try to answer your queries.

    1. Can I be the main applicant for home loan process? I am inclined to do this, otherwise the money transfer and misc processes will need my wife’s presence/signtature.
    Yes. actually both of you should be co-owner and co-applicant to be eligible to claim tax benefit individually from the property.

    2. I am planning to park small amount for surplus account(OD) as just now initial disbursement happened. But I do not have SBI SB account.
    Are they providing SB account as part of this complete Max gain loan process?
    You may open a brand new Sb account in your loan serving branch. You ‘ll get netbaking rights immediately on this new SB account.

    3. After the final disbursement happens if needed, will I be allowed to transfer money from OD to different bank SB account online?
    Yes.

    4. From the thread, I saw that you suggesting transferring complete salary to OD account and using SB credit card from daily expense usage.
    This means, for credit card bill payment I need to transfer required amount from OD, is that can be done online? or need to transfer to SB account through OD Cheque and then usenet banking for credit card payment. Also, please let me know OD account is as good as normal account, in the sense i will be able to do Third party transfer from any other bank account to this account online?
    I’m paying my own Insurance prem., railway and airline ticket booking, online shopping, all Crdit card bills other bank acount transfer from my own OD account.

    5. From the above thread, it clearly evident that eventhough you have parked surplus amount, you will be paying same EMI/Interest just that whatever will be the saving due to surplus will get added to your OD account each month and you can make use/transfer only once the final disbursement happens.
    EMi ‘ll remain same but the interest saving ‘ll be available to you as surplus. Yes till final disbursal, you can not withdraw this added surplus (saved interest).

    Thanks

    Ashal

  118. ramp says:

    Hi Ashal,

    I must say this forum/blog has got very valuable informations. Appreciate the initiative that you have taken.
    I have recently purchased property worth around 88 lakhs. So I will be taking loan of 70 lakhs from SBI Max gain.
    My wife is main applicant for the Property and I am co. Possession/final disbursement will happen in 2016.
    My queries:
    1. Can I be the main applicant for home loan process? I am inclined to do this, otherwise the money transfer and misc processes will need my wife’s presence/signtature.
    That might make the process more lengthier.
    2. I am planning to park small amount for surplus account(OD) as just now initial disbursement happened. But I do not have SBI SB account.
    Are they providing SB account as part of this complete Max gain loan process?
    3. After the final disbursement happens if needed, will I be allowed to transfer money from OD to different bank SB account online?
    4. From the thread, I saw that you suggesting transferring complete salary to OD account and using SB credit card from daily expense usage.
    This means, for credit card bill payment I need to transfer required amount from OD, is that can be done online? or need to transfer to SB account through OD Cheque and then use
    net banking for credit card payment.
    Also, please let me know OD account is as good as normal account, in the sense i will be able to do Third party transfer from any other bank account to this account online?
    5. From the above thread, it clearly evident that eventhough you have parked surplus amount, you will be paying same EMI/Interest just that whatever will be the saving due to surplus will
    get added to your OD account each month and you can make use/transfer only once the final disbursement happens.

    Eagerly awaiting for your reply.
    Thanks Ashal.

  119. Santosh Mahajan says:

    Thanks a lot Ashal!

  120. ashalanshu says:

    Dear Santosh, first of all congratulations to you for getting the possession of your house. Regarding transaction rights, if final disbursal is done, contact your loan serving branch and you ‘ll get it immediately.

    Regarding Tax benefit for past years’ interest, it ‘ll be available to you within the over all limit of 1.5L Rs. @ 20% in 5 successive FY starting from 2013-2014, if the house in question is self occupied. If the house is on rent, There ‘ll be no limit of 1.5L Rs.

    thanks

    Ashal

  121. Santosh Mahajan says:

    Dear All,

    Finally after almost 2.5 years of wait time, I got the possession of my home.
    I have SBI maxgain account with 1Lac available balance. Now I want transaction rights on that account. I know that we need to contact the base branch to get that. But do I need to produce any documents to get transaction rights.
    On the other hand how can I claim the interest in my IT returns for all these 2.5 years?

    Thanks in advance,
    Santosh.

  122. rohit says:

    What is debit interest in SBI Max gain

    1. ashalanshu says:

      Dear Rohit, the Debit Interest means the interest amount is debited as per calculation on the last day of the month. Whenever you are depositing any amount be it your EMI or surplus fund parkingit’s a credit entry.

      Thanks

      Ashal

  123. ashalanshu says:

    Dear Dhruv, Relax. I do have several examples with me for parking money in MG account before final disbursal.

    Thanks

    Ashal

  124. dhruvbudhwar says:

    Hi Ashal

    I Happen to speak with a bank representative on this same issue. They say it is not allowed to put any money in the Max Gain Account before possession of the property. They say this can lead to the closing of the loan account.

    Can you please throw some more light on this.

    Thanks.
    Regards
    Dhruv

  125. dhruvbudhwar says:

    Thanks Ashal.

  126. ashalanshu says:

    Dear Dhruv, yes the surplus parked by you ‘ll help to save interest outgo. So you may park the extra money.

    thanks

    Ashal

  127. dhruvbudhwar says:

    Hi Ashal,

    I had opted for the 18 month moratorium period , but now i can manage paying the full EMI amount 40K a month. Is it advisable for me to start putting money equivalent to my EMI amount in the MaxGain Account?

    The property i have invested is under construction and i am expected to get possession around June 2015.

    I do understand that i will not be able to withdraw any money from the account till possession.

    Regards Dhruv

  128. Dear Deepak, Please wait for my reply again as usual. 🙂

    thanks

    Ashal

    1. knssiva says:

      Hi Ashal,

      I have SBI maxgain account and SBI general insurance.

      Is any of the above products cover the EMIs incase of jobloss. Please advise.

      Regards,
      Siva

      1. ashalanshu says:

        Dear Knssiva, no jobloss is not covered.

        thanks

        Ashal

  129. Dear Kulkarni, thanks to you that a lot of people got benefited from this thread.

    thanks

    Ashal

  130. Dear Bala, in first case – parking only & no adjustment towards loan, you saved interest but loan ‘ll run for 12Y term & liquidity is there with you for this 5L Rs.

    For 2nd case, as the 5L Rs. is adjusted towards the basic loan. immediately the principal repayment share in your EMI ‘ll increase & your loan ‘ll be over early.But liquidity of 5L Rs. is not here.

    So take your pick.

    thanks

    Ashal

    1. Bala says:

      Thanks a ton Ashal

      I was just trying to work out whether I will save any amount
      – by keeping the surplus in SBI Maxgain
      – or by prepaying the principal

      I looked at a hypothetical situation. Please clarify whether it is correct?

      Loan Amount = 30 L
      term remaining 12 years
      Surplus available in hand = 30 L

      I just worked out the excel sheet for SBI Maxgain for this situation. I found that every month I get an additional interest surplus equal to the EMI amount – over and above the outstanding principal – which I need to withdraw – since that amount will not gain any interest in the Maxgain account.

      Every month I should draw this amount to keep
      the surplus in the account = outstanding Loan principal

      and pay it back as the EMI for that month.

      Hence can we say that – under the remote situation that we do not need the liquidity of the amount

      – paying back the loan amount and foreclosing the loan
      AND
      -starting with the 30L and keep drawing the amount equal to the EMI to keep surplus equal to outstanding principal every month

      will both be SAME in terms of interest out go for the account holder?

      Basically by keeping surplus in the MAxgaininstead of foreclosing, you end up having access to the funds equal to Principal during the entire tenure – liquidity.
      Am I correct?

      1. ashalanshu says:

        Dear Bala, yes your understanding is correct.

        thanks

        Ashal

  131. Dear Deepak, it seems I have answered all your queries in personal mail. Do you want me to repost the same here or is it OK to you?

    thanks

    Ashal

    1. Deepak says:

      Thanks Ashal. I don’t think it is required to paste your replies to my email here. However, could you pls have a look at your mail. I had a few follow-up questions, if you could kindly respond.
      Regards,
      Deepak

  132. Deepak says:

    Dear Ashal,

    I am new to this forum, and have recently purchased a flat in Mumbai. I am going through all your posts and must-say, they are all very informative. Appreciate all the kind effort. A few questions from my side, if you could pls help with, at your convenience:

    Can the Stamp duty, Registration, Service Tax & VAT charges be claimed under Section 80C for an Under Construction flat in Mumbai?
    If yes, will this all be a part of the combined maximum limit of Rs 1 lac under section 80C or will this 4 charges be considered over and above the Rs 1 lac limit?

    Property insurance:
    I understand from your earlier posts that property insurance is mandatory for taking a loan from SBI. However, do i have to take this property insurance now (when the flat is under construction) or would it be required to be taken only once I get the possession?
    Is taking a property insurance a pre-requisite for loan disbursal from SBI even for an Under construction flat? I have applied for SBI loan with all documents, but no property insurance. What will happen in this case?
    Also, which is the best choice (cost-wise and considering other paramters) for property insurance: SBI or some other option?

    Loan insurance:
    I understand from your earlier posts that this is not mandatory for SBI home loan. Am I correct in my understanding?
    However, also, considering that I do not have any real dependants on me, is it necessary for me to take a loan insurance or atleast some life insurance (Pls note that I am basically totally uninsured, except for the employer insrance). Pls share your opinion.

    New rule for 1% TDS for House purchase:
    Does the TDS calculation include only Flat price on ST & VAT also?
    Will SBI deduct the TDS at every disbursal OR Should i deduct the Total TDS (on my payment + loan payment from Bank) from my amount only?

    I currently stay in a rented flat in Mumbai. After getting the possession of the flat purchased by me (in the same city, Mumbai), is it possible for me to claim both HRA benefits as well as Loan benefits for taxation purposes?
    Is it necessary for me to have a justifiable reason for me continuing to stay on rent even though I have a owned house here? Is it also necessary that the rented flat should be closer to my office than my owned flat? What (if any) are the criteria?
    Also, assuming my loan payment is done for 6 months for FY 13-14 (Oct 2013 to Mar 2014) and I get the possession in FY 13-14 say on 1st Jan 2014:
    • Can I claim 6 months full interest this year (Oct 2013 to Mar 2014), since during the year the flat was partly under construction.
    • Regarding the Rent income from the flat for 3 months (Jan 2014 – Mar 2014), if I show Deemed rent, will there be any proof required for this? Is there some method to calculate this deemed rent per month?

    Thanks a ton, and appreciate the effort.

    Regards,
    Deepak

  133. Bala V says:

    Hello Ashal,

    Hats off to you for clarifying the doubts of several people in this forum regarding SBI Maxgain account

    I was also “assuming” that if we park some surplus in the Maxgain OD account,
    the principal portion will get increased in the monthly EMI and tenure will automatically come down. But that is wrong as you said.

    As per your explanations, the interest saved is added to the parked surplus in the account every month and interest is again calculated next month on this enhanced surplus. When I checked the Maxgain account as per your explanations I find the that the amounts match. Thanks.

    I was jut trying to understand the Maxgain from another perspective too.. Hope you can help me here

    Let me say I have a SBI Maxgain loan of 30L (final disbursements done and EMIs are being paid already) and the reamining term is 12 years.

    If I have got some money say 5 lakhs now and I do not really need the flexibility to keep that 5 lakhs liquid through the OD account
    Then
    – is it wise to deposit in the OD account and keep saving interest until outstanding principal becomes 5L?
    – or is it wise to make the prepayment of 5 lakhs principal to the maxgain account today itself and reduce the outstanding principal?

    Which will be better or will both be the same exactly – from interest charged point of view?
    Except that the first method will give you additional liquidity for the 5 lakhs?

    Regards
    Bala

  134. Kulkarni P says:

    Wow. I created this thread to get some answers for my SBI Max gain account. Looks like quite a few people benefited by this thread. Total 722 responses 🙂

    All thanks to Ashal sir.

    Padmanabh Kulkarni

  135. Dear Kariyan, Parked money does not earn any interest. The interest part coming from your EMI is saved as per your parked amount & gets added into your existing surplus amount.

    Thanks

    Ashal

  136. Dear Parag, this is the classic mistake for Max Gain, people like you do. In case of Max Gain, the principal is adjusted as per your loan amortization schedule. Any benefit due to parked surplus ‘ll be there in the form of lower interest deduction & accordingly the saved interest ‘ll get added up into your existing available balance (parked surplus).

    Interest is deducted on the last day of the month after calculating each day’s end balance & applicable interest for that day.

    thanks

    Ashal

    1. Kariyan says:

      Just to confirm. Parked money gets interest and made as available balance to withdraw. No effect on Principal part.

  137. Parag Kumar says:

    Hi Ashal,

    Consider that the final disbursement has already happened.
    & i have some accumulated amount in the OD account.

    As a result of it, the principal should keep on reducing somewhat more than it would have originally. My question is that where does the excess principal amount we have repaid show up? Does it show up in the Available balance, Book balance or Drawing Power?

    In my case, the amount of principal repaid (known from Debit Interest)is not matching the amount by which Drawing Power reduces.

    Last month just before the Debit interest happened,

    Book Balance: -31,59,502
    Available Balance: 4,07,863
    Limit: 35,67,365
    Drawing Power: 35,67,365

    After Debit interest of Rs. 26464 happened on 31st (EMI is 42385)

    Book Balance: -31,85,966
    Available Balance: 3,72,579
    Limit: 35,58,545
    Drawing Power: 35,58,545

    I am not getting why the deductions is happening like this.
    Can you please help me analyze this?

    Parag Kumar

  138. Dear Bunty, yes, you w’ds have to sell at guidance value at that time, which ‘ll be higher than your own guidance value as on date. So the Long Term capital gain ‘ll be more to you & thus your tax liability ‘ll be higher.

    Thanks

    Ashal

  139. Bunty Raja says:

    Thanks for replying..You mean i will have to sell on guidance value :(..or buyer should not take the loan from SBI.. 🙂

  140. Dear Bunty, the taxation point ‘ll come into angle when you ‘ll sell it. 🙂

    thanks

    Ashal

  141. Dear Bunty Raja, from taxation point, it’s advisable to register on 41L Rs. in your case, but to opt it or not ‘ll be your personal call.

    thanks

    Ashal

    1. Bunty Raja says:

      I did not understood properly “from taxation point, it’s advisable to register on 41L Rs”..does it mean that all the other banks are doing it wrongly..

  142. Bunty Raja says:

    Property Value : 41 lacs

    Down payment : 4 lacs (for now i can afford this much only )

    I want to avail the benefit of interest rate of 9.95% for loan up to 30 lacks.

    Down Payment for 30l –> 6 lacs (2 l shortage as i have 4 lacs only) which i can pay in between. I went through your answers in the forum and got to know that it can be done i.e.(20:80 ratio).

    but i heard that the reg + stamp they wont charge on guidance value they will charge on purchasing value.

    so it comes around 7% of 41 lacs —> 2.81 lacs

    but for other banks according to guidance value it will come around half of it — > 1.4 lacs

    So here we are loosing 1.4 lacs.

    So you still think that its the right way to go for SBI Maxgain or is there any way that we can avoid this.

  143. Dear Nsabhayankar, the ECs bounce may invite penal interest as well as penalty for each individual bounced ECS. If this hapens too many times (normally 3 times in a year), the same can impact your CIBIL score also. Please make sure that you are able to pay your ECs amount on time.

    thanks

    Ashal

  144. Dear Parag, please check for Moratorium period if any with the loan serving branch. Technology wise, I already answered your basic query. 🙂

    thanks

    Ashal

  145. Parag Kumar says:

    Thanks Ashal. I am not being greedy. But was just trying to take advantage in case its technically possible. Regarding moratorium, my 100% disbursement is already done and i am doing full EMI payment from day 1. I have not paid any pre-emi also.

  146. nsabhyankar@gmail.com says:

    what happens if an ECS bounces for a month?

    I have signed an ECS mandate for the transfer of EMI from my salary account to MaxGain account. I had a few FD’s in my salary account and was under the impression that they were linked to the account and will be broken to honour the ECS. However, that did not happen and the ECS bounced due to low balance.

    However, there was a deposit equal to the EMI amount on the ECS date in my MaxGain account. The description reads ‘CEMTEX deposit’. This amount was later withdrawn.

    Is this an arrangement by SBI in case the ECS bounces? Anyone has had this kind of experience?

  147. Dear PARAG, looking to maximize the profit is a good thing but one should not be greedy to lose qall the HONEY. In case you are going to make SI from OD to SB on the same day i.e. EMI, the EMI ‘ll bounce & rest you know already, I hope.

    The end of the day balance is considered for calculation.

    For not reduction in drawing power, I can not comment with out getting into details. In all probability, there may be a moratorium period on your loan.

    thanks

    Ashal

  148. Parag Kumar says:

    Also i have one more question. When i see my account statement, i notice that
    Drawing power = -Book Balance + Available Balance. But drawing power is not getting reduced every month. Also, according to the interest outgo which is calculated every month end, i calculated principal repaid uptill now. But that figure is not matching disbursed amount – Drawing power. Is something wrong with my principal repayment?

    Thanks,
    Parag

  149. Parag Kumar says:

    Hi all,

    I have two questions related to SBI Maxgain.

    1) My EMI is deducted from my SBI savings account on 15th of evey month. I have a standing instruction set which transfer the EMI amount from OD to savings account one day before the EMI date i.e on 14th. Is it possible to set the standing instruction on 15th itself so that the maxgain benifit can be maximised i.e i can keep the same amount in OD for one more day thus resulting in more gain.

    2) SBI Maxgain is a daily balance reducing type of loan which means our interest outgo will depend on what amount was there in the OD account on each day of the month. I wanted to know at what time of the day is the balance taken into consideration. Is it end of the day or start of the day?

    Thanks,
    Parag

  150. Reji m says:

    Thanks Ashal.

  151. Dear Reji, actually it’s not RBI but the internal circular of SBI. So as per that circular, yes you can not avail Max Gain if you are already holding 2 properties.

    thanks

    Ashal

  152. Dear Subhojit, instead of paying 5L Rs. please contact SBI for base rate linking & rate of interest conversion fee. you ‘ll get the new ROI by paying 0.56% of your outstanding loan amount. Please invest this 5L Rs. elsewhere to earn better return.

    thanks

    Ashal

  153. Reji m says:

    Hi Ashal,

    Are you aware of any restriction on availing Max Gain account? Today I visited SBI to collect the loan application. The officer said, if you own 2 properties, as per RBI order Max Gain facility won’t be available. This is irrespective of whether we have availed MAX gain facility in the past or not.

  154. subhojit ganguly says:

    How to reduce EMI in SBI Easy Home Loans ?
    I have the said loan (teaser rate for first 3 years – 8,9,9) and the third year will be over by mid Sep 13
    I have outstanding loan amount of 19.23 lacs.
    I also have 5 lacs in my savings

    Will I be able to reduce my home loan EMI after prepaying 5 lacs
    What is the process of doing so and what will be my EMI post teaser rate period

  155. Dear Vimal, from the calculation of interest point, this thing is not impacting you. Still if you want to rectify this, please contact your loan serving branch.

    thanks

    Ashal

  156. vimal says:

    Hi,

    I have started paying my regular EMI for my home loan. My EMI debit happens on 5th of every month. But the drawing power is reduced only on 25th of every month. This means my principal repayment happens only on 25th of every month. From 5th to 25th, the principal repayment is shown as available balance. Is this approach advisable?

    Thanks and Regards,
    Vimal

  157. Kariyan says:

    Hi,

    I did not see such problem with RACPC Koramangala.

    As Ashal was mentioning, ask them to show the copy of RBI circular

    -Kariyan

  158. Dear Bin, please demand the copy of the RBI circular from RACPC staff. As far as I know there is no such circular.

    Thanks

    Ashal

  159. Dear Santosh, yes if there is no balance in SB account, the EMI ‘ll be treated as bounce one & continuous bouncing ‘ll impact your CI|BIL record.

    thanks

    Ashal

  160. bin says:

    Hi Kariyan,

    RACPC Basavanagudi Branch, Banagalore. Already contacted bangalore AGM, but no avail. What can I do next? Awaiting your suggestions.

  161. Kariyan says:

    Which RACPC branch is doing like this?

  162. bin says:

    Hi Ashal,

    My RACPC team not agreeing to debit the EMI from my SBI savings account. They are telling that RBI mandates to debit the EMI only from salary account. Is it correct? My salary account is with another bank.
    Also they are giving the ECS dates only on 5th, 15th and 25th. Reason given is RBI mandate. I am not convinced with their explanation. Awaiting your response.

  163. Santosh Mahajan says:

    Hi,

    I have available balance of 63K in my maxgain account and my EMI goes from SBI saving account. Suppose I do not keep any balance in my saving account will that affect my CIBIL score? I mean will that be considered as EMI miss?

    Thanks and best regards,
    Santosh Mahajan.

  164. Sudarshan B says:

    Hi Ashal,

    My loan is fully disbursed and i have submitted my sale deed to racpc but my transaction rights are not yet activated its been a month now. If I ask my branch to give me transaction right they are asking for a full arrangement letter from racpc. Will this letter be sent by racpc people or should I have to go and collect.
    Appreciate your help.

    1. Dear sudarshan, the branch staff is making fool of you. there is no such requirement of full disbursal letter to be issued by RACPC to confirm & then only getting transaction rights. You should ask them in reverse, show me the circular which says that branch staff needs such lstter from RACPC.

      thanks

      Ashal

  165. Dear Hemant, that you w’d have to calculate on your own in a simple exl. sheet. Please prepare your own Masx Gain sheet for the job. Please do not rely upon any online Max Gain sheet as all are flawed for the same reason that reduction in loan term is considered there against your parked amount which is not the case in actual.

    thanks

    Ashal

  166. Hemant says:

    Thanks Ashal – Pls could you give me an example and overall idea how many years (Long Term) of FD return will be more than Max Gain advantage.

    Thanks so much in advance

  167. Dear Hemant, please check why the DP is not reducing? It should reduce. Regarding the max Gain v/s Fd, the Fd ‘ll score over long term due to fwd compounding where as home loan is reverse or negative compounding.

    Thanks

    Ashal

  168. Dear Vimal, please contact bank branch immediately. it seems originally a moratorium period was given which has not been updated in the calculation & thus all the EMIs are getting accumulated as available balance.

    Thanks

    Ashal

    1. Hemant says:

      Dear Ashal Sir –

      Thanks so much for your help and response on this forum; really great. I have two questions.

      1. Even Drawing power remains constant in my SBI Max Gain loan case. I thought it is intentional from bank as I can withdraw this money whenever I need and utilize these funds somewhere else. (Personal loan interest rate is approx 12.5%) so I thought this is as per bank policy and I didn’t highlight this issue with bank.
      Is there any harm if drawing power is not reducing on monthly basis?

      2. SBI Branch manager told me that it is good to park surplus funds in FD rather than in MaxGain. Reason being; interest is calculated on daily reducing principal and effective interest rate is approx 6-7% for home loan while FD provides approx 8.5%. My home loan interest rate is 9.95%. He even showed me some calculations which I didn’t understand much so what should I do. Should I withdraw funds from Max Gain and go for FD/RD?

      Pls advice. Your help is much appreciated

      Regards,
      Hemant

  169. Dear Vimal, what;s the status of your loan? Fully disbursed or part disbbursed. In case of part disbursed loan, the reduction in DP ‘MAY’ not happen & you w’d have to request SBI for the same.

    thanks

    Ashal

    1. vimal says:

      Dear Ashal,

      It is fully disbursed in the month of Jan. Book Balance amount is decreasing whereas the DP remains the same as my total loan amount.

      Thanks and Regards,
      Vimal

  170. Dear Senthil, here are the answers.

    1. Actual amount your property registrar office ‘ll tell.

    2. Yes it’s mandatory.

    3. The property insurance is mandatory, possible prem. for 20Y ‘ll be around 20-25K.

    thanks

    Ashal

    1. vimal says:

      Hi,

      I have a SBI Max gain HL and I have started paying regular EMI for past 6 months. But I dont see my Limit and Drawing Power going down after 6 EMI payment.Based on the discussion in the forum, I understood that it has to go down based on my principal prepayment.

      When I checked with the bank, I was informed to concentrate only on Book Balance alone which will give my loan outstanding. How will I come to know about my Principal repayment? I checked with forum replies but everywhere it is mentioned that the drawing will reduce.

      Please correct me the above statement is true.

  171. Dear Hemank, please contact your loan serving branch to get ‘view only’ netbanking rights.

    thanks

    Ashal

  172. Hemank Chheda says:

    Hi Ashal,

    My First EMI got deducted few days back and its been more than a month since my agreement was done with bank for Home Loan, yet i have not received any Home Loan kit from SBI with my online User ID’s and Password that enables me to see the home loan account online.

    My property is under construction and only partial amount has been disbursed, Is it so that i will receive the user ID to log in, only when my home loan amount is completely disbursed ???

    I understand that the Transaction rights will only be enabled, when my entire amount is disbursed but i am only talking about logging online and viewing my home loan account.

    Thanks,
    Hemank

    1. senthil kumar says:

      Hi guys,

      Few queries I have and I listed them below.

      I have recently taken a loan from SBI and its a max gain. First cheque payment they have released during property registration.

      Now house is registered in my name and SBI has asked me to do the following things for releasing the second cheque to my builder.

      1.create a mortgage (MOD)
      2. one year EC in SBI name

      My questions:

      1. For doing the above mentioned two things one has to spend around 15k. And during the closure of loan, again we need to do the reversal process of the above two?? again 15k we need to spend at the registrar off at the time of loan closure??

      2. Both these are mandatory.?

      3. Is the property insurance which they say will be added to the loan is mandatory? IF yes how much would it be.. approx for a property regtd for 36L

      Thanks,
      Senthil

  173. Dear Hiren, let me try to answer your queries.

    Q1: Should I continue doing this till my book balance become 0 and then write an application to SBI to close the Home loan?
    Parking surplus in Max Gain regularly OK but when the book balance become zero, why do you want to close the loan as the interest outgo ‘ll be zero now?

    Q2: Should I do this more regularly as in every year convert surplus amount into prepayment?
    Please park regularly but do not think of prepaying or closing the loan.

    Q3: Do we earn any interest on surplus amount in maxgain account like we get in Savings account?
    No, you do not earn any interest on your surplus amount in Max Gain account.

    Thanks

    Ashal

  174. Hiren Naik says:

    Hi Ashal,

    I am using SBI Maxgain HL scheme since June 2009, however I have not utilized its benefits to the fullest. I took HL of 20L for 20 years, which was giving me EMI of 18000 per month. I have HSBC salary account which I use to pay my EMI every month. I am not parking all my other funds into my OD account, which I have learned I should do to lower the interest. But what I have been doing so far is apart from EMI every month I was parking 1L of my savings into OD account every 3 months which has brought my book balance near to half, my book balance is now -10,54,981.00/-. I am confident that surplus amount that I am parking in OD account is never going to use for other purpose.

    Q1: Should I continue doing this till my book balance become 0 and then write an application to SBI to close the Home loan?

    Q2: Should I do this more regularly as in every year convert surplus amount into prepayment?

    Q3: Do we earn any interest on surplus amount in maxgain account like we get in Savings account?

    Kindly let me know you thoughts,

    Regards,
    Hiren

  175. kathir123 says:

    Hi Ashal,

    First of all, Thank you very much for doing a fabulous job in this forum.

    I have taken HL insurance cover for Rs.83,000(as a part of my HL) along with my HL of 37 lacs. My doubt is why drawing amount and outstanding amount shows as 0 in the below descriptions. FYI, Full disbursement is not yet done. 33 lacs was disbursed in single shot in April 2013 and I have started paying my Full EMI from May2013.

    Description MAXGAIN SURAKSHA
    Limit 83,000.00
    Drawing Power 0.00
    Outstanding Amount 0.00
    Rate of Interest 10.1
    Currency INR
    C.Y.YTD Interest 0.0
    P.Y.YTD Interest 0.0

    Thanks,
    Deepak

  176. PRADIP says:

    Thanks Ashal for kind reply.

  177. Dear Pradip, Yes. The onus lies on you to make sure that money is available in OD account on the date of cheque presentation.

    Thanks

    Ashal

  178. PRADIP says:

    Dear Ashal,
    can I give post dated checks of OD account for car loan?

  179. Dear Kartik, thanks to you for asking so many queries for the benefit of others. You never know, how you are helping indirectly by asking so many questions which may help others while searching for their own queries.

    Thanks

    Ashal

  180. Dear Kartik, ratio is to be predefined between both of you & it can not change for your life. That’s why it’s an important thing to consider tax benefit.

    thanks

    Ashal

  181. Dear Kartik, if the house in question is co-owned, the interest related benefit ‘ll be available to both owners. So in your case, it ‘ll be 30% tax benefit for your part & 10% tax benefit for your wife. that’s how the combine dtax benefit calculation ‘ll change.

    Thanks

    Ashal

    1. Kartik Sudarshana says:

      Thanks Ashal, I took this point with my SBI representative. I asked them if they will give me a split of how much me and my wife can claim in our respective tax calculations. For this they responded saying SBI will only give two numbers ( Total principle paid and Total interest paid ) for the financial year. They do not care how we split this for our tax calculations.
      I think legally, total amount should remain the same and ratio is left to us. ( At-least as per my knowledge).

      So we can split it (total interest paid) 50-50, 80-20 or even 100-0. So If I claim all the Interest component, I think it will be treated as legal by tax auditors right? Or is there a minimum ratio to be maintained between the co-owners?

    2. Kartik Sudarshana says:

      Thanks Ashal,

      Looks like an agreement has to be made between co-owners for the ownership ratio of the property. This ownership ratio will decide income tax claim ratio as well. As you suggested, this cannot change..

      Even if I do the above in the ratio of say 80-20, there may be some benefits in the first few years but later on once both our salary brackets are at 30%, it won’t be of much help.
      So I am not sure if all this circus is worth the benefit for few years.. I think its probably just simple to put money in Maxgain :)..

      Thanks for all your patient responses..

  182. Dear Kartik, the tax benefit calculation on interest ‘ll change on the basis of ownership.

    Thanks

    Ashal

    1. Kartik Sudarshana says:

      Thanks Ashal. Could you please provide more detail on this.

      1) Do you mean the above calculation is valid for one type of ownership( single or joint) ? Which one?
      2) How would it affect for the other type? Would it still be less beneficial than the above calculation but still better than keeping in MaxGain?

      I have some surplus amount now with me and would like to choose a better option. Kindly help me.

  183. Kartik Sudarshana says:

    Hi Ashal,

    The registration is due in the next 3 weeks. But we have decided to jointly own it. Do you see any adv/disadv in owning it single/joint both in the above case and also in general?

  184. Dear Kartik, the property in question is jointly owned or single under your name?

    Thanks

    Ashal

  185. Kartik Sudarshana says:

    Dear Ashal,

    I am having this weird theory which makes me feel that having an FD/MOD deposit of say 1Lakh is better than parking the money in MGain account . I am sure I have missed out something. But I am not able to find it out. Kindly let me know where I am wrong in the below justification.

    Background:
    My salary is in 30% tax bracket
    My Wife’s salary is in 10% tax bracket.
    Loan taken is Joint Loan form SBI – Maxgain ( 10.1 % interest).
    Property will be rented out and hence no limit on “Interest paid on housing loan” for tax computation. ( I know I have to show rental income as well 🙂 )

    Lets say I have 1Lakh surplus amount. If I put this in my wife’s SBI MOD account which has 9% annual interest ( right now). She will get 9000 at the end of the year. She will declare this as income but since she is in 10% tax bracket, she will lose only 900. Meaning we earn 8100 Rs by end of the year. Now, because I did not park this money in Maxgain, I obviously lost 10.1% interest for this 1L which is 10,100/-. But, I will show this amount in my tax computation for “Interest towards housing loan” wherein I will save 30% tax in my salary meaning effectively I have only paid 10,100 – 3030 = 7070/-.
    So , in effect, I actually earn 8100 and spent 7070 ie. 8100 – 7070 = 1030/-

    Based on above calculation, I am actually saving 1030/- each year for every Lakh I don’t park in Maxgain but open MOD in SBI in my wife’s account.

    I am sure there is something wrong.. Kindly point it out and correct it!!

    1. sunnyvijay says:

      Hi Kartik,

      Very interesting question which I used to ponder myself aswell. Anywayz I doubt`t whether it works that way. Can wait for other experts to comment on this.

      I think by keeping 1L in your MOD might earn you some money as you have quoted however by having the same money in your MaxGain account would save you a lot on the “total interest” that you need to pay on your home loan. Check that for yourself with any amortization tool.

  186. Dear pan, as the property is already booked by you & part disbursal of loan is also over, the property can be covered by you under an insurance policy. Regarding the policy document, please contact your loan serving branch or RACPC.

    Thanks

    Ashal

  187. pan says:

    Hi,
    I have one query. Recently i saw a debit from my Loan account as follows

    17-Apr-2013 DEBIT PROPERTY INSC BY SBI GEN INSURANCE CO LTD 38,760.00

    So this is for Property Insurance.
    The apartment is still under construction and hence registration in my name is not done yet.

    However, in some previous post, i saw reply that the property insurance is done only after registration when the property is in our name. I asked the SBI contact person of the branch about it, and he said, it happen usually earlier itself, so that any mis happening even during construction can be covered.

    a) Please let me know is it right?
    b) If an insurance(property) is done, will i be receiving any Insurance document ?

    Regards
    Pan

  188. Dear Hemank, there is no exl. sheet prepared by me for Max Gain. The situation is flaoting every month (the amount parked by you) so a fixed sheet is not possible.

    Thanks

    Ashal

  189. Dear Chandan, the interest ‘ll be chaged only on the disbursed amount i.e 3L Rs.

    Thanks

    Ashal

  190. Hemank Chheda says:

    Dear Ashal,

    Hope you are doing fine.

    Could you please send an excel sheet for max gain account in my email address hemank.c@gmail.com ?

    This would be of great help to me.

    Many Thanks in Advance,
    Hemank

  191. chandan blr says:

    I have got the first disbursement 20 days back (3 Lakhs) and have option for full EMI from next month.
    The question I have is , will I be paying interest on 20 lakhs (my total loan amount ) from now itself , or interest is calculated for only the disbursed amount ?

  192. Dear Raghav, you can transfer your salary account from HDFC to SBI. Regarding the personal loan EMi payment, HDFC should not create an issue. Still to be on safer side, please ask @ HDFC for the same thing. I do not think any charges should be there for this ECS mandate from SBI account.

    Thanks

    Ashal

  193. Raghav V says:

    Thanks Ashal for your crisp answers.

    I am also inclined towards opening a sal.account with SBI and link this to MG account.

    But currently I have a personal loan running on my hdfc sal.account for which so far I have paid just one emi last month.Will hdfc accept if I inform them that I am planning to close this sal.account and for this personal loan intrest of 5k each month they shall take ecs from my about to be SBI sal account.

    Will they allow me to do this in first place and will they levy me any charges for this? Kindly help me on this…

  194. Dear Raghav, let me try to answer your queries.

    A. Unless your ROI goes very high, the EMI ‘ll remain same.

    B. Your planning is ok with HDFC salary account. Please do not the only drawback in this case is the interbank transfer charges levied on each part of transaction from HDFC to SBI & reverse. There is more to it, some times, there may be a failure of payment of EMI amount from SBI to HDFC salary account.

    So in my personal opinion, please open a new SB account with SBI & ask RACPC to use this new account as your EMI debiting account.

    thanks

    Ashal

  195. Raghav V says:

    Hi Ashal and Other Experts,

    I have taken a sbi maxgain home loan for 22 lakhs and my current EMI is 21,150 per month for 240 months tenure.

    A couple of clarifications after reading the above threads:

    a) Assuming at any point of time if I withdraw all my Available balance or surplus from my MG account then my EMI will fall back worst case to 21, 150 or is there any scenario where there is a possible chance in my tenure(20 years) for this EMI to exceed 21,150 or I shall strongly believe that at any point of time only 21,150 will be my max emi at any point in time?

    b) Currently I am planning to park all my salary into my maxgain OD account..wanted to know instead of opening a new SBI SB A/C..shall I use my exsisting hdfc sal account and transfer my salary from hdfc to SBI maxgain account directly at the start of the month and then around 9th of every month I shall transfer around 22k back from this SBI OD to HDFC for emi deduction as I have ECS on hdfc sal.Account..is this feasible and let me know the pros and cons of this process without a SBI SB account linked with MG?

    Thanks…

  196. Dear Sunnyvijay, I’m trying to answer your queries.

    1) Can we send/transfer money directly from some other bank to SBI Maxgain OD account ?
    Yes is the answer. You can do so from any of your netbanking enabled account.

    2) If Yes, should we add this OD account details as Savings Account or Current Account ?
    As current Account.

    3) Is it possible to use sbi netbanking and use OD account for any payments over net ?
    Yes, It’s possible to use your existing SBI netbanking to payments over net from Max Gain account.

    4) Any way to see the Interest statement of SBI maxgain homeloan from sbi website ?
    NO. To see the interest you w’d have to manually note down the interest for each month debited or download the full account statement for the petriod you want to calculate your interest.

    Thanks

    Ashal

  197. sunnyvijay says:

    Hi Ashal,

    1) Can we send/transfer money directly from some other bank to SBI Maxgain OD account ?
    2) If Yes, should we add this OD account details as Savings Account or Current Account ?
    3) Is it possible to use sbi netbanking and use OD account for any payments over net ?
    4) Any way to see the Interest statement of SBI maxgain homeloan from sbi website ?

    Thanks

  198. Dear Sudarshan, the property insurance ‘ll be done once the property is registered under your name. After the mortgage deed is over, SBI ‘ll release the remaining amount.

    Thanks

    Ashal

  199. Sudarshan B says:

    Hi Ashal,

    I am getting my property registered in few weeks from now what are the next steps to get the remaining amount to be released and when should the property insurance be done (before or after registration?). Appreciate your help.

  200. Pingback: SBI Max Gain: Some FAQs | Ideas for Wealth
  201. Dear Manubhai, the branch manager is simply ignorant. From accounting of the maxgain. there is no interest earning to you. There is merely less interest outgo. you are not getting any credit of interest. what is happening here. Please understand it from your same example.

    1.4L Rs. as interest was to be charged if no surplus is there.
    1.2L Rs. are charged as actual interest.
    Now this remaining 20K is not the interest earned. it’s merely the surplus amount parked by you in your Max Gain (the over draft account).

    Just to understand it – forget max gain, & ask the same branch manager, if you are holding a normal OD account against FD in the same bank. what ‘ll be the situation for same thing?
    I ‘ll love to hear his answer. 🙂

    Personally I feel SBI should conduct a refresher course for all it’s staff on Max Gain.

    thanks

    Ashal

  202. Manubhai P. says:

    Dear Forum Experts,

    Especially Ashal and Others who are well aware of ins and outs of MAXGAIN, the situation is as follows:

    If one is parking some surplus amount in MG OD account and thereby gets deemed interest at the same rate as that of Home Loan and so, on one side interest is earned and on the other side same amount of interest earned on PARKED amount is re-deemed back to payout the supposed to incur interest of the otherwise outstanding Loan principal amount, thereby reducing net outgo of that much Interest Amount as per my understanding.

    Say 1.2L annual interest outgo is there for one individual who also has saved 20K interest by parking appropriate amount of surplus and thereby earning 20K deemed interest on the parked amount. Effectively the interest burden which was to be 1.4L has got reduced by 20K and reached actual amount of 1.2L in the give financial year.

    Question:

    while Tax exemption is available for the 1.2L interest actually paid to the bank under loss of income, is the 20K earned deemed interest on surplus OD balance neutralized by the otherwise levible Loan Interest taxable, in par or full? Which would have definitely have happenned if it was from some other instrument. So again, any part or full of this earned/saved interest taxable for that particular year?

    Answer to this is very important to most of the forum visitors as one of the branch managers informally and un confirmedly told that any interest earned/saved through MG OD account balance is to be taxed if it exceeds 10K in a year.

  203. Dear Santosh, glad to know that now you are able to transact in full for your MG account.

    Thanks

    Ashal

  204. Dear Agarg, is you are not withdrawing your 8L Rs., it ‘ll help you to bring down your interest outgo. Please do remember, your as on date drawing power is your actual loan balance & you w’d have to repay it over the period though your regular EMI. By parking 8L Rs. you can not assume that you have repaid your principal amount. it’s floating money & meant for interest saving not for loan repayment. You can withdraw it anytime in case of need.

    thanks

    Ashal

  205. agarg says:

    Dear Ashal, regarding my 8 Jan and 9 Jan 2013 query, if I don’t reduce my loan amount (30 L) and never withdraw 8 L. I can understand that I will not be paying interest on 8L, but will I end up re-paying principal 8L, though I have never withdrawn it

  206. chandan blr says:

    Thank you very much for clarifying.
    Regards

  207. Dear Chandan, you are misunderstanding the whole thing. Regarding your loan, SBI ‘ll disburse the amount in tranches as per the %age completion of your construction.

    The withdraw we are referring here post 100% disbursement is meant for the amount parked by you as surplus in to Max Gain account to save on interest outgo.

    Thanks

    Ashal

  208. chandan blr says:

    Hi All,
    I have applied for SBI Maxgain Home loan ( construction of house)
    I read that we will be able to withdraw money from OD account only when 100% disbursement is done , is this right for my case also ?

    I thought bank will disburse money in stages seeing the progress of construction, with each disbursement – I thought willl withdraw and use the money for construction
    Please give your inputs.

    Regards

  209. Dear Praveen, for short fall of this 2L Rs. amount in loan disbursal, please contact SBI & ask, when & where it ‘ll be released. Regarding welcome kit, NO, you ‘ll not receive any. For the list of documents submitted by you, you can write your RACPC or the loan servicing branch & ask the List of Documents (called LOD in banking language) for your record.

    Thanks

    Ashal

  210. Praveen S says:

    Dear Ashal,

    Thanks for sharing your knowledge and answering the numerous questions.
    My property is valued at Rs1.16 Cr.
    I have 2 questions:

    1. I have taken SBI Max Gain home loan on Rs 80Lakh (for 20 yrs at 10.1% ROI).
    I made a disbursal of Rs 23.12 lakh as down payment before applying for loan.
    My margin percentage as mentioned in arrangement letter is 32%.
    Below is schedule of payment (CLP):

    1st Installment: 23.12 Lakh (I paid full amount) – completed
    2nd installment: 67.88 Lakh (SBI paid: 61.84 and I pay: 6.05) – completed
    3rd Installment: 16.97 Lakh (SBI should pay 11.54 and I should pay 5.43)
    4th Installment: 8.01 Lakh (SBI should pay 5.44 and I should pay 2.56)

    Above calculation is according to 68% share of Bank and 32% my share in disbursement.
    Going by this, I see that loan will be not be completely utilized
    Bank will pay 78.82 Lakh out of 80Lakh.
    Would this be a problem if I do not utilize complete sanctioned loan amount?

    2. While taking loan, Bank takes the original documents like Sale Agreement and Construction Agreement, original receipts of money I paid to builder
    Would Bank send me a document or welcome kit (to my registered address)
    stating list of documents they have taken into their custody?
    What all welcome kit contains?

    Thanks
    Praveen

  211. Dear Santosh, the car loan OD facility is called SBI CAr Advantage loan. To be able to transfer back the 500 Rs. test amount, please contact the loan disbursal branch to activate your transactions rights.

    No transaction rights are not activated automatically.

    Thanks

    Ashal

    1. Santosh Mahajan says:

      Thanks Ashal!
      My transaction rights are enabled now and I could transfer back to my saving account from OD.

  212. Santosh Mahajan says:

    Hi,

    I would like to thank this forum for answering a lot of my queries.

    Just wanted to share that overdraft facility is available with SBI for car loan as well. I took it last week.

    My saving account is with different branch than my car loan account branch but mapped to same online account.

    I transferred 500 in my OD account. But I am unable to transfer it back to my saving account. Disbursement is done in full.

    doesn’t SBI gives facility to transfer from OD to saving online by default?

    Thanks and best regards,
    Santosh.

  213. Dear Parag, yes the saving ‘ll be 1.25L Rs. Please go ahead for rate conversion.

    Thanks

    Ashal

  214. Parag Kumar says:

    Hi Ashal,

    My current outstanding loan amount is 35.5 lakhs(Original loan amount – 37.17 lakhs) & loan duration remaining is 14 years(Original duration 15 years).

    My current ROI is 10.45%

    To convert this to current interest rate 10.1%, as you said i will have to pay 0.56% i.e approx. 20k to SBI.

    According to my calculation, i save about 1.25 lakhs on interest if i get this loan rate converted.

    Is my calculation correct? If no, can you correct me.
    Also do you think that getting the loan rate will be profitable considering my loan amount is very high.

    Thanks in advance.
    Parag Kumar

  215. Dear Mohit, please contact RACPC to get the copy of your loan agreement. it’s the duty of the staf of RACPC to provide a copy to you.

    Thanks

    Ashal

  216. Mohit Katiyar says:

    Thanks for your responses.
    As for your of paying to builder is, I will pay from my own saving which I have collected over last one year.
    I have actually never looked at the loan agreement document. Me and my wife signed it at RACPC office but never received the copy. How can I get it now?

    Thanks
    Mohit

  217. Dear Mohit, I’m trying to answer your queries.

    1. For SBI Max gain I heard the pre-emi period is 1 and half year or last disbursement which ever is earlier? If yes then my next question is irrelevant.
    What you are calling as Pre-EMI period, it’s called Moratorium & depending upon the individual loan disbursal, it may be anywhere from 6 months to 24 months. To know your own, please check your loan agreement.

    2. I have opted for full 80% of the limit loan and 1 year of pre-emi is completed. Now my last disbursement is not being asked by the builder so can I approach the bank and reduce the loan and still have the max gain facility?
    How’ll you pay to your builder from your own pocket as & when your builder demands it?

    3. My RACPC is office is in my home town. What all formalities have to be completed when actual EMI starts after pre-emi? Will I need to travel to my home town?
    Please read your loan agreement for completion of Pre EMI, as & when it happens, the EMI ‘ll start automatically from the SB account under your ECS/SI mandate, given at the time of loan agreement was done by you with bank.

    4. Will I be able to withdraw any extra money(besides pre-emi) parked in MG account while pre-emi period after the actual EMI get started?
    To withdraw your own money from MG, make sure full disbursal has been done & you do have transaction rights for your MG account through netbanking of SBI.

    5. I got the loan issued at 10.5% fully floating, now the new loan issue rate is much lower. Is there any way I could ask bank to convert it to lower rate by making any one time fee payment?
    Yes, one time Rate reduction is possible by paying a conversion fee of 0.56% of your outstanding loan amount. For this please contact your loan serving branch.

    Thanks

    Ashal

  218. Mohit Katiyar says:

    Hi Ashal,

    Your knowledge on the SBI max gain is commendable. I have also taken a SBI max gain loan and I need help on certain things
    1. For SBI Max gain I heard the pre-emi period is 1 and half year or last disbursement which ever is earlier? If yes then my next question is irrelevant.
    2. I have opted for full 80% of the limit loan and 1 year of pre-emi is completed. Now my last disbursement is not being asked by the builder so can I approach the bank and reduce the loan and still have the max gain facility?
    3. My RACPC is office is in my home town. What all formalities have to be completed when actual EMI starts after pre-emi? Will I need to travel to my home town?
    4. Will I be able to withdraw any extra money(besides pre-emi) parked in MG account while pre-emi period after the actual EMI get started?
    5. I got the loan issued at 10.5% fully floating, now the new loan issue rate is much lower. Is there any way I could ask bank to convert it to lower rate by making any one time fee payment?

    Thanks in advance

  219. Dear Hemank, if by linking you mean assignment, I already answered that this can be done by SBI Life on your written request. Please do understand, policy is linked or not, in case of claim, SBI bank staff is not going to help in any manner to your family. Your family w’d have to run for claim on it’s own. As simple as that.

    thanks

    Ashal

  220. Hemank Chheda says:

    Hi Ashal,

    Suppose if i opt for SBI E-sheild policy, will it be linked to my home loan account ?

    Thanks,
    Hemank

  221. Dear Hemank, your answer is totally wrong. For each policy, be it rinraksha, smart shield or e-shield, the claim is to be filed by the family members & interestingly there is no guarantee that claim ‘ll be passed in any of these policies. So claim failure risk is same in all the 3 types of policies.

    Now do tell me, which policy is the most beneficial to you.

    From the forum itself, I do have a case history with me, where a policy was never issued to the borrower & due to unfortunately death of the borrower, when the family tried to file for claim, it came to notice that policy was never issued. Now the family is running from here & there as well filed a court case for the pain faced by them for failure of bank staff.

    Thanks

    Ashal

  222. Hemank Chheda says:

    Hi Ashal,

    Got your question Ashal. Its the bank who is going to file for the claim. But can smart shield or e-shield policies be linked to the home loan account ?

  223. Dear Hemank, do you mean to say, if your death happens under Rinraksha policy, the claim ‘ll be passed within few hrs? if my understanding is correct, let me ask a question to you.

    In case of rinraksha or smart shield or e-shield, who ‘ll file claim for each policy?

    Before answering, please understand properly, what I’m asking for?

    thanks

    Ashal

  224. Hemank Chheda says:

    Hi Ashal,

    Thanks for your reply. But the only thing that worries me is the claim settlement in case of unfortunate event in esheild policy. I believe, Rinnraksha is free of these terms and conditions and the claim would be settled immediately. However, eshield being an pure online term cover worries me about claim settlement. What do you think about this ?

    Thanks,
    Hemank

  225. Dear Hemank, at the time of answering those queries, the E-Shield was not available. Yes now one should opt E-Shield over smart shield. Regarding linking, I assume you are referring to assign these policies with your home loan, yes it can be done by requesting the same to SBI Life, the insurer, not by the bank.

    Thanks

    Ashal

  226. Hemank Chheda says:

    Hi Ashal,

    Regarding life insurance, SBI is offering their life insurance product Rinnraksha with Home loan. As mentioned by you in the above posts, SBI Smart sheild is the one you recommnended. However there is also SBI eshield policy offered by SBI. Which would be the best policy to opt for. Also, will they link these policies to the home loan account ?

    Thanks,
    Hemank

  227. Dear Kiran, the situation you are referring to is applicable in normal home loan where your partpayment money is adjusted immediately & permanently towards the loan & thus the interest outgo in your loan get reduced & principal component increases.

    In case of MG, the parked surplus is treated as payment for calculation of interest & no actual prepayment is happening, hence the differential interest part of your EMI in MG ‘ll be available as surplus.

    Thanks

    Ashal

  228. Dear Manubhai, remember RTI is key in your case.

    thanks

    Ashal

  229. Dear Manubhai p, Please file an RTI application & demand the photocopy of the application form where you celarly marked the thing ‘Max Gain’ as your choice of home loan. Once the photo copy of your application is with you, please contact your branch manager as the first step in the ladder to resolve the issue. if you get success, OK. if no success, no problem, contact the AGM in your local RACPC & when you ‘ll be able to prove that it was fault of SBI & not yours; the loan account ‘ll be converted to Max Gain for sure. Your case is not the ordinary conversion where you are already having routine Term loan & wants to swtich over to Max Gain. in your case, you demanded max Gain but given term loan & why you should suffer for the fault of SBI?

    It’s not going to happen immediately & it may take some 10-15 days or even more & your some trips to serving branch as well as RACPC but be assured, the hard work ‘ll be fruitful to you.

    My advance wishes to you.

    thanks

    Ashal

  230. Manubhai P. says:

    Dear Forum Experts, Specially Ashal Juahari,

    My question is regarding MAXGAIN pertaining to SBI Home Loans.

    NOTE: I have repeatedly gone through most of the threads on this as well as other web-pages to make sure I take least time and call in minimum efforts from the helpers here.

    Background:
    Me being fan of this concept, had applied for MAXGAIN type home loan in prescribed form to SBI RACPC clearly ticking MAXGAIN option in the Detail-C page top. From beginning till end got all formalities completed and now I have even submitted the possession letter etc , after mortgaging the home to SBI after executing Sales Deed From the Developer. I was able to see the Loan Account of Home Loan as well as Personal Insurance Loan linked to same CIF of Internet Banking Login wherein I earlier used to see my savings account only. However, The Loan accounts were appearing in the VIEW ONLY (not Transaction enabled) category of the internet banking page. I thought that I should apply and get transaction rights for this loan account and so approached SBI, wherein I was informed that this Loan account is not of MAXGAIN type/category and so I cant have transactions nor can I have Chequebook/ATM Card etc even if I have completed all the formalities including Full and Final Disbursement, Salesdeed Submission, Mortgaging, Possession Letter Submission, etc, completely. So I have understood that while opening new loan account by the concerned in the SBI, My request for MAXGAIN type account was apparently missed and so ordinary home loan account was opened which is described as SBI SURAKSHIT HOME LOAN in my Net-banking webpage. I have also consulted a friend of mine who uses this type of OD loan account under MAXGAIN, made him see my netbanking webpage and he confirmed that mine is not a MAXGAIN OD Transactions account for sure.

    As mentioned by Mr. Pawan somewhere above, when he approached his RACPC for such a conversion, they denied, however it is said earlier here that such conversion is possible, only once, and cant be reversed later. Request some more light on this matter.

    Question:
    (1) Is it possible to convert the same account now tagged as SURAKSHIT HOME LOAN into MAXGAIN type?
    (2) Whats the easiest way out to get me a MAXGAIN account without much hassle/financial implication?
    (3) If at all some authority(AGM / GM etc) exists in SBI who might have capacity/authority to close my this account and open a new account of maxgain type without any financial implication on either side, details of such office/authority.
    (4) If its only a complaint and redressal way open to me, whom and how should I approach?
    (5) Request to tell details so that I can visit my RACPC with proper preparedness and make my work happen, for sure I am not expecting a smooth sailing in this situation, and most likely people there will not entertain me at the first place so easily, nor might they co-operate, I doubt they Might even tamper with my form to dilute the matter, so need a better detailed help.

    Counting on you Dear ASHAL and others. I have read the posts and am very hopeful of getting guidance.

  231. Dear ramesh Babu, I’m trying to answer your queries.

    *If we park addtional/extra money parked in Mas gain account, EMI will be same and of course Loan tenure will get reduced… Am I right?
    No, the parking of surplus amount ‘ll only reduce the interest outgo. Loan term ‘ll remain same.

    *Every year I will start RD for 12 months to pay school fees for my daughter for the next academic year. . Is it worth to park that RD amount ( roughly 4500per month) every month in Maxgain acoount and to withdraw in 12th month ( fees required)… Is it advisable to do such transaction max gain .. Is there any limit to park/withdraw no. of transaction in max gain account? generally banks are giving 8-9% RD interest and do I save that equal amount in my load account interest also.
    Yes, it’s a good idea. The saving in home loan interest outgo ‘ll be higher than post tax interest earning in RD.

    *In your previous answer , I found that you are recommending SBI life credit card … I don’t have credit card as of now and let me know any specific reason for credit card. I feel there will be annual charges for credit card. Am I right?
    I’m asking to direct credit card payment from Max Gain for the people who are having existing CCs from other banks. For people who do not have any CC, having one from SBI is a good idea.

    *Can we book the tickets or for shopping from Max gain account thru internet banking . Is it possible.
    Yes, you can do all online shopping stuff.

    *Can you please share a SBI max gain calculator if any.
    No, I do not have any. Please prepare your own.

    Thanks

    Ashal

    1. Kiran R says:

      HI ASHUL,
      when we park surplus amount it‘ll only reduce the interest outgo. Loan term ‘ll remain same. then my understanding is if we pay more principle and less interest the loan tenure should automatically come down right ? because the emi amount is a fixed one and the principle paid more whenever there is excess amount parked over MG. ?
      kindly educate on this..

  232. ramesh babu says:

    Hi Ashal
    Thanks for detailed answer about SBI max gain questions…

    I had a few questions

    *If we park addtional/extra money parked in Mas gain account, EMI will be same and of course Loan tenure will get reduced… Am I right?

    *Every year I will start RD for 12 months to pay school fees for my daughter for the next academic year. . Is it worth to park that RD amount ( roughly 4500per month) every month in Maxgain acoount and to withdraw in 12th month ( fees required)… Is it advisable to do such transaction max gain .. Is there any limit to park/withdraw no. of transaction in max gain account? generally banks are giving 8-9% RD interest and do I save that equal amount in my load account interest also.

    *In your previous answer , I found that you are recommending SBI life credit card … I don’t have credit card as of now and let me know any specific reason for credit card. I feel there will be annual charges for credit card. Am I right?

    *Can we book the tickets or for shopping from Max gain account thru internet banking . Is it possible.

    *Can you please share a SBI max gain calculator if any.

    Thanks in advance.
    -babu

  233. Dear Kiran R, I’m trying to answer your queries.

    1. Yes you can now park your surplus amount into your MG acct. But make sure you do have netbanking rights active in your MG acct. if not done already, please aply for activation of netbanking rights for your MG acct.

    2. Please read reply 1 above, it may be the reason.

    Regarding your Accounts –

    Yes you may start transferring funds from other sources into this OD account.

    The acct. no. 3 is your active insurance prem. money acct. where as the acct. 4 is a wrong one opened by mistake.

    Thanks

    Ashal

  234. Dear Madhan, yes you ‘ll get the benefit of reduced ROI in the month of March’s calculation.

    Thanks

    Ashal

    1. Kiran R says:

      Dear Ashul,
      I am very new this forum… i am from Bangalore. i have taken SBI MG HL in Bangalore – koramangala branch.
      my prop reg was done during march 2013 and the loan was taken during nov 2011 since then i have been paying the full emi.
      1) now my question is can i start using my OD account for parking the surplus amount?
      2) i trying submitting for the cheque book request online for my OD, but i see only option for my SB.

      also need help onother below quires
      i have total 4 accounts listed under my login.

      Transaction Accounts :
      1- Saving account – my area branch – ROI – 4%
      2- OD Account – with PBB Koramangala branch – ROI 10.2 %
      Should is start transferring fund from other sources to OD account ?

      Loan Accounts:
      3- Loan Account (Max Gain Suraksha) with PBB Koramangala – this looks to be the specific for the HL insurance account
      ROI 10.2 % –
      In this apart from the anual insurance prem for first 4 years roughly 8000 there is also interest Debit every month with marration ” Part Period Int” is that usual or some thing wrong going with my account ?

      4- Loan account 2 (Max Gain Suraksha) with RACPC Bnagalore – this also looks to be the specific for the HL insurance account but there is no transaction since beginning it shows – 0
      ROI 10.7 % (IS THIS THE DUPLICATE ACCOUNT THAT IS LYING DUMMY) ?

  235. Madhan says:

    Thanks Ashal. You are doing a great job. Your calculation matches exactly with my account statement. Prior to Feb13 SBI were charging 10.25% and for Feb interest is calculated at 10.2%. I have paid 0.56% of Drawing power and changed my ROI to 9.95%. Hoping to get it reflected in this month end.

  236. Dear Madhan, please check your bank account or contact SBI for clarification. My calculation indicates that your ROI was 10.25% for the month of jan 2013 not 10.2%. this 10.2% ROI was implemented from Feb 2013 after the reduction in repo rate by RBI in the month of Jan 2013.

    The formula adopted by you is ok just a small correction, for 7th date EMI credit, the interest ‘ll be charged foer 6 days only. From there the interest ‘ll be charged on the remaining 25 days. Calculate this way for 10.25% ROI & update me with your findings.

    Regarding parking your FDs, yes if you are earning merely 8-9% in FDs & that too taxable & paying 10.2% in home loan, parking money into Max Gain ‘ll be a good idea Sir ji. 🙂 🙂

    thanks

    Ashal

  237. Madhan says:

    Dear Ashal,

    Transaction Date/description given above may appear little awkward. Let me put it here.

    Outstanding Balance as on 31st December Rs. 2798102
    7th Jan EMI of Rs.28954 credited to OD account.
    31st Jan Interest Debited in my OD account.

    regards
    Madhan

  238. Madhan says:

    Dear Ashal, Thanks much for your response. I am getting more and more clear on SBI Maxgain. Pls. help me understand the below transactions.
    ROI during this period: 10.20%

    Transaction Date Description Debit Credit Balance

    31-Dec-12 DEBIT INTEREST– 24,189.00 -2798102
    7-Jan-13 BULK POSTING-ECS 28,954.00 -2769148
    31-Jan-13 DEBIT INTEREST– 24,156.00 -2793304

    Jan 1 to Jan7 -> Interest for 7days is (2798102 * 10.20 * 7) / (100*365) = Rs.5473.54
    Jan 7 -> EMI credited to OD account. Balance adjusted to Rs.2769148.
    Jan 8 to Jan31 -> Interest for 24 days is (2769148 * 10.20 * 24) / (100*365) = Rs. 18572.25

    Total Interest = 18572.25 + 5473.54 = Rs. 24045.79
    But my OD account statement shows DEBIT interest on 31st Jan as 24156. There is difference of Rs.111 charged extra. Note, I am seeing such difference in amount for every month.
    Having those discrepancies I am much worried whether it is good to move some of my Fixed Deposit to OD account.

    Ashal, Pls. advice why the calculated interest varies. Am i calculating interest properly or i should approach SBI? Thanks.

  239. Dear Madhan, the bank is right in calculating your EMI on the original Loan amount. this is goint to help you to save more on interest outgo. Instead of having EMI for 28.36L Rs., it’s calculating for 29L Rs. & thus you are paying a slightly higher EMI. the higher EMI means the principal part of your EMI ‘ll be more. So loan ‘ll be repaid early & thus you ‘ll be able to save a bit of interest outgo here.

    thanks

    Ashal

  240. Madhan says:

    Thanks Ashal. Here we go on the EMI calculation.

    Total Loan Amount availed: 2900000
    Current Drawing power: 2836006
    Loan tenure remaining: 228 months
    ROI: 9.95%

    If EMI is calculated based on the Total Loan amount availed(i.e 2900000), it gives the Rs. 28362 which is more close to what bank officials said i.e Rs.28360.
    But as suggested above if the EMI is calculated based on Current Drawing Power(i.e 2836006), it gives me Rs. 27736.76

    Pls. let me know whether Total Loan amount availed or Current Drawing Power/Limit is used for calculating EMI and suggest whether i can approach bank for enquiring about this?
    Thanks.

  241. Dear Madhan, let me try to answer your queries.

    1. yes your understanding is correct.

    2. You are wriongly calculating EMIs on book balance. Please calculate your EMi on drawing power & you ‘l get the correct result. Drawing power or drwing limit is your actual outstanding loan amount where as bok balance is your as on date calculated loan balance after taking effect the parked surplus amount.

    thanks

    Ashal

  242. Madhan says:

    Dear Ashal,
    Total Loan amount – 29Lacs
    Loan Tenure: 240 Months
    ROI: 10.5%
    Calculated EMI: Rs.28954
    1st Disbursement – 12Lacs on 6th Jan 2012
    2nd Disbursement – Rs. 1389920 on 15th May2012
    Final Disbursement – Rs. 310080 on 18th Aug2012

    I started paying EMI from my 1st disbursement. The interest debited on end of Jan, Feb, Mar, Apr are Rs.7249, Rs,9880, Rs.10379, Rs.9911. The corresponding Principal amount are Rs.21705, Rs.19074, Rs.18575, Rs.19043 respectively.

    1) From the above threads i understood that the Principal paid contains the actual principal + Non-principal since i started paying full EMI from 1st disbursal itself and the non-principal amount should get reflected in ‘Available Balance’. Pls. let me know if my understanding is correct.

    2) I have changed the ROI from 10.2% to 9.95 last week. Pls. find the below loan account details as of today. The bank officials said the revised EMI is Rs.28360. But if i calculate using Current Book Balance, ROI, and remaining months (227), the EMI turns out to be ~Rs.27050. Pls. let me know how the EMI is calculated and why it is different from one i calculated?
    Book Balance -27,57,078.00
    Available Balance 78,928.00
    Limit 28,36,006.00
    Uncleared balance 0.00
    Drawing Power 28,36,006.00
    Currency INR
    Rate of Interest (% p.a.) 9.95%
    Lien Amount 0.00

    Thanks in Advance.

  243. Dear Vishnu, your understanding is correct. The interest ‘ll be charged only on the disbursed amount till date. So July -13 it ‘ll be 5L Rs. only on which you w’d pay interest for July & August months. In Sept -13 after next disbursal, you ‘ll pay interest on 10L Rs. till next disbursal.

    Thanks

    Ashal

  244. Vishnu Gupta says:

    Hi Ashal,

    Recently I booked under construction flat, which is having possession in Dec-14. I need to pay 20% in May-13 and remaining amount will be paid in 8 part (10% each) after completion of each slab (say first in July, next after 2 month and so on).

    20% I am paying by my own for remaining amount I’ll go for SBI maxgain home loan.

    Here my question is, if I go for loan of 40L, what would be the outstanding amount on me from today.
    Will it be 40L from today itself?
    or will it be as per the payment terms with builder?
    ex. today – 0
    July – 5L (1st slab)
    Sep – 10L (2nd slab)
    Nov – 15L (3rd slab)
    ………
    Sep-14 – 40L (8th or final slab).

    Your help would be appreciated.

    Thanks,
    Vishnu

  245. Dear Hemank, to prepay permanent you should contact SBI. But why do you want to prepay & lose the liquidity of your amount which is the main benefit of Max Gain?

    Thanks

    Ashal

  246. Hemank Chheda says:

    Hi Ashal,

    Just a small question about Home Saver Loan.

    Ex: Suppose i have taken an loan of 35 lacs, my monthly emi stands out to be approx 35,000 rs. I have been depositing 20,000 additional amount in my OD account per month. After 10 months, suppose i have collected 2 lacrupess by depositing 20,000 extra per month. Now i want to permanently pre pay this amount and want my loan o/s less by 2 lacs.

    I understand that 2 lacs that i have in my OD account is towards pre payment but that can also be withdrawn. How about permanent Pre pay of 2 lac, so that i cannot withdraw and the principal is actually reduced by 2 lacs.

    Regards,
    Hemank

  247. Dear Kamlesh, if the policy is not isssued, you may ask for change to the desired one. but in my personal opinion, the level term cover is better than decreasing cover.

    Thanks

    Ashal

  248. kamlesh patel says:

    Hi Ashal,

    My loan get senctioned & did all signatures with sbi. As I given request for smart shield – Decreasing Loan Assurance. But from sbi person given me sanctioned on Smart shield – Level term Assurance. The premium is higher then what i wanted to have.

    Can I change the policy type latter on?
    Thanks in advance..

  249. Dear Manoj, please check the below link –

    http://rbi.org.in/scripts/NotificationUser.aspx?Id=7258&Mode=0

    Show it to your Branch staff of IDBI & ask them in written that they ‘ll overrule the RBI guidelines & still impose preclosure charges on you.

    Regarding the saving, there is an immediate saving in terms of interest rate difference. Apart from the difference, there is another saving if you can manage to park your surplus funds into your MG account. So Transfer make sense.

    Thanks

    Ashal

  250. Dear Manoj, you may switch to SBI if you feel Max Gain ‘ll be helpful to you. Regarding the closure charges, no IDBI can not impose such penalties after the implementation of RBI guidelines for scrapping such penalties altogether.

    I’m not sure that you are aware or not but similar product is available in IDBI also with the name Interest saver. Yes the interest in this option is higher by 0.5% over regular interest rate.

    Thanks

    Ashal

    1. Jha says:

      Dear Ashal Ji, Thanks for your reply.

      1. I am basically want to know, whether I can save substantial amount by transferrting loan from IDBI (10.5%) (Outstanding is 15.0 Lakhs) to SBI (@ 9.9%). Is it advisable to pay closing charges (in any) and get the account transferred to SBI.

      2. When I recently contacted IDBI, they informed I ned to pay about 30 K for pre-closure of loan by transferring to any other bank.

      Thanks, Jha

  251. Dear Hemank, Apart from SBI, IDBI, CITI, Standard & Chartered & HSBC are offering similar product in India as on date. Please take your pick from the above list.

    Thanks

    Ashal

  252. Manoj Jha says:

    Dear Friends, I have a loan account with IDBI, who are charging me @ 10.5%. Current outstanding is 15.0 Lakhs. SBI is offerting at loan @ 9.9%.

    Is it advisable to pay IDBI closing charges (Rs 30,000/-) and get the accoung transferred to SBI.

    Pl. Note: I have some spare funds and can be used for MaxGain accounting purpose also.

    Thanks, Jha

  253. Hemank Chheda says:

    Dear Ashal,

    First of all, let me thank you on behalf of everyone for the tremendous service you are offering. Your patience is highly Appreciated.

    I just want to ask a simple question, As said by you, SBI Maxgain Home Loan Acc provides an OD account, where in you can park ur surplus funds towards pre payment and you can thus save your interest on the loan. Also when ever needed you can withdraw surplus funds which are parked for pre payment, thus interest will be calculated on daily basis.

    Is the same feature also available with some other banks offering home loan apart from SBI ?

    Regards,
    Hemank

  254. Dear Girish, Out of 45L Rs. sanctioned loan amount, the interest ‘ll be charged only on the disbursed amount i.e. 30L Rs. Now if you are paying full EMI from day one, the surplus amount which is meant for principal settelment ‘ll be added into you available balance over the regular amortization amount. What does this meanto you in simple language?

    For example out of your EMi of 42K Rs. if 3000 Rs. is meant for Principal repayment & remaining 39K for interest (considering full loan disbursment on day one), the interest is charged let’s say 30000 Rs. So 30K towards Interest, 3k towards, principal repayment & remaining 9K towards available balance.

    As & when builder ‘ll demand more money, SBI ‘ll release upto 45L Rs. whatever excess amount you are holding there, is for your benefit as you ‘ll be saving on Interest.

    SBI has nothing to do with your own surplus amount to consider in disbursal.

    In case you do not opt for last 4-5L Rs. disbursal, the amount ‘ll remain as surplus & you w’d have to inform the SBI, to reduce your loan amount from original 45L to 40-41L Rs. if you want it that way. else such 4-5L Rs. ‘ll remain as surplus at your disposal all the time, which you can use as per your need if the demand is there in future.

    thanks

    Ashal

  255. gitaish gulati says:

    To Add to my last question:-

    What i meant was by the by the first demand letter bank would have disbursed 30L. Now my Full EMI is 42K based on 45 l loans for 20 years. Now since the disbursement is of 30 lacs, interest will be calculated only on 30 lac? Correct me if i am wrong. If that is the case a higher component will go to Principal payment, because of which i will have a reduced principal although the full disbursement is due to happen, so how does this work out. is it we will eventually end paying more since we are repaying faster and loan disbursement has not hapenned fully. if that is the case people will never go for Full EMI?

  256. gitaish gulati says:

    Hi Ashal, Its amazing to see your patience to provide detailed answers:- I have a question around max gain though.

    My Property is costing around 61 lakh. I have applied for a sanctioned limit of 40 lac and rest i am planning to make my own arrangement, however at this point of time i can manage only 16 lac out of 21 lac(61-40). Now If a take a sanctioned limit of 45 lacs and start full emi now(which i am planning to), What if i dont avail the whole 45 lacs since i might able to manage the remaining by 4,6 months as i have time and Since my Possession is end of 2014.?

    Another question:- Even though the loan sanctioned limit is 45 lacs and disbursement amount is 30 lacs, the interest will be calculated on the disbursement amount right? if yes, then even when i pay full EMI, the principal amount will reduce faster right.

    Another question:-

    If I start paying the full EMI then my principal will keep on decreasing since the disbursed amount will be less, So by this Bank will never able to reach the total amount.

  257. Dear Parag, can you mail me your own calculations as well as bank statement?

    Thanks

    Ashal

  258. Parag Kumar says:

    Hi,

    I had one doubt.

    I have been using maxgain account since past 8 months now.

    I maintain a record of the transactions i do to maxgain account (credit/debit).

    But it never matches the available balance.

    The available balance is always greater than the amount i have deposited in maxgain.

    Also i have taken 100% disbursement.

    I am not able to understand why these figures dont reflect the actual nos.?

    I think this is the case with many people.

    Thanks,
    Parag

  259. Dear Bharat, please contact dear Manish to get my mail id.

    manish@jagoinvestor.com

    Thanks

    Ashal

  260. Bharat A says:

    Dear Ashal,

    I recently got loan approved from SBI. I have requested for MG loan in my form. I received the arrangement letter but no where it is mentioned that the sanctioned loan is MG. Instead it is only mentioned as HL for NRI/PIO’s. I have asked the document processing incharge several times about it and she was sure it is MG loan. Is their a way I can verify what type of loan was I sanctioned?

    I could send you the scanned copy of the letter from SBI but I am not sure how to find your email from profile.

    Thanks
    Bharat A

  261. Bharat A says:

    Dear Ashal,

    I recently got loan approved from SBI. I requested for Maxgain loan. SBI has given me Arrangement Letter but no where it is mentioned whether it is MG loan. It is only mentioned HL for NRI/PIO’s. I have asked the lady at RAPC more than ten time is it MG loan she said yes and also told her there is no mention of MG in the arrangement letter.

    Since you mentioned you have also MG loan is it mentioned in the approval letter from SBI that the particular loan is MG loan. I am about to mortage the house next week to SBI i.e, will ask builder to give sale deed and EC to SBI for further processing.

    Please confirm if possible.

    Thanks
    Bharat A

  262. Dear Pawan, please do not deposit any amount as on date as your loan is not MG so any amount deposited by you ‘ll not be the same like MG. You may lose the liquidity for ever for this parked amount.

    Please wait for Equitable Mortgage to complete & then apply in written that you want your Term Loan to be converted into MG.

    Thanks

    Ashal

    1. Manubhai P. says:

      Dear Forum Experts, Specially Ashal Juahari,

      My question is regarding MAXGAIN pertaining to SBI Home Loans.

      NOTE: I have repeatedly gone through most of the threads on this as well as other web-pages to make sure I take least time and call in minimum efforts from the helpers here.

      Background:
      Me being fan of this concept, had applied for MAXGAIN type home loan in prescribed form to SBI RACPC clearly ticking MAXGAIN option in the Detail-C page top. From beginning till end got all formalities completed and now I have even submitted the possession letter etc , after mortgaging the home to SBI after executing Sales Deed From the Developer. I was able to see the Loan Account of Home Loan as well as Personal Insurance Loan linked to same CIF of Internet Banking Login wherein I earlier used to see my savings account only. However, The Loan accounts were appearing in the VIEW ONLY (not Transaction enabled) category of the internet banking page. I thought that I should apply and get transaction rights for this loan account and so approached SBI, wherein I was informed that this Loan account is not of MAXGAIN type/category and so I cant have transactions nor can I have Chequebook/ATM Card etc even if I have completed all the formalities including Full and Final Disbursement, Salesdeed Submission, Mortgaging, Possession Letter Submission, etc, completely. So I have understood that while opening new loan account by the concerned in the SBI, My request for MAXGAIN type account was apparently missed and so ordinary home loan account was opened which is described as SBI SURAKSHIT HOME LOAN in my Net-banking webpage. I have also consulted a friend of mine who uses this type of OD loan account under MAXGAIN, made him see my netbanking webpage and he confirmed that mine is not a MAXGAIN OD Transactions account for sure.

      Question:
      (1) Is it possible to convert the same account now tagged as SURAKSHIT HOME LOAN into MAXGAIN type?
      (2) Whats the easiest way out to get me a MAXGAIN account without much hassle/financial implication?
      (3) If at all some authority(AGM / GM etc) exists in SBI who might have capacity/authority to close my this account and open a new account of maxgain type without any financial implication on either side, details of such office/authority.
      (4) If its only a complaint and redressal way open to me, whom and how should I approach?
      (5) Request to tell details so that I can visit my RACPC with proper preparedness and make my work happen, for sure I am not expecting a smooth sailing in this situation, and most likely people there will not entertain me at the first place so easily, nor might the co-operate, I doubt they Might even tamper with my form to dilute the matter, so need a better detailed help.

      Counting on you Dear ASHAL and others. I have read the posts and am very hopeful of getting guidance.

  263. Dear Prateek, yesw once the possession is there with you, you can withdraw your own surplus amount either in part or full.

    Thanks

    Ashal

  264. Prateek Sethi says:

    Thanks Ashal,

    But that amount I can withdraw after possession right?

  265. Dear Prateek, no, before possession, you can not withdraw amount from MG account.

    thanks

    Ashal

  266. Prateek Sethi says:

    Hi,
    I will get possession in June2014, if I credit some amount in maxgain account, in this case can I withdraw that extra amount before getting possession .

    Thanks

  267. Dear all, somebody has posted a query on 27th Feb 2013 but instead of posting it at the bottom, it is posted some where in between the discussions. I’m sorry to say that I’m unable to locate this query & hence not in position to answer it. Whoever has posted it, I request to repost at the bottom of the discussion.

    Thanks

    Ashal

  268. Dear Pawan, better late than never. One time conversion from Term loan to Max Gain is possible but reverse is not possible. So contact your local RACPC & ask there for your term to MG conversion. My advance wishes for your hard work & leg work. 😉

    Thanks

    Ashal

    1. Pawan Kumar says:

      Dear Ashal,

      Today I went to RACPC after they were not willing to reply to my emails regarding conversion of TL to Maxgain.
      Even after spending close to 3 hours, doing huge leg work and meeting plethora of officials I couldn’t convert it as the official told me that since the CD hasn’t been executed (equitable mortgage rights), the a/c can’t be converted!
      But he told me if I wish to deposit any surplus amount I can still do it and get the same benefits (as in Maxgain like reduced interest outgo) barring the liquidity, which will be activated once the account is converted to Maxgain upon CD execution.
      Do I have any other option apart from believing his words or should I send them a written application and hopefully the account gets converted thru this legal channel which babus prefer (pun intended).

  269. Pawan Kumar says:

    And to add to the misery, I haven’t even received the Loan Agreement yet.
    It wasn’t given to me at the time of disbursement and got to know it on saturday only that such a thing exists!

  270. Pawan Kumar says:

    Unfortunately, No is the answer as I wasn’t aware of it at the time of applying for loan.
    ‘Ignorance is bliss’.
    Anyhow, how can I convert it now? Should I contact RACPC?

  271. Dear Pawan, before I answer your query, I need to know, at the time of applying, had you asked to avail Max Gain exclusively? I.e. had you write down anywhere in your loan application that you want to go for Max Gain?

    Please read your loan agreement for more info on this.

    Thanks

    Ashal

  272. Pawan Kumar says:

    Thanks a lot Ashal for prompt reply!
    This explanation goes a long way in clearing my long-standing doubts regarding Maxgain but (it now appears) in vain.

    Do you have any idea how does SBI decides whether to assign normal Term loan or Maxgain to a customer because last Saturday I went to my branch and they told me that mine is a normal Term Loan and not Maxgain (came as a shock!!!)

    Also, they told me that for Maxgain SBI charges higher rate of interest. Is this true?
    At the time of taking loan last year (June/July 2012), my EMI has been decided on RoI at 10.5% now it is 9.95% (for loan lesser than 30 lacs), any ideas how to take advantage of this drastic change? Can this help me in reducing the amount of my EMI?

  273. Dear Pawan, in case of Max Gain, the working is not same like a normal term home loan.

    If you are parking 5l Rs, in your MG acct. the interest outgo ‘ll be 20K (your example) but principal reduction ‘ll remain 3K. So where are those 2k Rs? well my dear friend, being Over Draft account, those 2K Rs. ‘ll be available for surplus in to your MG acct. itself. so for next month, your surplus amount ‘ll be 5.02L Rs. & this way It ‘ll keep on increasing. so your loan ‘ll be over in exact 180 months but the interest out go ‘ll be lower than normal home loan.

    For a hypothetical situation, if you have parked full 25L Rs. the interest outgo ‘ll become zero but your loan ‘ll run for full term. so the interest part of your EMI ‘ll be available for withdraw as surplus to you.

    In any home loan, the borrower, tends to repay early & close the loan between 5 to 8Y term itself. So in case of normal loan, once a person prepay, there is permanent loss of interest for SBI but in case of Max Gain, there is possibility that due to available liqidity, the borrower may withdraw the amount & loan ‘ll revert back to it’s original position i.e. higher interest pay out due to higher loan amount.

    the MIO & MPR ‘ll change with each passing month due to change in outstanding loan amount. Sample this. In June 2012, Your loan amount was 2500000, now in Nov. 2012, it’s 2488000 & not 2500000.That’s why your MIO & MPR ‘ll not be the same.

    Thanks

    Ashal

  274. Pawan Kumar says:

    Hi Ashal,

    Can you please answer my queries on Maxgain using these assumptions:

    This is the current scenario as per my understanding of Maxgain Loan A/c with these assumptions: EMI=25k(22k+3k), Loan amt=25L, Monthly Interest outgo(MIO)=22k, Monthly Principal reduction(MPR)=3k, Loan Tenure=15yrs/180months.

    1) If surplus=5L is kept in Maxgain Loan A/c, EMI will remain same as 25k, Revised MIO=20k and MPR=5k (assumed figures, I understand that actual will vary as per SBI’s calc.). I hope that is how MaxG works, which means that more principal gets reduced every month and subsequently the Original Loan amount of 25L will finish before the stipulated 15yrs.Pls. confirm if I am right or wrong. Also, why MIO and MPR are not equivalent in 50:50 ratio?

    2) Hypothetically, if someone keeps surplus=25L=Loan amount, EMI will be=25k then MIO=0 and MPR=25k??? If true, does it implies that loan will get finished in (25L)/(25k)=100months=8.33 yrs without paying a single penny of interest?

    3) Although none of my business, how does SBI benefits from this MaxG as their income gets reduced because of the reduced interest outgo.

    4) My EMIs are same for loan but MIO and MPR are varying every month. They are not even same for two 30days months nor for two 31days months. Why is it so???

  275. PRADIP says:

    Thanks Ashal for clearing my doubt.

  276. Dear Pradip, the addition of interest in book balance happens for the fact that bok balance is not your actual loan outstanding amount. But it’s the difference of Drawing power – available balance.

    In simple words, Available balance (parked surplus amount) – Drawing power (actual loan o/s amount) = Booked balance

    Now when the interest was deducted on 31st Jan 2013, this interest was deducted from the parked surplus amount & thus it goes down by same amount & hence the difference of DP to AB increases. hence the book balance increases.

    For example purpose, sample this

    DP on 30 jan = 1542000
    AB = 202000
    BB = AB – DP = -1340000
    Interest amount = 12000 on 31st jan
    Hence AB = 190000
    Now BB = AB – DP = -1352000

    Hope it clarifies your basic doubt regarding Avaiable balance & book balance.

    SBI Max Gain, software do have some glitches due to which the first month calculation many a times, remain problematic. In your own case, in the first month itself the princiap amount should not be 8K Rs. but it happened.

    Thanks

    Ashal

  277. PRADIP says:

    Dear Ashal,
    I forgot to mention that interest was calculated on 31/1 and added to my book balance. why it adds to it?
    Can’t they show a separate column for interest calculated on monthly basis?

    Please do reply. Thanks.
    Regards
    Pradip Chaughule

  278. PRADIP says:

    Dear Ashal,
    I have taken home loan of 15.5 L and EMI started from Jan 13. In first EMI principal deducted 7314/- since interest calculated for 10 days only. I also parked around 2L in my OD account as per convenience, but in Account statement I see 12179/- Rs. interest is charged and added to book balance.
    1. Now I am not understanding for how many days this interest rate is calculated?
    2. On 10/2/13 EMI was deducted of 15.250 K and drawing power was reduced only from 1542686 to 1540868, i.e. 1818/- principal taken from me?? One more thing, a loan calculator for 10% interest rate shows 2081/- principal for same amount without parking extra money parked in it….. Is SBI cheating me??

  279. Dear Rajiv, please read your loan agreement or contact your branch. Please do not assume that it’s base rate linked already. Please confirm the same. Once it’s confirm, please pay the confirm the conversion fee to get new ROI of around 9.95% based upon your original loan amount.

    Thanks

    Ashal

  280. rajiv.p says:

    Right now in my home loan page, the applicable interest rate is shown as 11%. So it looks like base rate based right?

  281. Dear Rajiv, please check with your branch that your loan is a PLR linked or Base Rate linked. In case of Base rate linking what’s the spread? If it’s the current minimum spread, the applicable ROI ‘ll be 9.95%. In case your loan is still PLR linked, please convert your loan to Base rate one & after that pay the conversion fee to come down to the current lower spread of Base rate + 0.25%.

    Thanks

    Ashal

  282. rajiv.p says:

    What is the present home loan interest rates for existing home loan customers? (less than 15l) I mean recently there was some revision right, is it applicable to existing customers?

  283. Dear Mandar, the exta amt. parked by you in MG acct. ‘ll be treated as repayment & thus only for calculation purpose of Interest. This surplus amount at any given point of time is available for withdraw & that’s why it’s shown to you in your bank statement as available balance.

    Why do you want to pay off permanently as it ‘ll result into compromising your liquidity for that surplus amount.

    Thanks

    Ashal

    1. Mandar Kulkarni says:

      Thank you Ashal for the information 🙂

  284. Mandar Kulkarni says:

    Hi Ashal,

    I have got lot of information regarding Maxgain Loan and it’s benefits from this forum. I have recently took SBI Maxgain Loan 22 Lakh (for Resale property).

    I just want to know how to make prepayment?
    I asked to the lady in bank and she told me to put money in your account and you’re done. But if I put some amount in OD account then it is added in Available balance. So what should I do to deduct extra amount permanantly from total Loan Amount?

    Regards

    Kulkarni

  285. Dear Gaurav, please check your drawing power to know the debit of principal amount.

    Thanks

    Ashal

  286. Dear Pravin, in your case, the first EMI which should come in the month of Jan, has not been deducted but there was interest calculation on regular amount. Interestingly, after the credit of EMI in Feb, 2013, the fulll amount has been adjusted as loan repayment. Although it’s wrong on SBI’s part but some where there are some glitches in the software of SBI & first month is prone for such erractic calculations.

    Please do nothing as of now, except for parking more & more surplus & wait till 5th march to get credit of next EMI & see the results.

    The interest to be charged from you for the month of Jan has been adjusted from the first 1L Rs. surplus parked by you.

    Thanks

    Ashal

  287. Dear Vijay, Please ignore the point e answer above in my prev. reply.

    Well whatever you have understod for MOD is correct. It’s indeed necessary. We are in the search of loan & bank has every right to adopt such safe prectices to avoid the chaces of frauds.

    I have paid for my own MOD charges & this is for our safety also in a sense. No one can sell our house even in our absence as the Govt. record ‘ll keep telling the Encubrence over the property in the EC.

    Thanks

    Ashal

  288. Dear Vijay, here are the answers for your queries.

    Hi,

    My SBI MaxGain loan got sanctioned today and approached the bank manager for some queries. He casually mentioned about some 25,000rs max fees for MoD. Could not ask him in detail since the bank was too busy in the morning. Can someone explain me what are the fees/charges thats involved in MG loan.

    a) Processing Fees – either a %age of the loan amount say 0.5% or a fixed sum say 5000 Rs.

    b) Fees for Legal Opinion – Again very nominal – 1000 to 2000 Rs.
    c) Fees for Valuation report Again very nominal – 1000 to 2000 Rs.
    d) MoD fees (is this really applicable) – Can you clarify this? I do hope you are asking for either franking for loan documentaion or Mortgage?
    e) anything else ???? – Please answer my question above.

    Thanks

    Ashal

  289. Dear Pravin, I’m trying to answer your query.

    1). Loan disbursed was 25,40,000/-, so after my first EMI why Limit & Drawing power is 25,22,142 and not 25,40,000/-.
    What’s your EMI & from which acct. it’s getting credited into MG acct.?

    2) After I transferred 1,00,000/- to my Maxgain OD account why available balance is only 83,316/- & not 1,00,000/-
    The book balance of 2538000 was showing an amount of interest due to you which was not debited due to lack of funds. the same has been settled not from your surplus 1L Rs. & that’s why your withdraw balance is now 83K Rs.

    Please wait for 1 more month to streamline MG acct. Interestingly MG acct. software creates such nasty glitches in the first month for many accts.

    Thanks

    Ashal

    1. pravin j says:

      Hi Anshal, Thanks for your reply. Please find the more details as below.

      My EMI is 24150/- and its getting credited to my MaxGain account from my ICICI Bank a/c on 5th of every month.

      statement is as below:

      Full Disbursement 30-Dec-2012 25,40,000/-
      DEBIT INTEREST 31-Dec-2012 1,392/-
      DEBIT INTEREST 31-Jan-2013 21,584/-
      BULK POSTING ECS 05-Feb 2013 24,150/-
      BY TRANSFER 05-Feb-2013 1,00,000/-

      After My first EMI my deducted status was:
      1)
      After Fist EMI was deducted:
      Book Balance : -25,38,826
      Available Balance : 0
      Limit : 25,22,142
      Uncleared balance:0
      Drawing Power :25,22,142
      2) After I transferred 1 Lakh
      it was
      After I transferred 1,00,000 to MaxGain OD account
      Book Balance : -24,38,826
      Available Balance : 83,316
      Limit : 25,22,142
      Uncleared balance:0
      Drawing Power :25,22,142

      from above what i see is book balance = Drawing power – available balance.

      Question is 1) how come drawing power is reduced from 25,40,000/- to 25,22,142 in just one month and 2) why available balance if 83316 instead of 100000/-

      Today I transferred additional 1 lakh and available balance is now 1,83,316 here is other details.
      Book Balance : -23,38,826
      Available Balance : 1,83,316
      Limit : 25,22,142
      Uncleared balance:0
      Drawing Power :25,22,142

  290. sunnyvijay says:

    Hi Ashal and other experts who have already availed SBI Max Gain loan.

    Can you confirm whether the above mentioned MoD is mandatory and part of your Max Gain Loan aswell.

    How should I go about this.

    Thanks
    Vijay

  291. sunnyvijay says:

    Hi,

    Is the MoD requested from SBI is mandatory ? I searched the forum and found this information about MoD from one Mr. Sreedhar which I have reproduced in parts below.

    One more thing the bank manager are insisting is to go for mortgage deed (The bank call this as MOD) in favor of the bank. The manager says this is for the banks safety. This will cost 30 – 50 K in the form of stamp duty and registration charges. If you do this, virtually your loan will be tied up with the bank. It will be a tedious job , if you need to switch a loan to any other bank. The best part of the deal is you need to bear the expenses for “Bank’s safety”. I told the manager i am ready to go for MOD if the bank bears the expenses. I am not so rich to spend for banks safety . Each time I visit the bank, the manager will talk to me about MOD, But some how I am avoiding it

    I guess MOD means “mortgage by deposit of title deed “.
    Usually once the banker lends you the money , after registering the house (or UDS in case of new property), the sale deed / title deed will be with the banker. If you take an EC only your name will be reflected in the EC.There were cases of fraud in this method .If you are well connected , you can get a duplicated copy from the registrar office and sell the house to some one else. The buyer may not be aware that there is a loan pending on that house .
    To avoid this banks have started adopting MOD. Once the registration is done , they will ask you to do mortgage in favor of the bank for the loan amount. This needs to be executed in the registrar office and it will cost money towards stamp duty,legal charges etc. After doing MOD if you take an EC , your name and bankers name along with the loan amount will reflect in it. So the chances of fraud is minimized.
    From the banks perspective its very safe for them. But for us we need to bear the expenses of executing MOD. Moreover when you try to move your loan to any other low cost banker , this MOD has to be cancelled by the old bank. There will be lots of paper work and procedural issues associated with this..
    These are the facts which i learned from my experience. I may not be 100 % correct .

    Thanks
    Vijay

  292. sunnyvijay says:

    Hi,

    My SBI MaxGain loan got sanctioned today and approached the bank manager for some queries. He casually mentioned about some 25,000rs max fees for MoD. Could not ask him in detail since the bank was too busy in the morning. Can someone explain me what are the fees/charges thats involved in MG loan.

    a) Processing Fees
    b) Fees for Legal Opinion
    c) Fees for Valuation report
    d) MoD fees (is this really applicable)
    e) anything else ????

    Kindly clarify

    Thanks
    Vijay

  293. pravin j says:

    Thanks Ashal and jaoinvestor team for solving quries for SBi MaxGain account. I solve lot of my quries but I have onve very specific query….

    I have taken SBI maxgain Home loan recently and yesterday my first EMI was deducted. after EMi was deducted I have transferred addition one lakh into my MaxGain account but somehow calculation does not match.
    1)
    After Fist EMI was deducted:
    Book Balance : -25,38,826
    Available Balance : 0
    Limit : 25,22,142
    Uncleared balance:0
    Drawing Power :25,22,142
    2)
    After I transferred 1,00,000 to MaxGain OD account
    Book Balance : -24,38,826
    Available Balance : 83,316
    Limit : 25,22,142
    Uncleared balance:0
    Drawing Power :25,22,142
    My Questions:
    1). Loan disbursed was 25,40,000/-, so after my first EMI why Limit & Drawing power is 25,22,142 and not 25,40,000/-.
    2) After I transferred 1,00,000/- to my Maxgain OD account why available balance is only 83,316/- & not 1,00,000/-

    Please let me know if anyone know the calculations or ever faced similar issues ?

  294. Gaurav Jain says:

    I have taken a loan of 40L for 15 years with a moratorium period of 7 months. But I have started paying FULL EMI from 1st month only. Will it help reduce the total term in any way?

    1. Dear Gaurav, are you getting the benefit of full EMi in the form of principal adjustment or not? Please check it first with SBI people or even from your netbaking facility.

      Then only I can comment anything.

      Thanks

      Ashal

      1. Gaurav Jain says:

        Ashal,

        I will have to check that. Till now the only entries in my account are:

        31-Jan-2013 (31-Jan-2013) DEBIT INTEREST 3,139.00
        29-Jan-2013 (29-Jan-2013) DR INT CREDIT 784.83
        29-Jan-2013 (29-Jan-2013) DEBIT INTEREST 784.83
        28-Jan-2013 (28-Jan-2013) TO TRANSFER NEFT XYZ 28,22,293.00

        Even my EMI payment has not yet credited. So one more thing, how many days it takes the EMI to get credited. My Salary A/c in HDFC got debited on 5th. Still no credit here in SBI MG A/c.

        1. Dear Gaurav, By the time of writing the reply to you, I hope EMI had been credit into your MG acct. The entries in your acct. for 29th jan is wrongly debited interest & recredit of the same. On 31st jan, the actual interest has ben debited.

          Thanks

          Ashal

          1. Gaurav Jain says:

            Ashal,

            EMI has been credited. As for whether the early-EMI is paying towards the pricipal or not, I think I will come to know that in the next month’s statement.

  295. Dear Pradip, no your father can not sign your MG acct. cheque book, as he is not a joint account holder in your MG acct.

    Thanks

    Ashal

    1. PRADIP says:

      Dear Ashal,
      Where should I ask for a loan agreement copy by sbi(home loan branch/BKC where i franked all papers), they have given me copy on which only my sign is present and blanks for value to be entered. I need it for claiming Interest subsidy from employer.
      Thanks.

      1. Dear Pradip, please contact your branch for the copy of the agreement. Although it’s quite strange to me that your employer is asking for copy of loan agreement. Normally only the interest & principal break up certificate provided by branch of bank is enough to avail tax benefit at source.

        thanks

        Ashal

  296. PRADIP says:

    Dear Ashal,
    I have another doubt if my saving account is a joint account with my Dad, but home loan I am single applicant. I have taken O/D acc cheque book can my father sign It?
    Thanking you.

  297. Dear Pradip, it means your ATM Card is still not linked with your MG acct. Please ask your branch staff for the linking. Alternatively, you may demand a separate ATM card for MG acct.

    Please do note, while withdrawing money using MG accct. through an ATM card, please withdraw it only from SBI ATM, else each transaction ‘ll be charged as MG acct. is not a SB acct. & hence not eligible for mly 5 free transaction.

    Thanks

    Ashal

  298. PRADIP says:

    Yes. Ashal, It has been disbursed fully. Still it is showing me same problem.

  299. Dear Rat, I checked the given nos. The 26220 EMI you are getting & 27041 you are paying, indicates that your loan was sanctioned with a moratorium period of 12 months. That’s why @ 27041 Rs. the loan ‘ll be over in 168 months. Now you have opted for EMI repayment from Jan 2013 itself, the loan ‘ll be closed earlier than 15Y time.

    Thanks

    Ashal

    1. Rat says:

      Thank you Ashal. I now remember seeing it mentioned somewhere about 1 year moratorium period, even though I did not request for such a thing.

      I get another query now. Even though there is a 1 yr moratorium period, I opted for EMI (27041) from the 3rd month onwards. Loan was sanctioned in Nov. I started paying EMI from Jan onwards. Does this EMI contribute towards bringing down the outstanding principle ? Is there a way to confirm this from the onlinesbi page ?

      For the Feb10 EMI, I noted down the following numbers, just before EMI date, and after:
      Date Book Balance Avl Balance EMI
      2/9/2013 -1557254 842746
      2/12/2013 -1530213 869787 27041

      The following numbers remain unchanged from day1:
      Limit 2400000
      Drawing Power 2400000

      Disbursed amount as of the above dates is 16.4L
      I have parked an amount of 80100 in the OD account.

      Does this indicate, in any ways, that the principal-component of EMI is actually bringing down the loan outstanding amount ? Or am I paying only the interest-part as of now ?

      1. Dear Rat, from the given nos. by you, your moratorium period is active & you are not getting the benefit of loan repayment but interest outgo is lower due to surplus parked by you as well as created by excess amount coming from full EMI.

        How did I come to know of it? Just look at your Drawing Power, it’s your actual loan o/s amount as on date & it’s same from day one.

        Thanks

        Ashal

        1. Rat says:

          Sigh!! I tend to believe that this moratorium period with full EMI is a not-so-good thing. Or rather, is it ? Would it have been advantageous if there was no moratorium period at all ? Could you please advise on this ?

          Also, if you too believe that moratorium with full-EMI is not good, is there a way out ? Like walking into the branch to get rid of the moratorium ?

          1. Dear Rat, the moratorium, is not good from financial sense. Please visit your branch & contact your branch manager to get rid off from moratorium if possible. Till the time, this mort. is in place, practically you are paying only interest & no principal repayment is there. yes due to max gain surplus parking of this principal amount into, you are saving some interest but repaying is far better.

            Thanks

            Ashal

  300. PRADIP says:

    Dear Ashal,
    I have little doubt about my atm card withdrawl, because branch manager had told me that you have to use same debit cum atm card just if you want to withdraw from o/d account select current account but when I tried it shows balance of Saving account only. I don’t understand how to connect o/d acc to Atm.
    Please help as usual. Thanking you.

    1. Dear Pradip, have you availed full disbursal of your loan or not?

      Thanks

      Ashal

  301. Rat says:

    Thanks Ashal. That brings a lot of relief 🙂

    Could you help me figure out how the EMI of 27041 is arrived at for my MG loan ?
    The approved loan amount is 24.4L (24L home loan, 40K insurance) for a 15 year period.
    Interest rate is 10%. I tried in different online calculators and always get a lower EMI figure.

    apna paisa calculator (http://www.apnapaisa.com/loan/home-loan-india/apply/emi-calculator.html) gives a figure of Rs 26220 only

  302. Dear Rat, that last day of the month deduction is the interest on 14L Rs.

    Regarding the SMS, please ignore the same. It’s the common problem of mismatch in sms date & actual EMI date.

    Thanks

    Ashal

    1. Rat says:

      So to summarize, there are two payments/deductions that happen on a MG loan:
      1. end-of-the month “interest” deduction that happens from the OD account itself
      2. the normal EMI deduction from salary account (in my case, on 10th of the month)

      I have 3 queries based on this:

      I. Of my 24.4L 15yr loan, 24L is for house, 40K is for insurance.
      14L is disbursed on Nov 2012.
      So in item (1) above, the “interest” is for this disbursed 14L. Am I right ?

      II. In EMI, I believe there is a “principal” component and an “interest” component.
      Is this “interest” component for the entire 24.4L loan amount ?

      III. Is there a way for us to find out the principal-interest split (other than by walking into the branch) ?

      1. Dear Rat, in case of EMI, there are 2 components. Principal & Interest. For MG home loan, the principal component ‘ll be adjusted immediately but the interest part ‘ll wait till the last day of the month & as per the calculation based upon the surplus kept by you, the actual interest ‘ll be debited. The remaining interest part if any ‘ll be there in MG itself as surplus.

        I. Of my 24.4L 15yr loan, 24L is for house, 40K is for insurance.
        14L is disbursed on Nov 2012.
        So in item (1) above, the “interest” is for this disbursed 14L. Am I right ?
        yes the interest ‘ll be for 14L Rs. only.

        II. In EMI, I believe there is a “principal” component and an “interest” component.
        Is this “interest” component for the entire 24.4L loan amount ?
        The interest ‘ll be charged only on the 14L Rs. & balance interest ‘ll be there as surplus.

        III. Is there a way for us to find out the principal-interest split (other than by walking into the branch) ?
        You can prepare a loan amortization sheet for yourself

        Thanks

        Ashal

  303. Dear Bharat, if even after parking the full loan amount, you want to have the liquidity of that amount, a long term MG is beneficial.

    Thanks

    Ashal

  304. Rat says:

    Hi Ashal,

    My SBI MG loan is of 24L. The first installment of 14L was disbursed on Nov 29, 2012. From then onwards, there is some deduction happening on the last day of every month.

    I opted for EMI from Jan 2013. On Jan 10, EMI amount (27041) was taken from my salary account. Now today I get an sms which says “PDC/ECS/SI of Rs 20460 on a/c xxxxxxx is due on 31012013. Ignore if paid”. What does this mean? I have to pay on 10th of the month and then again on the last day of the month ? Isnt something wrong here ?

  305. Bharat A says:

    Dear Ashal,

    In what instance choosing SBI MG loan is beneficial i.e., for a 15y loan period if I plan to repay the loan within 5-7years is it still advisable to go for SBI MG loan?

    I assumed the MG will benefit only if we carry out loan paying for long term.

    Please correct me if my understanding is wrong.

    Regards,
    Bharat A

  306. Rakesh_Gurgaon says:

    Dear Ashal
    I have taken a MaxGain loan from SBI for 25 Lacs.
    While i understand that when i keep additional funds in the Max Gain account the interest will be charged on a lower principal and my loan will be paid out faster.
    Apart from incidental surplus funds, I intend to deposit my annual bonus every year towards paying this loan and reduce my EMI
    MY QUERY: In case i want to reduce my monthly EMI after depositing a lumpsum into MaxGain, is there a limit on the number of times i can do this EMI reduction?
    Regards,
    Rakesh

    1. Dear Rakesh, your understanding is not correct. In case of Max Gain, whatever surplus you are keeping in your MG acct. it ‘ll be treated as part prepayment for the calculation of interest. For example if your EMI is 25000 Rs. & out of which your normal interest is say 21000 Rs.

      Now you have parked some amount in your MG acct. due to which your calculated interest is 14000 Rs. Now my dear friend, this 7000 Rs. saved interest ‘ll not be adjusted towards principal. It ‘ll add up into your existing surplus & ‘ll help to save interest outgo for next month.

      The principal adjustment from EMI in MG happens only as per your original loan amortization sheet. So in effect, your loan term ‘ll remain same (if 20Y, your loan ‘ll run for next 20Y) but the over all interest outgo ‘ll come down.& thus you ‘ll be able to save against a normal home loan.

      Thanks

      Ashal

      1. Rakesh_Gurgaon says:

        Thank you Ashal for the clarification.

        Could you help resolve my query reg EMI reduction as well.

        MY QUERY: In case i want to reduce my monthly EMI after depositing a lumpsum into MaxGain, is there a limit on the number of times i can do this EMI reduction?

        1. Dear Rakesh, Why do you want to go for lower EMI? For that the surplus amount parked by you ‘ll be adjusted permanently against the loan balance & you ‘ll lose the liquidity of the same surplus amount. Yes it’s possible to do the same. Please contact SBI for it.

          Thanks

          Ashal

  307. Dear Kamlesh, the 8666 Rs. ‘ll become surplus & available for withdraw as & when dear Vijay wants to. Please read my above reply again. At the end of the month, the available surplus is 10.08666L Rs. After each month, this surplus ‘ll keep on increasing due to basic 10L Rs. & add on surplus from saved interest.

    Thanks

    Ashal

    1. kamlesh patel says:

      Thanks Ashal for confirming my doubts.

  308. kamlesh patel says:

    So Ashal,

    8666 Rs is reduced from principle & can not be used/withdraw by Vijay
    OR
    It will be added in OD account as surplus which can be used/withdraw by Vijay ?

    Thanks
    Kamlesh.

  309. sunnyvijay says:

    Hi Ashal,

    thats very quick. However I am not clear on the EMI pay out.

    30L – EMI Payout = 25,000
    20L – EMI Payout = 25,000 (however interest payout would be as you provided)

    or
    30L – EMI Payout = 25,000
    20L – EMI Payout = 16334

    Thanks
    Vijay

    1. Dear Vijay, the actual EMI for 30L Rs. loan @ 10% ROI for 20Y term ‘ll be 28951 Rs. not the 25000 Rs. as randomly put by you.

      Now here is the answer from the actual EMI.

      EMI paid 28951

      Normal Interest = 25000 Rs.
      Calculated interest = 16334 (due to parking of 10L Rs. as surplus)
      Surplus from the interest saved = 8666 Rs.
      So for next month, your available surplus ‘ll be 10L+ 8666 = 10.08666 Rs.

      Hope it clarifies your doubt.

      Thanks

      Ashal

  310. sunnyvijay says:

    Hi Ashal and other maxgain experts,

    One basic question on SBI Max gain.

    Assume I have taken loan for 30lakhs at 10% interest and my EMI is 25,000rs per month.
    If I pay/keep 10 lakhs in my OD account then will my EMI reduce be 16,666rs OR still it would be 25,000rs however the 16,666rs would go as EMI and the balance (25,0000-16666) would be available in OD account again.

    How does this work.

    Thanks
    Vijay

    1. Dear Vijay, if you are keeping 10L Rs. in your MG acct. it translates into lower interest pauy out as for calculation purpose your loan ‘ll be 20L Rs. So what ‘ll happen actually?

      30L Rs. no surplus – interest to be charged = 3000000*10/1200 = 25000 Rs.

      Now parked surplus amount = 1000000 Rs.

      Hence calculated interest on 2000000 Rs. loan = 2000000*10/1200 = 16334

      So out of your total EMI instead of full interest deduction of 25000 Rs., only 16334 Rs. ‘ll be deducted & remaining 8666 Rs. ‘ll be available as surplus balance. This add on surplus of 8666 Rs. ‘ll help to bring down interest outgo for next month & ‘ll keep on increasing with every passing month.

      Hope I ‘m able to answer your query. If you are still in doubt, please feel free to discuss.

      Thanks

      Ashal

  311. Anuradha says:

    Thanks Ashal for the response.

    As per my current ROI (12.5), the interest debited is always less than the EMI credit to the MG account. The DP/Limitof my acc. is being deducted by 3-4K each month, but the Book Balance is reduced by (EMI-Interest debited each month) which is 500-800 Rs only. So here the Book Balance will always be greater than the DP. I hope u got my point here.

    To reduce the ROI, do I have to make any payments to SBI.

    Thanks,
    Anu

    1. Anuradha says:

      Ashal,

      Please ignore my first question.
      Please let me know “To reduce the ROI, do I have to make any payments to SBI.”.

      Thanks,
      Anu

    2. Dear Anuradha, yes you w’d have to pay a conversion fee to SBI which is 0.5% + Service tax = 0.57% roughly of your actual outstanding balance. Please do it on urgent basis.

      Thanks

      Ashal

  312. Anuradha says:

    Hi Ashal,

    I have some queries regarding SBI maxgain home loan:

    1. I had taken home loan in 2009 at 8% interest. Curretly the floating for SBI home loan is 10%, but my ROI is showing as 12.5%.

    2. I understand that if we add surplus amount in SBI max gain account, the interest will be charged less but suppose due to some XYZ reason I am not abto to add surplus amount. Due to this my Book Balance (eg. -16,23,000) has become more than Drawing Power/Limit (eg.16,20,000) and get messages from SBI in the first week of every month that my acc. is irregular by xyz amount. Please let me know if is a mandate to have surplus amt in MG account?

    TIA
    Anu

    1. Dear Anuradha, this is happening due to the fact that EMI is old one & ROI is new one.

      First of all, please contact SBI & reduce your ROI to the current ROI of 10% or 10.15%, whichever is applicable to you. After that, increase your EMI a bit.

      To park surplus is a facility & not a mandatory thing.

      if you ‘ll park, you ‘lll get the benefit of lower interest outgo, if not, normal interest ‘ll be charged. Tthat’s it.

      Thanks

      Ashal

  313. Dear Kamlesh, regarding insurance thing, please opt for SBI life Smart Shield policy instead of normally offered Rinn Raksha.

    Regarding, Loan branch & banking branch, you may later on transfer your loan acct. to banking branch.

    Please confirm this insurance thing before singing the loan agreement.

    Thanks

    Ashal

  314. kamlesh patel says:

    Hi Ashal

    Thanks for the service you are providing which is really helpful to the number of people.

    I have already applied for Max gain sbi home loan 15 days back.

    Sbi person not positive for giving the personal insurance deviation, I am having about 20% LIC cover of my full loan amount. He wants to go for cover of full loan amount for there sbi life insurance. Legally it is possible to take a homeloan from sbi without having cover of full loan amount as I have 20 % cover already. If it is then what should I do?

    I recieved sms from sbi, that they initiate my home loan application. Sbi person told me the file has been submitted & xyz is my file number, it will take 22 days to 1 month to approve. Then 1 day I need to visit to branch for some formallities. Which are the things I need to take care hence forth specif for max gain sbi home loan ?

    I have saving account at viman nagar which is nearest from my staying & applied loan at swargate branch. which are points i need to take care while signatures at sbi after I got the aprroval call from sbi.

    Thanks in advance.
    Kamlesh

  315. Dear Satyajit, thanks that this discussion has helped you. Do nothing for transaction rights as at the actual requirements, you may not be able to use if you inform the bank now.

    Thanks

    Ashal

  316. PRADIP says:

    Hi Ashal,
    I have a doubt about home loan Emi because one emi is deducted and
    book balance -1517175/-
    i had transferred 18000/- on 2 nd day so they deducted 425 rs int.
    and Emi 15250/-
    withdraw limit 155000/-
    How to understand how much principal is deducted? and interest is gone in emi?

    1. Dear Pradip, to know the adjustment of principal, please keep an eye on withdraw limit. As & when the principal ‘ll be adjusted, the withdraw limit ‘ll go down.

      Thanks

      Ashal

      1. Amit Pande says:

        HI Anshal,

        Thanks a lot!!! Just by reading your comments in this blog has made me lot more knowledgeable than 7-8 trips to SBI branch and 5-6 phone calls to call center 🙂

        I have taken SBI max gain loan and full loan amount is not disbursed yet.I have an SBI saving account as well which is linked with this OD account.I have also activated netbanking.
        But I think by mistake I am being given transaction write on OD account. Because of this I can transfer money from OD account despite full disbursement is not yet done.Is it a problem?Should I inform bank about it? Or should I leave it as it is.

        Thanks,
        Satyajit

  317. Arun B says:

    Hi Akash,

    I checked with builder, he has not encashed as the actual cheque was never given, only a copy of cheque was given by bank to proceed with registration of flat.

  318. Akash.agg says:

    Arun,

    It seems that builder had encashed the cheque that was given to the builder and so your home loan account had started. Now, the same HL account got converted into MaxGain and so the balance is in negative. Balance in MaxGain account refers to the amount you owe to the bank and that bank charges you interest on.

  319. Arun B says:

    Hi Ashal,

    I have a quick query

    I recently applied for a max gain loan of 50L, but the bank made an error and issued it as a Term Loan, in my confusion I accepted the copy of cheque to be given to builder for starting house registration. The bank started charging interest from same day.

    I later gave an affidavit (as bank asked) to change this to Max Gain, which was changed finally after charging interest for 10 days between this. 🙁

    Now same amount from Loan account got transferred to Max Gain account, but the account statement shows a Negative Balance already even when the actual cheque is not yet given to builder. The bank says this is how it happens, but I’m confused. In an overdraft account, the interest should be charged from the day amount is given out, why should it show as Negative now.??

    Please help.

    1. Dear Arun, the date on which check was prepared, the amount was debited from your mail loan account & is kept in suspense account of SB. The check is issued only against this suspense account transaction. As the money is already withdrawn from your main loan account, that’s why it’s showing as negative balance.

      thanks

      Ashal

  320. Dear agarg, in case of non withdraw of those 8l Rs. the same ‘ll be available as surplus in your MG acct. & you can use for any other purpose later on. to not avail at all & to reduce the loan amount actually by 8l Rs. you w’d have to ask SBI to remove these 8l Rs. from your acct. Here you have the option to either paying original EMI or you may ask to go for recalculated EMI. My take ‘ll be for original EMI to close the loan early.

    the surplus parked by you in maxgain ‘ll reduce your interest outgo. It ‘ll neither reduce your EMI amount nor loan term. I’m giving below an example to understand this thing.

    For a loan EMi is 25000 Rs. & as per current loan situationm the principal part is 5000 Rs. & interest part is 20000 Rs. Now the borrower has parked X amount into MG acct. Due to this surplus, due interest is not 20000 Rs. but came down to 7000 Rs. only. Now what ” happen? From EMI of 25000 Rs. same 5000 Rs. ‘ll be adjusted towards loan but on the last day of the month, instead of adjusting 20000 Rs. towards interest, bank ‘ll adjust only 7000 Rs. & remaining 13000 Rs. of interest part of EMI” ‘ll be available as surplus for next month.

    Home it clarifies your doubt. Please feel free to ask if you need more help.

    thanks

    Ashal

  321. agarg says:

    Dear Ashwal, if I don’t reduce 8 L loan and also don’t avail it (i.e don’t withdraw it), will it mean same thing by default…will it mean by EMI term or EMI amount would reduce automatically?

    Also, if above works, does that mean that if I pay in max gain Loan account other than EMI (when EMI is being deducted i.e moratarium over), it will reduce EMI or its EMI/loan term etc.

    Which is the best option.

  322. Dear Daredevil, please wait till tonight & if nothing happens till tonight i.e. 9th Jan 2013, morning, please contact SBI people for adjustment of principal towards loan from your EMI credited into MG acct.

    Thanks

    Ashal

  323. Daredevil13 says:

    hi Ashal,

    My drawing power has not changed, only the book balance is updated. Is something wrong?

    Book Balance -29,65,338.00
    Available Balance 9,71,662.00
    Limit 39,37,000.00
    Uncleared balance 0.00
    Drawing Power 39,37,000.00

  324. Dear Amrut, I’m trying to answer your query.

    1.As my Spouse is a joint applicant for the agreement that i have made,in this case Will we both be getting the benefit for stamp duty & registration as i am the main applicant.
    If both of you are co-owner in the house property, both are eligible for tax benefit.

    2.Why is it so that some employers do not include the stamp duty clause under tax exemption.
    I can not comment on the knowledge of the finance & acccounts people in any organization & their interpretation of rules. Rule is very clear.

    3.Some of them say that Stamp duty and registration is not exempted under 80c if you don’t have possession of the flat the same year, is this true? as i will be getting my possession in 2014.
    Again a misconception. Possession is required for section 24(b) i.e. interest benefit not for stamp duty or principal repayment benefit under section 80C.

    In case your F&A people are not answering or allowing the benefit, you may claim the same at the time of Income Tax Return filing.

    Thanks

    Ashal

  325. Amrut says:

    Dear Ashal,

    If you can put some light on the below queries.

    1.As my Spouse is a joint applicant for the agreement that i have made,in this case Will we both be getting the benefit for stamp duty & registration as i am the main applicant.

    2.Why is it so that some employers do not include the stamp duty clause under tax exemption.

    3.Some of them say that Stamp duty and registration is not exempted under 80c if you don’t have possession of the flat the same year, is this true? as i will be getting my possession in 2014.

    From one of your earlier replies, it made me clear that if an employer is not considering the Stamp duty exemption u can claim it in TDS

  326. Dear Daredevil, please check your Drawing power. I feel the effect of principal adjustment is already there. In case it is not there, please be assured, it ‘ll be done by Monday evening with back date of ECS credit.

    Thanks

    Ashal

  327. Daredevil13 says:

    I could see the ECS credit into OD account on 7th. Does this mean the principal adjustment will not be done for two days (5th and 6th) during interest calculation?

    If that is the case better to have the ECS debit from SBI SB account to make the transfer quicker between SBI accounts. To do that , should i have to inform Citibank to stop the ECS debit or is it sufficient to inform SBI to make a standing instruction to have the source account as SBI SB account?

  328. Dear Pradip, I’m trying to answer your query.

    Do you think it is required to merge two accounts?
    I’m not asking to merge two accounts, in your case, i’m asking to transfer accts. in a single branch. Yes interest certificate is needed only one in a year, so that’s not a big deal.

    Thanks

    Ashal

  329. Dear Sagar, I’m trying to answer your query.

    1. In my case, will the loan & MG account be in RASMECCC, Navi Mumbai?
    your loan ‘ll be at Sanpada branch. In case you want to switch to Alibag or Belapur, you can ask during documentation process @ RASMECCC.

    2. What to do if I want it in Belapur branch?
    Please ask for the change @ RASMECCC.
    3. Can I even get it done in Alibag branch so that my saving account & loan / MG accounts are in same branch?
    Yes
    4. I am confused, why cant our monthly EMI be paid from MG account? Why do I have to pay EMI from saving account only? In this way I could have maintained surplus amount in MG account & it would have automatically taken care of EMIs. Can this be done?
    Please read this discussion from start again. you ‘ll come to know, the EMI is debited from any SB account & later on get deposited into MG acct. & there the adjustment towards Interest & principal happens. Please try to understand, MG acct. is yoiur home loan acct. not an ordinary acct. Yes being OD acct. you can deposit & withdraw your surplus amounts but for regular EMI payments, you need a separate SB acct.

    Thanks

    Ashal

  330. PRADIP says:

    Dear Ashal,
    Thanks for your timely reply, I am surprised by your MAX(gain)knowledge about Home loan scheme.
    Today morning problem of fund transfer was occuring is resolved because I can see there is radio button for both the account of saving and home loan O/D account also activated. So I don’t think it is required for me to go and switch my account of home loan to saving account branch.
    Do you think it is required to merge two accounts? According to my knowledge it is possible once in life time to merge according to sbi, and I have to go to home loan branch only for taking print out of interest paid in year.
    Should I merge both accounts?
    Thanks for your reply. And once again hats off to your knowledge and your wish to help all those needy people. God bless you.

  331. Sagar Patil says:

    Hi Ashal
    I am amazed by the amount of knowledge you have about Max gain SBI Home Loan.

    I am in process of the same. I applied through Regional office in Sanpada. My loan is approved. I have a documentation process on Thursday in STATE BANK OF INDIA – RASMECCC, Vashi. I have SBI savings account in Alibag. I am living in Belapur. I want the loan account & max gain account in Belapur or in Alibag (Raigad). The property is in Kamothe (Panvel). Please guide me so that my further process after loan is simple.

    1. In my case, will the loan & MG account be in RASMECCC, Navi Mumbai?
    2. What to do if I want it in Belapur branch?
    3. Can I even get it done in Alibag branch so that my saving account & loan / MG accounts are in same branch?
    4. I am confused, why cant our monthly EMI be paid from MG account? Why do I have to pay EMI from saving account only? In this way I could have maintained surplus amount in MG account & it would have automatically taken care of EMIs. Can this be done?

    * I too was confused what is RASMECCC. Just for reference it is Retail Asset and Small and Medium Enterprises Centralised Credit Cell

  332. Dear Pradip, first of all please transfer your home loan account to your SB account branch or reverse, which ever is easy to you. Once both accounts are in same branch this problem of online transactions ‘;ll not be there. This is a common problem faced by many people due to different branches under a single CIF.
    Once transactions rights are there, you can transfer money immediately between both accounts. To break those MODs, please contact your SB branch. Yes you can transfer funds from any of your account to MG acct. no matter the acct is with SBI or any other bank. The surplus amount parked is itself a prepayment till the time it remains there.

    Thanks

    Ashal

  333. PRADIP says:

    Dear Ashal,
    I have a similar problem like Mr. Kulkarni, I can transfer my saving acc bal to max gain o/d acc but reverse is not possible. I have applied for max gain cheque book from home loan branch (is it because i have both account in different branch?)

    {I had saving plus account where automatically excess balance would make a MOD of fixed deposit for a year, this facility is closed after max gain account is linked to my account. I am worried about how to brake these mod’s now which are currently running? }

    I had asked home loan branch to give me transaction rights to max gain acc to transfer fund to saving account, but they said i have to go to saving acc branch, so i approached them but they said we have given you rights but nothing happened!!! 🙁
    Do we have to transfer amount by cheque only? and not by online transactions?
    How to make a prepayment in max gain is it possible online fund transfer to max gain account.

    1. Amit Pande says:

      Hi Pradip,

      I also did same.(linked my saving plus account to max gain loan account.) How did you know that the facility of saving plus account is terminated.

      Thanks,
      Satyajit

  334. Dear Agarg, if you don’t need those final 8L Rs. you w’d have to apply in written to SBI RACPC to convert your loan amount from 30L Rs. to 22L Rs. with same EMI. It’s possible, even today.

    Please check with RACPC people why, your wife’s name is not appearing in the account statements. Although as the basic loan documentation is in joint name, no need to panic.

    Thanks

    Ashal

  335. Dear Daredevil, as it involves 2 banks in your case, please wait till Monday evening for credit of EMI in your Max Gain acct.

    Thanks

    Ashal

  336. agarg says:

    Happy New Year Ashwal,
    First of all I will appreciate your assistance in resolving users queries.

    I have got SBI Max Home Loan sanctioned Rs 30 L with moratarium for 2 years, then EMI of Rs 29000+ for 18 years.

    1. I am trying to pay as much as possible to reduce loan amount disbursed to reduce ineterest and principal. And before completing 2 years, I will ensure that I pay maximum of loan disbursed, so after 2 years, If I had withdrawn 22 L, I would have repaid 10L and will need to repay back 22-10=12 L. And I won’t need further 8 L disbursement as expect long gap in last few demands from builder. At end of 2 years, can I ask SBI that I don’t need remaining 8 L. And set my EMI on 12 L and reduce remaining term from 18 yr to say 7 yr (based on my EMI paying capability)

    2. My SB & OD account are in different branches, but I am able to transfer money from SB to OD online as can see on same user id. One thing concerns me that property is name of me & wife. And loan was applied both names, but when I try to see account statment online in PDF of my OD account, it shows only one name. Whereas, if I see account statment of my SB account, it shows both names. I am just doubting if loan OD account opened by mistake in my name only (as same day my SB account was converted to joint account). when I ask branch, they don’t seem to understand, they just say that only one name will be visible. I think it mght cause issues later, if my wife starts working and both of us need to claim IT refund.

  337. Daredevil13 says:

    Ashal Ji,

    I have set 5th as my ECS date for clearance from my salary account with Citibank to SBI Maxgain. This is my first EMI and today i could see ECS clearance on Citibank with the comments “ECS DEBIT PAID Paid to S.B.I., R.A.C.P.C” but i dont see the corresponding credit on my SBI Maxgain account. Will it take one day for it to reflect on SBI account?

  338. Dear Narayan, as the primary loan account holder is your wife, the CIF is different for both accounts (SB & loan). please apply for transactions rights on your wife’s loan account. you can then see as well as transact into it.

    thanks

    Ashal

  339. Narayan Mukku says:

    HI All,

    I have taken a SBI Home loan of 25L out of 20L was disbursed in last month, My EMI starts from May 2013 onwrads.

    My concern is my Home loan is linked with the saving account but i am not able to view the Loan A/c through online. Home laon is on my Wifes name in one of Hyderbad SBI branch and Savings account primary name is my name & made joint account to include my wifes name, the a/c is in one of Pune SBI branch. as the A/C’s are in different states i am not able to view the loan through net banking? do i need to transfer the saving a/c to loan account branch? or what should i do for viewing/transction rts on my loan account?

    your suggestions are much appreciated,
    Thanks In Advance,
    Narayan

  340. Dear Anudeep, how much interest you ‘ll earn from your SB account, if you keep money from 5th to 25th in it & then ‘ll transfer to OD? How much interest ‘ll you from 5th to 25th in OD account against the same shortfall of money?

    This basic calculation ‘ll answer your query. On a simple note, you are earning 4% in SB & paying 10%+ in your home loan, so which is the way to go ahead ‘ll answer you itself?

    Thanks

    Ashal

  341. Dear Akash, please tele talk first with your Indore branch manager, if he can accept your scanned application for transaction rights, do so. Else, mail him after signing the same.

    In case he insists for branch visit, you w’d have to do so.

    Regarding interest certificate, you can e-mail again & demand the same on e-mail from your manager. Alternatively to kep the things simple, in my personal opinion, if possible to you, please transfer Delhi SB & Indore OD account first to Mumbai branch, near to your home or office & then proceed for transaction rights & interest certificate.

    Thanks

    Ashal

  342. Anudeep Saha says:

    Hi Ashal,

    Thanks for the reply.

    What I meant was that I will be having surplus cash at the beginning of every month. So if I park the money at the end of the month it will have the same effect as parking it in the beginning of the month?

    Regards,
    Anudeep

  343. Akash.agg says:

    Hi Ashal,

    Happy New Year and Congratulations for running this thread. Also, thanks for keeping this thread alive … I am located in Mumbai but my Max Gain Account was opened in Indore due to property being located in Indore and SB account in present in Delhi Branch. The accounts are linked using the same CIF ID and I am able to view the account in my net banking. I have following queries:

    1. What is the process for getting the transaction rights on OD account, Can we apply online, or mail an application to Indore branch or use phonebanking? or Visiting the branch is the only option.

    2. Can we request for the interest certificate online, which is required for availing the tax benefits.

    Thanks,
    Akash

  344. Dear Anudeep, whenever one has free cash balance, it should be parked into Max Gain acct. There is no good day or bad day.

    Thanks

    Ashal

  345. Dear Ppipara, now I can understand the difference in the amount. The interest deducted from your account on 31st Dec 2012 is the reason that your available balance is lower than what you were able to see on 30th Dec 2012.

    Please drop your mail id request to dear Manish in the below link & you ‘ll get my mail id. alternatively, you can search me on Facebook by my name Ashal Jauhari.

    http://localhost/jagoforum2/contact/

    Thanks

    Ashal

  346. Anudeep Saha says:

    Hi Ashal,

    I have the following question:

    When should one park the surplus in MG account? In the beginning or end of the month and why?

    Regards,
    Anudeep

  347. ppipara says:

    Hello Ashal,

    I am unable to find your e-mail id. Kindly guide, or drop me a test e-mail (I hope you see my e-mail on my profile?) and I answer you back.

    Thanks
    Praveen

  348. ppipara says:

    Hello Ashal,

    Thanks for your answer. My answer below.

    1. No, there is no interest pending, and to be clear, before I deposited ~100,000 2 days back, the available balance as per my calculation was 22509, and in the website it was showing 22488 (very close to my value), yes still there was a difference.
    After I added the sum of 1L, it was changed.

    2. The loan account started on 17-Oct and the drawing limit is changing and I am able to transfer the amount to and fro from my savings account.

    3. The loan is still pending as I am yet to submit ‘permission to mortgage’.. but the drawing limit is changing, so not sure its a problem.

    I will e-mail you the statement (after removing sensitive information). I have also logged a online ticket with SBI for the same.

    Thanks
    Praveen

  349. Dear Ppipara, i think there was some pending interest in your account which was adjusted against your deposit of 1.2L Rs. & that’s how it become 80000 Rs. available balance.

    For exact clarification either mail me your account screen shot or ask with SBI people which ever way you are comfortable at.

    Due to forum policy, I’m not quoting my e-mail id. you can get it by clicking on my name in this reply from my profile.

    Thanks

    Ashal

  350. Dear Email protected, here I’m trying to answer your queries.

    1. The conversion fee is 0.5% of your O/S loan amount (28L Rs. in your case) + service tax there on @ 12.36%, that’s how it becomes 16000 Rs.

    2. should you opt for restructure? Yes as the ROI is 1% differance, it’s a good deal.

    3. If you have already completed 1Y in your existing loan, you can apply for top up. In my personal opinion, please opt for rate reduction first before applying for top up for the reason, your new top up loan ‘ll also be at the running ROI which may be 11% or 10% as per your case. In case of top up first & conversion later on, you w’d have to pay conversion fee on top up also & that ‘ll be your loss.

    thanks

    Ashal

  351. Dear Suresh, you can avail PAL from Banglore no issue in that. The issue ‘ll start for the actual processing of loan once you finalize the property in native. although SBI being PAN India reach, you ‘ll get service. Please go ahead but before that make sure, the property you intend to purchase should be a clean property as per SBI norms.

    Thanks

    Ashal

  352. ppipara says:

    Dear Ashal,
    First of all, congrats on this excellent and informative forum.

    I hv a OD max gain account and deposited about 1,20,000 in various times in last one month. But the available balance shown is only 80,000.

    Do you know why it is.. Book value is showing correctly as per EMI deposited. The account is 2 months old.

    Thanks for your help.

  353. [email protected] says:

    Also, my current ROI is 11 % and bank is asking to pay around 16K and get it reduced to 10%
    How do they calculate 16K?
    Also, do u think its worth paying 16K and get it reduced to 10%

  354. [email protected] says:

    Dear Ashal,
    I have a home loan with SBI Maxgain around 28 lakhs. Now I want to avail a topup loan of around 6-7 lakhs for furnishing.
    I am expected to get my flat in Aug 13.

    When can I approach bank for top up?
    Is it readily available, what is the process for the same?

  355. suresh says:

    Hi,

    Can you explain about PAL ? I am having Corporate Salary account in Bangalore SBI Branch..But i will be taking loan from My native place in Tamilnadu..So can i get the PAL Letter from Bangalore SBI bcoz the process will be faster here as i have salary account here also LESS crowd here..?

  356. Dear Suresh, please do note, REality loan is not a home loan in pure sense, so there may be a penalty. Exact penalty only SBI people can tell.

    Apart from the penalty if any levied by SBI, there ‘ll be STCG tax liability if you sell your plot at a profit. Please take note of this. There is more to it, you can not adjust the interest loss against your plot sell.

    thanks

    Ashal

  357. suresh says:

    Hi Ashal,

    Can you explain about SBI PAL(Pre Approved Load) & SBI Reality..
    I need to know much abt SBI Reality which is for PLOT Purchase loan.

    Assume that i am buying a land of worth 10laksh thru SBI reality..As per the Terms of SBI Reality,We need to start the construction within 2 years.I can start the construction in 2 years..But assume that i dont like the plot after 23 months and planning to see that…So can i preclose thae loan before 2 years and sell it ?

    Whether any fine will be therer ?
    Reality loan also 10% like normal Home loan?

  358. Dear Vijay, 3520000+750000=4270000,that’s your total loan amount.
    The excess amount is your sanctioned loan amount which is 4270000-actual loan amount I.e.3520000.

    Please calculate yourself that paying full semi and paying tranche semi what all be the final effect at the end of loan term.

    Thanks

    Ashal

  359. sunnyvijay says:

    Hi Ashal,

    some follow-up questions

    >> Actually you should go for the full loan amount which is 4270000 Rs.
    How did you arrive at this amount.

    >2) SBI tells me that they will pay me directly for the funds that I put from pocket to >compensate the schedule wise distributed loan. Is this how it happens ?
    >Yes that’s right, you ‘ll get the excess amount into your OD acct.
    Is this excess amount from the loan sanctioned ? Assume I take a loan for 3520000 (ie 80% of 40lakhs) and pay balance 20% from my pocket ie 880000. Assuming SBI would have released 30lakhs now to builder. Which is the excess amount here.

    > If you do have repayment capacity, please go for full EMI from day one to reduce the >interest outgo over the period of the loan.
    Can you explain with an simple example on how this could be better than Tranche EMI.

    Thanks
    Vijay

  360. Dear Vijay, here I’m trying to answer your queries.

    My questions are
    1) My total money is 3520000+750000+250000 = 4,520,000 which is over the cost of flat ie 44laks. Should I reduce the SBI loan from 80% or use the additional amount to pre-pay/OD the loan amount.
    Actually you should go for the full loan amount which is 4270000 Rs. in your case if you do have repayment capacity. As of now pay 20% of that 44L Rs. from your pocket to builder either in full or in tranches & later on the same money ‘ll be available at your dispospal in OD acct. if you do want to use it for any other purpose – say furnishing of the new house.

    2) SBI tells me that they will pay me directly for the funds that I put from pocket to compensate the schedule wise distributed loan. Is this how it happens ?
    Yes that’s right, you ‘ll get the excess amount into your OD acct.

    3) I think Tranche EMI would be better since I would be paying EMI+ Principal once for the amount I had taken as Loan. Is this the best option.
    If you do have repayment capacity, please go for full EMI from day one to reduce the interest outgo over the period of the loan.

    Thanks

    Ashal

  361. Dear Manoj, the workable solution to get things going, please transfer your Kolkata OD account to your Pune Branch. The reason is your CIF rights are with Pune branch & OD account is in Kolkata branch so you ‘ll keep facing issues & ‘ll not get any satisfactory solution. Once the OD acct. ‘ll also come into Pune branch, you ‘ll get transaction rights.

    Actually Kolkata branch can provide & should provide transactions rights but many a time branch staff is either ignorant or do not want to co-operate.

    Thanks

    Ashal

  362. sunnyvijay says:

    Hi Ashal,

    I am impressed with your answers and thats really a great job. However reading all the answers I got over confused and would request your help in the foll. scenario.

    Project Status: 90% completed
    Cost: 44 lakhs
    SBI Loan: 80% ie 3520000
    Other Loan: 750000 (will be paid directly builder)
    Advance: 250000
    I would like to go for 20:80 with sbi max gain. However I want to avail the other loan facility that I have till 7.5 laks. The builder is asking for 2.5 lakhs as advance. SBI would release the funds only till 90% since its not yet completed and they convey that I can pay from my own funds and SBI can pay me later directly.

    My questions are
    1) My total money is 3520000+750000+250000 = 4,520,000 which is over the cost of flat ie 44laks. Should I reduce the SBI loan from 80% or use the additional amount to pre-pay/OD the loan amount
    2) SBI tells me that they will pay me directly for the funds that I put from pocket to compensate the schedule wise distributed loan. Is this how it happens ?
    3) I think Tranche EMI would be better since I would be paying EMI+ Principal once for the amount I had taken as Loan. Is this the best option.

    I hope I am not confusing too much here.

    Thanks
    Vijay

  363. Manoj Choudhari says:

    Hi Ashal,

    I have taken SBI-MAX Gain home loan from branch 769 in karnataka.I have my savings and salary account at branch 4120 in Pune.

    I approached the SBI 769 branch to provide transaction rights for OD account so that i
    can transfer money to this account and also transfer it back to the savings account.
    They are saying that it would be provided branch 4120 and their branch do not have
    rights.

    When inquired in branch 4120 they said that my Home loan OD account is not in their
    branch.

    Please help me on how to resolve this issue.

    Thanks
    Manoj

  364. Dear Amit,here are answers for your queries.

    1. If your cashflow permits please opt full semi from day one.

    2. Yes you can opt for partial semi as of now and switch full any time later on.

    3. If you feel 50L cover is enough please do not purchase new cover else you should opt for a regular Prem. Paying cover of as per your need from d sbi smart shield.

    4. Till the time possession of your house is not with you only principal repayment benefit u?s 80c is available.

    Thanks

    Ashal

  365. Amit Mittal says:

    Hi ashal,

    I have finalize the property (Flat INR 37Lac- possesion after 1.5 yrs) and now planning for Home loan(Required max. INR 27 lac) .I am planning to go for SBI Max gain but I have few queries.
    1. Since my loan disbursal will be CLP – Construction Linked Payment so should I go for full EMI from 1st month or should go normal EMI (based on disbursal).
    2. If initially I go for normal EMI then can I switch to full EMI option before full disbursal).
    3. I have taken a term policy of 50 lac so shall I need to take Insurance policy on Home loan.If yes then what would be better options.
    4. Can I avail rent and EMI both for tax benefit or how can I maximize tax benefit.

    Thanks in Advance.

  366. Dear Prashant, please ask for transaction rights for your MG Acct.

  367. Prashant R says:

    To all team members,
    I sincerely thank all of you for creating such a wonderful thread.

    Hi Ashal,
    I have recently transferred my loan account from one private sector back to SBI (Interest difference: 1.25% 11.25 to 10)

    I am having savings bank account with SBI and I can able to see the OD account and savings account from same login.
    I have tranferred the amout from SB account to OD account but unable to do so in reverse.

    I enquired about this in bank and the person told that I have to use either ATM or check book for the same. Online transfer from OD to SB not allowed.

    Request community members to throw some light as I remember that one of earlier thread mentions that online transfer from OD to SB is allowed.

  368. Dear Jegan, Please apply for the loan today itself. The time taken by SBI to sanction the loan can be utilized by you to construct the required level. Actually, from here on wards, you may get a better idea, how much to pay from your own pocket for the construction & how much ‘ll come from SBI’s Loan?

    Regarding the onsite issue, please tell the branch manager or RACPC staff in advance & they ‘ll give you the required input as well as the legal frame work as well as documents as per their own requirement.

    Thanks

    Ashal

  369. jegan r says:

    Hi Ashal,

    Thanks 4 quick reply..I will be constructing the house.So say before Feb i ll do all the initial basement and Borewells.Then i ll go to SBI for Loan.Definitely they ll take some time ryt to approve the loan.So by the time if i moving to onsite,Will SBI sanction the loan and disburse the loan amounts in installments with my father’s signature ? Or till the final sanction of the loan i should be Signing ALL the documents?>otherwise they ll reject the loan?

  370. Dear Jegan, first decide that are you going to construct or to purchase a ready built house. In case of construction by you, the process involves certain pre works from your side where as in case of a ready built house, you only need to pay your part in the over all cost of the house & rest of the part ‘ll be paid by SBI under the sanctioned loan amount.

    You can create a POA in your father’s name but do not forget to get it registered. Even SBI people ‘ll also ask for it. Regarding the home loan, all the financial papers ‘ll be yours’ but in your absence, your father ‘ll sign each paper on your behalf.

    As you are eligible for 0.25% concession, your ROI ‘ll be 9.75% for loan amount upto 30L Rs. or 9.9% for more than 30L Rs. loan amount which is a very cheap rate as per current market situations.

    Please go ahead.

    Thanks

    Ashal

  371. jegan r says:

    Hi Ashal,

    Can you explain POA (Power of Attorney) in Detail ?
    Actually i am planning to construct a House ( OR will purchase a CONSTRUCTED house) shortly.But in Feb i may go to onsite..

    TO get the loan i should first finish of with basment and Borewells right.So definitely i cant get the loan before Feb..

    So how can i get the loan from SBI..Can i set my father as POA and get the loan sanction from Bank..

    I am workin gin MNC and have salary account with SBI..I will also get additional 0.25% concession from SBI

  372. Sri_P says:

    Ashal & others,
    SBI has lowered the loan conversion fee from 1% to 0.56%. I am not sure this is applicable for all. In my case (I have taken loan in Feb 2012) my interest rate was 10.5% when sanctioned and with 0.56% of Drawing power as conversion fee they have lowered my interest rate to 10.15%. So this is a good drop of 0.35% and I felt it is worth paying the 0.56% of DP, especially for people who have taken loan of 30+ lacks.
    I calculated and it comes to a savings of close to Rs.900 per month and I am set to recover the cost incurred in <2 years. May be this info. is useful someone who wants redurce their interest rate by paying conversion fee.

  373. Dear Sajidmalik, I’m trying to answer your query.

    1. I want to pay off the complete loan outstanding amount in next 1 year, How to do it in best saving way?
    Transfer whatever excess money you have here & there into OD account & once the book balance become zero, you can ask SBI to close the loan.

    2. Can i pay excess amount periodically to my SBI OD account from my other HDFC regular saving account?
    Yes, you can use any other account to transfer money into OD acct.

    3. i was told EMI should be paid only from NRE account, How to pay if i have funds available in other regular saving account in india?
    Please keep only EMI amount into NRE acct. any other excess oney should be into OD acct. itself.

    Thanks

    Ashal

  374. sajidmalik says:

    Hi Dear,
    I am NRI staying abroad.I have housing Loan from SBI MAX GAIN since year 2009, Tenure 15 yrs. Loan Amt:17.80 Lac, ROI was 8.5% 1st year, 10% second year and now its 12.5%.

    As of now it shows Book Balance:15,48,759. Limit: 15,20,319.
    i am holding OD account with one branch and NRE saving account with other branch. Both account linked with single user id and CIF No.

    My question is:
    1. I want to pay off the complete loan outstanding amount in next 1 year, How to do it in best saving way?
    2. Can i pay excess amount periodically to my SBI OD account from my other HDFC regular saving account?
    3. i was told EMI should be paid only from NRE account, How to pay if i have funds available in other regular saving account in india?

    Will Highly appreciate your response to this.
    Regards,
    Sajid Malik.

  375. Dear Sreeforu, in case of Max Gain, the interest ‘ll be deducted from OD acct. only & that too on the last day of the month.

    Thanks

    Ashal

  376. sreeforu says:

    Thanks Ashal for your Reply.

    Interest is debited from My OD account is that normal ? it has to be savings account right in general ?

    Thanks,
    Sreenath

  377. Dear Ganesh, I’m trying to answer your query.

    HI Ashal ,
    I got a SMS alert mentioning I am been sanctined 68 lakhs as loan from SBI.
    I have following questions.
    1) The property value is 85 lakhs, I have already paid 30 lakhs as advance to the seller. The balance payable to the seller is only 55 lakhs. Will the bank will reimburse the balance amount of 13 lakhs ( 68-55 lakhs ) to me?
    This surplus amount of 13L Rs. ‘ll be available in your Max Gain acct.

    2) Can I say I am in need of only 65 Lakhs at the time of disbursement? will that cause further delay in getting the loan.
    Withdraw only as per your need & later on, you may ask SBI to reduce the loan amount from the sanctioned one to the actual utilized one.

    3) My salary account is with ICICI. they asked me to open a SB account with SBI also. Now bank is asking me a ECS form to be filled up for transferring the amount from ICICI account to SBI loan account.
    Can I give my SB account of SBI instead of ICICIC for direct debit?
    Yes, but ‘ll SBI people accept it for loan EMI payment, only they can answer.

    Howe to optimize this dealing? Best way is to convert either your Max Gain account or SBI SB acct. into your salary acct.
    My intention is to parki max amount in the loan account even if it is for some days. Can I give the loan account itself as salary account with my employers? Yes you can, but ‘ll your employer entertain such request, only you can answer,

    Thanks

    Ashal

  378. Dear Sreeforu, I’m trying to answer your query.

    Dear Ashal,

    Can you please explain what is the meaning of these messages?
    The 379 figure seems some calculation mistake & the same rectified by SBI people. Regarding next message, it’s normal practice of SBI to send SMS 2-3 days in advance regarding deduction of EMI, so as borrower can maintain sufficient balance in the account.

    Till now no EMI got deducted from my savings account only interest got debited on October 31st. (DEBIT INTEREST).
    This may be due to the reason that your loan is under moratorium as of now.

    Is EMI will happen automatically or I need to pay manually from Savings account?
    From whatever, you have said, it seems, your EMI ‘ll be debited from your acct. as & when after moratorium period is over.

    Thanks,

    Ashal

  379. ganeshkrishnan says:

    HI Ashal ,

    I got a SMS alert mentioning I am been sanctined 68 lakhs as loan from SBI.

    I have following questions.

    1) The property value is 85 lakhs, I have already paid 30 lakhs as advance to the seller. The balance payable to the seller is only 55 lakhs. Will the bank will reimburse the balance amount of 13 lakhs ( 68-55 lakhs ) to me?

    2) Can I say I am in need of only 65 Lakhs at the time of disbursement? will that cause further delay in getting the loan

    3) My salary account is with ICICI. they asked me to open a SB account with SBI also. Now bank is asking me a ECS form to be filled up for transferring the amount from ICICI account to SBI loan account.

    Can I give my SB account of SBI instead of ICICIC for direct debit? Howe to optimize this dealing? My intention is to parki max amount in the loan account even if it is for some days. Can I give the loan account itself as salary account with my employers?

    Regards,
    Ganesh

  380. sreeforu says:

    Dear Ashal,

    Can you please help me w.r.t my home loan problem.

    On Sept 14th I took SBI max gain home loan from SBI. It’s for under construction flat so as per instructions only 12 lakhs got released in total of 20 lakhs loan amount. This release happened in mid of October.
    As I have Savings account from SBI itself they took standing instruction from me for loan repayments.

    On November 14th I got message saying “your loan acxxxx xxx373 irregular by rs 379.00.please contact branh manager.ignore if paid”

    On 26th November I got message saying “pdc/ecs/SI of Rs 23253.00on a/c xxxxxxxx852 is due on 30/11/2012.pls ignore, if already paid

    Can you please explain what is the meaning of these messages??

    Till now no EMI got deducted from my savings account only interest got debited on October 31st. (DEBIT INTEREST).

    My account details are as follows.

    xxxxxxxx852 is my OD account.
    acxxxx xxx373 is my loan account

    Is EMI will happen automatically or I need to pay manually from Savings account?

    Thanks,
    Sreenath

  381. Dear Santosh, here is reply.

    Hi Ashal,

    I have got a home loan through SBI 2 years back. The interest rate was fixed for the first three years. I am in third year now. I paid pre-emi for the first 2 years. 3 months back I got the keys of my new home.

    I have the following doubts :

    1. Can I avail the facilities of MaxGain ? [ I dont know what type of loan I got]
    Please check from your loan papers, what type of loan you got. in case your loan is not Max Gain, you can convert it, into Max Gain.

    2. The loan amount that was allotted was 25L but I have availed only 21L. I paid the final settlement from my own source. Should I go to SBI for conveying this ?
    Please check with SBI, what’s the status of not utilized 4L Rs. amount.

    Thanks

    Ashal

  382. Dear Nitin, here is reply.

    Hi Ashal,
    Thanks for the information you shared with all..I have applied for sbi home loan (max gain)and opted for pre-EMI for 12 months..Loan amount is 30L interest is 10% an tenure is 10yrs..I have the below query on Pre-EMI option that I have choosen..

    – Suppose bank disburse the amount of 4L as asked by builder, Then my interest (not principal) will start deducting from that time when the disbursement is made ?
    Yes is the answer & the interest ‘ll depend upon the partial disbursal made by bank to builder.

    – After the bank has made the disbursement, Can I transfer the 4L to my max gain OD account (after say 4-5 days)? Is the payment to OD account allowed from the day the first disbursement is made ? Please note that I have opted for pre-EMI for 12 months.
    You can transfer even on the same day, please do note, till the final diasbursal is not done, you can not withdraw this surplus amount in between in case you need so.

    – After the 4L is trasferred to OD account, the interest should be zero..Would there be any deduction as part of EMI or interest from my SB account ?
    As you have opted for Pre EMI, these ‘ll be deducted but the deducted amount ‘ll remain as surplus in to your Max Gain account.

    Thanks

    Ashal

  383. Dear Ashish, I hope that from dear Sri_P’s reply you are able to figure out your lihne of action.

    Thanks

    Ashal

  384. Dear Sri_P, here is answer for your query. Please do not opt for rate conversion as of now. please wait for some more time to get a lower rate. the conversion fee of 1% ‘ll be chanrged on the drawing power which is your actual outstanding loan amount as on date. Book balance is the calculated loan balance & it ‘ll not be considered for fee payment.

    Thanks

  385. Dear Sudarshan, please contact your branch for remaining disbursal. Although RACPC people ‘ll do the job but you should contact through your branch only.

    Thanks

    Ashal

  386. Dear Sachin, I’m truying to answer your query.

    Hi Ashal,

    I have a question about SBI MAX Gain Home Loan. I have taken total loan of 15,00,000 and my EMI is ~ 15,000 per month. I parked around 5,00,000 surplus amount in the MAX GAIN OD account. So interest would be applied only on 10,00,000 amount. But my EMI remains same. So if I don’t withdraw this surplus 5 lac amount and my EMI remains same, will my loan get paid before the loan tenure?
    the answer is no.

    If I get some more surplus amount of 10,00,000, is it a good idea to deposit this in MAX GAIN OD account? It will make the surplus amount to 15,00,000 same as full loan amount. What happens if this happens? If the EMI continues, it will be surplus amount more than total loan amount. Does that mean there will be no interest as full principal amount is “paid”? Will SBI close my account saying my loan is paid or will keep it open till the tenure of the loan?
    SBI ‘ll close the loan if & only if, you ‘ll ask to do so. In this case the parked surplus amount ‘ll be adjusted towards the outstanding loan balance by SBI & your money ‘ll be taken by SBI.

    I know this sounds very foolish in a way that if I have full loan amount available, why should I take the loan? But I have surplus amount as of now for short period of time and planning to spend it in 1-2 years in future. Please let me know. Appreciate your help.
    Please park your surplus amount for this 1-2Y time frame into loan account. The parking ‘ll bring down your interest outgo & after this 1-2Y time frame is over, the interest ‘ll return back to normal calculation but do remember, in between duiring this parking phase, the saved interest amount of EMIs ‘ll also add up into your MG account |& now this ‘ll help to save interest outgo after withdrawl of parked surplus.

    Thanks,

    Ashal

  387. Dear Rat, please deposit 40k Rs. immediately in your Max Gain account & do not touch it till the end of your loan to save the interest outgo on your insurance prem. amount.

    Thanks

    Ashal

  388. Santhosh Kumar says:

    Hi Ashal,

    I have got a home loan through SBI 2 years back. The interest rate was fixed for the first three years. I am in third year now. I paid pre-emi for the first 2 years. 3 months back I got the keys of my new home.

    I have the following doubts :

    1. Can I avail the facilities of MaxGain ? [ I dont know what type of loan I got]
    2. The loan amount that was allotted was 25L but I have availed only 21L. I paid the final settlement from my own source. Should I go to SBI for conveying this ?

    Thanks in advance.

  389. nitinsharma85 says:

    Hi Ashal,
    Thanks for the information you shared with all..I have applied for sbi home loan (max gain)and opted for pre-EMI for 12 months..Loan amount is 30L interest is 10% an tenure is 10yrs..I have the below query on Pre-EMI option that I have choosen..

    – Suppose bank disburse the amount of 4L as asked by builder, Then my interest (not principal) will start deducting from that time when the disbursement is made ?

    – After the bank has made the disbursement, Can I transfer the 4L to my max gain OD account (after say 4-5 days)? Is the payment to OD account allowed from the day the first disbursement is made ? Please note that I have opted for pre-EMI for 12 months..

    – After the 4L is trasferred to OD account, the interest should be zero..Would there be any deduction as part of EMI or interest from my SB account ?

    Your help is appreciated !!

  390. Sri_P says:

    Ashish,

    If you are under maxgain Homeloan scheme from SBI, then my suggestion would be go with Full EMI right from beginning. For me, from the loan sanction, the builder took 7 months for full completion and SBI used to disburse the loan in multiple stages. But I paid full EMI for all 7 months and when the full disbursement is done, I did have 1+ lac still available for withdrawal which is cool. The advantage of paying full EMI is that significant portion of EMI goes against principle component and gives benefit in subsequent month interest calculation. Other cool thing is this excess money that you pay in the initial period is available for withdrawal after SBI makes full disbursement. This excess money can help you with other expenses like wood work etc towards the end.

    In this initial period of EMI, when full disbursement is not done interest portion will be less and the principle portion will be high and this part really save interest for the subsequent month. But for people who cant afford full EMI, they can go with partial EMI for 6 months before moving on to full EMI. But based on my personal experience, Full EMI is the best thing to save good amount of interest.

    All the above is applicable for Maxgain scheme only. Maxgain is really a cool product and if people understand the the scheme well, they can really use it full potential. Thanks to Ashal for giving lot of information in this forum and it was very useful to me.

  391. Ashish says:

    Hi Ashal ji, can you help me with following

    Here is my Question. I have done partial payment to builder say 40% . Out of the rest 60% left i will be paying 25% and taking loan from SBI for rest 35%.
    1) Should i take up loan first to pay to the builder , before start paying my share to the bulder
    2) Should i start full EMI payment even before taking all the loan amount from bank. I am sure that i wil need to use up all my loan limit cap (that put to be 14.5L by SBI). Right now i have taken 5 L so far? I think i have enough income to just start paying back the full EMI right away.
    Can you tell me which would be the most beneficial for me?

  392. Sri_P says:

    Ashal,

    Ashal and all others,

    The maxgain works pretty well. As I keep park my excess amount, the interest out go is reducing well. Now I have a question, I took maxgain at 10.5% and now the interest rate reduced to 10.15%. I checked with RACPC and they say that if I pay 1% of the outstanding loan I can get converted to new rate. Now my question is, what is outstanding loan? Is it my drawing limit or is it the book balance which is left after deducting my parked fund. Also, if I convert to 10.15%, will my drawing limit shirnk to new outstanding book balance.

    If I were loose my drawing limit or I cant take out excess money, after then conversion, then it iw not worth it. Does any body has Maxgain loan account and converted their interest rate to new interest rate?

  393. Sudarshan B says:

    Hi Ashal,

    Half of my loan is disbursed . Now for further disbursals whom should I contact . Is it RACPC or the branch. How should I proceed should I go manually to RACPC or mail them to disburse the money ?

  394. Sachin Kulkarni says:

    Hi Ashal,

    I have a question about SBI MAX Gain Home Loan. I have taken total loan of 15,00,000 and my EMI is ~ 15,000 per month. I parked around 5,00,000 surplus amount in the MAX GAIN OD account. So interest would be applied only on 10,00,000 amount. But my EMI remains same. So if I don’t withdraw this surplus 5 lac amount and my EMI remains same, will my loan get paid before the loan tenure?

    If I get some more surplus amount of 10,00,000, is it a good idea to deposit this in MAX GAIN OD account? It will make the surplus amount to 15,00,000 same as full loan amount. What happens if this happens? If the EMI continues, it will be surplus amount more than total loan amount. Does that mean there will be no interest as full principal amount is “paid”? Will SBI close my account saying my loan is paid or will keep it open till the tenure of the loan?

    I know this sounds very foolish in a way that if I have full loan amount available, why should I take the loan? But I have surplus amount as of now for short period of time and planning to spend it in 1-2 years in future. Please let me know. Appreciate your help.

    Thanks,
    Sachin

  395. Rat says:

    Hi Ashal,

    Yesterday I went to the RACPC branch in Banasvadi, Bangalore for documentation work towards my new SBI MG loan. I had applied for 24 lakh loan, but they have made it 24.4 lakh by adding the insurance premium into the loan amount. I insisted that I would pay the premium from my pocket through cheque, but they said it is not possible. This 40K will be paid over a 5-yr term. I was concerned that I need to pay interest for this 40K as well at 10%. They said, to prevent interest payment, transfer the premium amount to the loan insurance account immediately after the premium is deducted. Is this okay ? Or should I go back and insist that I want it to 24lakh loan, and 40K from my pocket ?

  396. Rushil says:

    Hi Ashal,

    I have gone through your this post and find quite a lot of information. I have a query hope you can help in resolving it.
    I am an NRI and recently brought a property in Pune. My current Home Loan is with ICICI bank and rate of interest is 10.25%. My Loan amount is 35Lakhs.
    The issue with ICICI Home Loan is that If I need to do a prepayment there is no online option.
    1. Either I can do it by depositing a cheque in my loan account and for that I need to give authorization letter everytime to the person who is going to deposit on my behalf.
    2. Second method is to do it by calling the customer care where they can transfer fund from my NRI account to my loan account but maximum upto the six month EMI only and the reduced Prinicpal will be effective after 2 months.
    So effectively both the methods are neither straightforward nor efficient.

    What I am thinking is to transfer my loan from Icici to SBI. I quite like the SBI’s MaxGain product and since I can deposit every month amount more than my EMI it is quite useful for me too.

    What my query is:
    1. How cost effective will be my loan transfer from ICICI to SBI?
    2. Is the SBI MaxGain available to NRI?
    3. How cumbersome will be the process of transfer?
    4. Is there any way to reduce the penalty amount that I have to pay to ICICI for preclosing the loan?
    5. What is the current rate of Interest that is offered by SBI on max gain product?

    I know they are quite a lot question, but any help from your side will save lot of mine effort.

    1. Dear RUshil, the cost effectiveness of your loan transfer ‘ll depend upon the fact, how much surplus amount you can park in MaX Gain account, over the period of the loan?

      Yes Max Gain is available to NRIs also.

      As you are out of India, the process may take time.

      You may appoint one family member from your side as representative (under a power of attorney) to sign on your behalf.

      After RBI guidelines, there is no penalty from ICICI.

      The current ROI for more than 30l loan amount is 10.15%.

      Thanks

      Ashal

  397. ABC says:

    Hi Ashal,

    First of all, Thanks a lot for a good informative forum.

    I have HDFC home loan of 23L for tenure of 13 years with ROI as 11.50%. As ROI becoming too high, I am planning to reduce ROI. Need your advice on the same.

    Option 1: Pay conversion fee (Rs 10000 approx) to HDFC and get ROI of 10.25% for remaining term.

    Option 2: Transfer loan to SBI Max gain & get ROI of 10%.

    1) Which option is better?

    2) Does HDFC charge anything if I choose to transfer loan to SBI?

    3) If I choose to go with option 2, what will be total loan processing charge with SBI?
    like, title franking, legal papers or any other document required?

    4) For 0.25% ROI difference currently between HDFC and SBI,
    Can SBI max gain facility be more advantageous for long term perspective?
    If yes, pls explain the calculation.

    Please advice.

    1. Dear ABC,

      1) Which option is better?
      Option of remaining with HDFC is better as by paying just conversion fee, you can save a lot of leg work as well as money etc.

      2) Does HDFC charge anything if I choose to transfer loan to SBI?
      No.

      3) If I choose to go with option 2, what will be total loan processing charge with SBI?
      like, title franking, legal papers or any other document required?
      Basic Loan with HDFC ‘ll be transferred, all other expenses ‘ll be borne by you.

      4) For 0.25% ROI difference currently between HDFC and SBI,
      Can SBI max gain facility be more advantageous for long term perspective?
      If yes, pls explain the calculation.
      Stick with HDFc for such a narrow margin.

      Thanks

      Ashal

      1. ABC says:

        Hi Ashal,

        Pls note, my current ROI is 11.50%, tenure is 13 years, Loan amount is 23L.

        1) Total loan transfer charge to SBI is,
        10000 rs [ valuation, advocate search report, processing fee, mortgare fee]
        + 15000 Property Insurance
        = total 25000.

        For HDFC, conversion fee is 10000 & ROI is 10.25%.

        By paying extra 15000 amount to SBI, I can gain advantage of Max Gain & 10% ROI.
        To add, monthly I can park around 20000 in Max gain account.

        Is it still better to go with HDFC with ROI of 10.25% ?

        2) I inquired with SBI, they say for loan processing taking property insurance is mandatory, which charge around 15000 rs for my case. Is it really mandatory to take property insurance?

        Thanks.

        1. Dear ABC, for the given situation, the difference of ROI is very small at the same time, you w’d have to pay the price for the conversion. yes by parking 20K mly you can bring down your interest outgo.

          Property insurance is compulsory.

          Please take a personal call between SBI & HDFC. In case of HDFC, loan can be repaid & close early but in case of Max Gain, the loan ‘ll run for next 13Y only interest outgo ‘ll be lower.

          thanks

          Ashal

  398. Ram says:

    Dear Ashal Ji

    Can you help on the following query.

    Quote: ”

    Hi All,

    I am DHFL housing loan customer, i have taken home loan at the @ of 12% from DHFL which is ridicules. now after final disbursement and my possession of flat I wanted to shift my loan from DHFL to SBI Max gain but SBI does not consider DHFL as a banking organisation and as per the DHFL is a non-banking firm.

    Now I am in trouble like if which bank I can choose and which other banks has facilities like SBI Max gain accounts if you can guide me i can choose proper bank with proper facilities.

    Please help”

    UnQuote”

    1. Dear Ram,

      STandard Chartered as well as HSBC are also offering max gain like product.

      You may try there.

      thanks

  399. Amaresh says:

    Hi, Is there any tool from SBI where I can download the report of emi paid/interest paid/principal paid/how much interest has been saved because of parking extra money in my loan account?

    1. Dear Amaresh, please download your acct. statement from SBI site in excel format & than calculate manually your interest benefit.

      thanks

      Ashal

  400. Ashish says:

    Here is my Question. I have done partial payment to builder say 40% . Out of the rest 60% left i will be paying 25% and taking loan from SBI for rest 35%.
    1) Should i take up loan first to pay to the builder , before start paying my share to the bulder
    2) Should i start full EMI payment even before taking all the loan amount from bank. I am sure that i wil need to use up all my loan limit cap (that put to be 14.5L by SBI). Right now i have taken 5 L so far? I think i have enough income to just start paying back the full EMI right away.

    Can you tell me which would be the most beneficial for me?

  401. sandi_pesit says:

    Hi Ashal,

    I have some questions:

    1. Today my first disbursement happened. Can I start parking surplus amount from today to get the MG benefits?

    2. How can I transfer to MG OD Account? Can I transfer online from my ICICI salary account to OD account? Can I pay by cheque to my OD account number from my ICICI salary account?

    3. My property cost is 57lac and loan taken is 35lac. My margin mentioned in the loan sanction letter is 38.6% which is 22 lacs. What exactly does margin mean?

    4. Till now I have already paid 18lac to builder. Now on every alternate month till Dec 2013, disbursement of 2.65lac is needed. When do I need to pay the remaining 4 lac?

    5. Out of 57 lac, 3 lac is for registration. Say till the time of registration bank has already disbursed 33.5 lac and I have paid 2.5 lac. At the time of registration I need to make a DD of 3 lac in favour of Registrar. How will I get the remaining 1.5 lac from bank? Will bank give the money to me and I need to make a DD of 3lac? OR Bank will only make the DD of remaining 1.5 lac in favour of Registrar and I need to make another DD of 1.5 lac from my own pocket?

    Thanks in advance!!

    Regards.
    Sandip

    1. Dear Sandi, my reply to you –

      1. Today my first disbursement happened. Can I start parking surplus amount from today to get the MG benefits?
      Yes, but till the final disbursal is not done, you can not withdraw your own money.

      2. How can I transfer to MG OD Account? Can I transfer online from my ICICI salary account to OD account? Can I pay by cheque to my OD account number from my ICICI salary account?
      either by netbanking or cheque, whichever way is favorable to you.

      3. My property cost is 57lac and loan taken is 35lac. My margin mentioned in the loan sanction letter is 38.6% which is 22 lacs. What exactly does margin mean?
      Martgin means the difference of property price to loan amount or in other words, money arranged by you.

      4. Till now I have already paid 18lac to builder. Now on every alternate month till Dec 2013, disbursement of 2.65lac is needed. When do I need to pay the remaining 4 lac?
      As per your mutual understanding with builder, you can pay any time. bank ‘ll disbursal final installment after your 4L Rs. pmt. is over.

      5. Out of 57 lac, 3 lac is for registration. Say till the time of registration bank has already disbursed 33.5 lac and I have paid 2.5 lac. At the time of registration I need to make a DD of 3 lac in favour of Registrar. How will I get the remaining 1.5 lac from bank? Will bank give the money to me and I need to make a DD of 3lac? OR Bank will only make the DD of remaining 1.5 lac in favour of Registrar and I need to make another DD of 1.5 lac from my own pocket?
      You w’d have to arrange for the money from your personal sources at that time & bank ‘ll reimburse the money after mortgage is done.

      Thanks

      Ashal

  402. Ashutosh says:

    Hi ashal,
    I have finalised to go for max gain home loan after going through your expert comments. I was referred to an agent who will facilitate the process. I am doubtful whether to go via agent or direct. My understanding is sbi doesn’t have agents. Have they started this..Pl. Advise.
    Also is it better to go to a branch or direct to racpc for starting the loan process. I understand loans are finally processed by racpc only. I also need to open sb account for loan purpose only. Is it possible from racpc branch? Your early revert will be very helpful…
    Thanks..

    1. Dear Ashutosh, Please use this SBI Loan councilor with out any doubt. You w’d not need to pay anything extra from your pocket & SBI ‘ll pay him directly. all the leg work ‘ll be done by this agent.

      Please open a SB acct. in the branch where you intend to aply for your home loan.

      Thanks

      Ashal

  403. ganeshkrishnan says:

    Hi Ashal ,

    I have read your replies on SBI Max gain and I feel you are doing wonderful job in helping the public.

    I have applied for SBI Max gain loan account and waiting for sanction.The legal feedback is positive and valuation would be completed next week.

    I did a excel calculation on various tenure (15-25 years) and found 15 years as more beneficial for me.

    My project cost is 85 Lakhs.
    My net take home is 83800 Rs.
    bonus amount is 5800 (70k per annum)
    Proposed rent for new house – indicative amount is 10K.

    Total net income per month is 99600.

    I would need a loan amount of 55 lakhs to 60 Lakhs. I am trying to reduce the tenure period.

    ROI now is 10.15%.

    I want a loan of 55 lakhs for 15 years if not then 55 lakhs for 17 years.

    Bank manager is saying loan of 60 lakhs for 25 years would ensure the loan doesn’t get rejected.

    Can you pls help me what EMI/net income percent the Bank would consider normally?

    EMI for 55 lakhs for 15 years = 1084*55 = 59620 (59.8 % of my net income)
    EMi for 55 lakhs for 17 years = 1031*55 = 56705 (56.9 % of my net income )
    EMi for 60 lakhs for 25 years = 919.29*60 = 55157.77 ( 55.37 % of my net income )

    Pls suggest me whether I would be eligible for 15 years or 17 yrs tenure loan.

    1. Nilesh says:

      Hi Ganesh,

      As far as I know, SBI considers 65% of NMI (net monthly income) as max EMI.

      But they have a Yuva scheme where in they provide for 20% additional EMI to young adults with good education and promising career prospects.

      Ex. If your NMI is 1Lac normally max EMI possible will be 65,000. In case of Yuva scheme it will be 65,000*120% = 78,000.

      Given the fact that you can take Max Gain OD account and repay additional amount as and when you want or every month basis, I would go for a longer tenure and minimize mandatory EMI and repay earlier later on. Provides you flexibility in case of any eventuality. Although, this is my personal opinion and is suitable for myself. You may consider this option if it suits you.

    2. Dear Ganesh, here i’m trying to answer your query.

      Please opt for a 25Y home loan as of now, once loan sanction is there, ask for EMI of 20Y or 17Y or 15Y as per your cashflow position. At the start it’s advisable to keep lower EMI duw to longer loan term.

      thanks

      Ashal

  404. rahult says:

    THANKS A LOT ASHAL. I WILL APPROACH RACPC CENTER FOR THIS AND WILL CONTACT YOU IF ANY

  405. rahult says:

    dear AShal,

    recently i applied for home loan in SBI. accordingly i got SBI MAX Gain. my only wish is i want to pay additional fixed 5000 Rs. with my EMI permantly without recovering it back. The loan is not fully disbursed to the Developer, still 581000 is in my OD account. 700000 has been paid to the Developer.

    is is possible to add some extra(5000) amount to my loan EMI(12575) from now onwards my ??first EMI is DATED on 5th Nov 2012 PLEASE ANSWER…:-)

    1. Dear Rahul, you have 2 options with you.

      1. contact SBI to increase your EMI by 5K Rs. permanently

      2. Let the EMI remain as it is & you transfer manually 5K or more amount on monthly basis.

      Take your own pick, whichever is favorable to you.

      Thanks

      Ashal

  406. Amaresh says:

    Dear Ashal,

    I have three questions, please help..

    Builder demanded for 48 lacs and we (bank + myself) has given that in ratio (60%:40%). SBI has released 29 lacs and I have given 19 lacs. Property possession is due in dec 2012 . So my question is:
    1. If I put some amount in Max gain account will that be considered in interest calculation from today? I understand that I cannot withdraw that amount until I get the possession.

    2. The way I see max gain is just a bucket where I park my money for one day and get 10.15% (the floating rate on which loan is operating) interest at the end of the day ?

    3. Next demand coming is for 10 lacs where SBI will ask me to pay 4 Lacs(40%) to builder so that they can release their share 6 lacs (60%). So in that case, consider I have accumulated 4 Lacs in my Max gain account. Can SBI tak out this 4 lacs and add 6 lacs and then satisfy the demand of 10 lacs ?

    Thanks in advance,
    Amaresh

    1. Dear Amaresh, here are the answers for your queries.

      1. If I put some amount in Max gain account will that be considered in interest calculation from today? I understand that I cannot withdraw that amount until I get the possession.
      Yes, the amount parked by you in mG acct. ‘ll be considered as repayment & accordingly the interest outgo ‘ll come down.

      2. The way I see max gain is just a bucket where I park my money for one day and get 10.15% (the floating rate on which loan is operating) interest at the end of the day ?
      In a sense your understanding is correct. Actually as you are parking your amount into MG acct. you are not paying 10.15% ROI on that much amount, so indirectly you are earning 10.15%

      3. Next demand coming is for 10 lacs where SBI will ask me to pay 4 Lacs(40%) to builder so that they can release their share 6 lacs (60%). So in that case, consider I have accumulated 4 Lacs in my Max gain account. Can SBI tak out this 4 lacs and add 6 lacs and then satisfy the demand of 10 lacs ?
      No, SBI ‘ll not consider the parked 4L Rs. for your contribution & you w’d have to arrange for your share of 4L Rs.

      Thanks

      Ashal

  407. Ram says:

    Mr. Ashal Jaji

    Is it advisable to swap the housing loan from IDBI bank to SBI Max gain?

    IDBI is charging 10.75% floating interest rate; where ass SBI is 10.25%.
    No pre-closure charges, no part payment charges for IDBI housing loan.

    Kindly advise.
    Regards, Ram

    1. Dear Ram, Max Gain is beneficial only if you do have capacity to generate surplus balance over the period of time in MG account. Merely paying the regular EMIs ‘ll not help much in case of MG.

      So take your pick from the above.

      Thanks

      Ashal

      1. Ram says:

        Ashal Ji

        Yes. I do have about 3 Lakh surplus money lying in savings accounts. I hope this may be beneficial.

        My actual query is: “Is it advisable to swap the loan from IDBI to SBI Max gain?
        IDBI is charging 10.75% and SBI is charging 10.25%”.

        Regards, Ram

        1. Dear Ram, please go for switch over to SBI MG.

          Thanks

          Ashal

  408. Ashish says:

    What do you mean by park amount in OD account ? Can anyone explain.

    Also how does the repayment work? I have to deposit the EMI amount in the OD account?

    I am total newbie in loan/mortgage . Please correct me here.

    1. Dear Ashish, the EMI ‘ll be deducted from a SB account. Parking surplus funds into OD account means – depositing your surplus money into OD account to bring down the interest liability towards the loan.

      Thanks

      Ashal

  409. jegan r says:

    Hi Ashal,

    I need a help on this.
    I got a 2nd hand house offer – good location House which is constructed in Housing Board allocated by government.But all of the owners are allocated with individual ownership.

    Its in very good location with good water facility. But its more that 10 year old house.But i am not looking for house.My AIM is to get the land in that area only.

    SO i am planning to buy that house and destroy the old house and planning to construct house in that.

    Whether SBI will give loan for this old house ? Bcoz i am planning to construct new house ryt ?

    I heard some loan is there from SBI where SBI will give loan for purchasing Land but on one condition that u need to start construction within 2 years in that land.But for that construction also they will give loan again..Whether my case will come under this ?

    Banks will be ready to give loan for houses more than 10 years?

    1. Dear Jegan R,

      Please contact local SBI Branch – I think the loan deal you want to go for is possible but SBI people ‘ll make a final call.

      Thanks

      Ashal

  410. amitbhole says:

    Hi Ashal,
    I talked to two different SBi executives and branch managers from different branches. They gave me the same information. if I deposit surplus money in MG account then it will have effect on Pre-EMi. it will reduce if disbursement amount is not increased during that period.
    They say rules are changed. You can check from your side also if rules are changed and you are not aware of.

    Amit Bhole

    1. Dear Amitbhole, I’m not an SBI staff member, so please follow the info provided to you by SBI people.

      Thanks

      Ashal

  411. Sudarshan B says:

    Hi Ashal,

    Will I get tax benefits on Principal part during the moratorium period ? I am paying full EMI from day 1. And my loan is not fully disbursed. And also I dont have the possession of the property.

    1. Dear Sudarshan, yes if you are paying back principal in your not fully disbursed home loan, you can still claim tax benefit under section 80C within the over all limit of 1L Rs.

      Thanks

      Ashal

      1. amitbhole says:

        Hi Ashal,
        As per my knowledge to claim for the principle amount in 80C we need possession certificate. Am I correct?

        Amit Bhole

        1. Dear Amitbhole, to claim interest benefit under section 24(b), possession of house is pre condition. For Principal repayment benefit under section 80C, merely repayment of loan is the condition & possession is not required at all.

          Please read both sections of IT Act at official website of Income Tax.

          http://www.incometaxindia.gov.in

          Thanks

          Ashal

          1. Viswa says:

            Ashal,
            I think possession of house is pre condition even for 80C claiming Principal repayment benefit.

            Can somebody else pls confirm?

            Thanks,
            Viswa

          2. Dear Viswa, please check the official website of Income Tax of India.

            Thanks

            Ashal

  412. Vikash Singh says:

    Hi Ashal,
    I have taken SBI maxgain home loan of 39 lacs for 20years at 10.15. My loan is approved on 14 Oct’2012. And same time Bank release 1st installment of Rs 18.6 lacs to builder. Below is my query:-

    1) the processing fee of 6500 is deduction from my loan account itself. why? is it the way the follow? it should be from my SBI saving account. it showing as:
    Book Balance -18,66,500.00
    Available Balance 20,33,500.00
    Limit 39,00,000.00

    2) Should I transfer Rs 6500 from saving to loan account?

    3) My monthly EMI calculated as 38025 and I opt for full EMI will be deducted on 10th every month. Can you please explain and show me the further calculation with detail that how much money will be deducted in next 3 month (assuming no money will be released to builder as of now and I deposit only Rs 10,000 on 1st dec 2012)

    thanks in advance.

    1. Dear Vikash, I’m trying to answer your query.

      1) the processing fee of 6500 is deduction from my loan account itself. why? is it the way the follow? it should be from my SBI saving account. it showing as:
      Book Balance -18,66,500.00
      Available Balance 20,33,500.00
      Limit 39,00,000.00
      Had you provided any cheque of your SB account for the payment of Processing Fee? Ifm not, the deduction of processing fee from loan balance is OK.

      2) Should I transfer Rs 6500 from saving to loan account?
      You may transfer these 6500 Rs. to make up the loan amount deducted towards processing fee & you ‘ll also be able to save the interest outgo for this 6500 Rs. amount.

      3) My monthly EMI calculated as 38025 and I opt for full EMI will be deducted on 10th every month. Can you please explain and show me the further calculation with detail that how much money will be deducted in next 3 month (assuming no money will be released to builder as of now and I deposit only Rs 10,000 on 1st dec 2012)
      Please confirm from which SB account you have opted for EMI deduction? If the EMI is to be deducted from the SB account you are mentioning, please keep EMI amount ready in this SB acct. on the date of EMI.

      Thanks

      Ashal

      1. Vikash Singh says:

        Dear Ashal,

        for question
        3) My monthly EMI calculated as 38025 and I opt for full EMI will be deducted on 10th every month. Can you please explain and show me the further calculation with detail that how much money will be deducted in next 3 month (assuming no money will be released to builder as of now and I deposit only Rs 10,000 on 1st dec 2012)
        Please confirm from which SB account you have opted for EMI deduction? If the EMI is to be deducted from the SB account you are mentioning, please keep EMI amount ready in this SB acct. on the date of EMI.

        EMI deduction will happen from my HDFC salary account. Please show the calculation for next 3 month then it will clear for me how maxgain works.

        1. Dear Vikash, here is the answer.

          for question
          3) My monthly EMI calculated as 38025 and I opt for full EMI will be deducted on 10th every month. Can you please explain and show me the further calculation with detail that how much money will be deducted in next 3 month (assuming no money will be released to builder as of now and I deposit only Rs 10,000 on 1st dec 2012)
          Please confirm from which SB account you have opted for EMI deduction? If the EMI is to be deducted from the SB account you are mentioning, please keep EMI amount ready in this SB acct. on the date of EMI.
          EMI deduction will happen from my HDFC salary account. Please show the calculation for next 3 month then it will clear for me how maxgain works.
          On 10th Nov, the EMI amount ‘ll be deducted from your HDFC salary account & ‘ll be deposited to MG account. Here you ‘ll notice on 10th of nov. that available balance as well as booked balance has been changed. Actual interest ‘ll be charged only on 30th Nov.

          Regarding the effect of MG & parking surplus in it, please wait for final disbursal as during disbursal period, you may find it tough to understand how things are moving.

          Thanks

          Ashal

  413. Aprajita singh says:

    Hello Sir
    actully loan was taken by my uncle. He asked me this question. I will have to ask about ROI. Sir what is exactly ROI? and is it possible that bank can increased loan tenure without customer permission. sir i want to know in detail about home loan. I have heard that EMI is a combination of principal and interest then how it is possible that after paying EMI principal is still same

    1. Dear Aprajita, yes the EMI consists of 2 parts of principal & interest but do remember, due to change in Rate of interest, the Interest part of EMI may change. From your original query, it seems that your uncle’s ROI is running very high then the original ROI.

      Please provide more details.

      Thanks

      Ashal

  414. Nilesh says:

    Dear Ashal,

    Thanks a lot for sharing information related to SBI Max Gain scheme.

    I purchased a flat in Navi Mumbai for 1.3cr in full white and applied for a loan of 92 lacs by being impressed after reading all the info shared by you in spite of concerns mentioned by my friends regarding getting a home loan from a PSU bank. (Heard stories saying it can take 2/3 months, etc)

    I applied at the regional office of Sanpada where Mr. Deepak Joshi helped me a lot in getting the procedure done at lighting fast speed. I submitted all the documents required for the same on Tuesday, 9th Oct and got the disbursal cheque from SBI on Wednesday, 17th Oct.

    The entire procedure was very customer friendly and was a very good experience from a Govt bank.

    Really thankful to you for the awareness you are spreading regarding the product.

    – Nilesh

    1. Nilesh says:

      Dear Ashal,

      I want to activate transaction rights on the Max Gain OD account through my SB internet banking id. I have taken a join loan with my wife (me being primary applicant).

      When she logs in to her SB account she can see the link to OD account and can transfer money to OD from SB but not otherwise as you have already clarified above.

      When I log in to my SB account it does not show the OD account at all. My OD account and SB account are in different branches. Now to request the linkage of OD account with my SB account, which branch do I need to visit – my OD a/c branch or the SB a/c branch?

      Also, I have not got the OD account kit with cheque book/ATM yet. To get that which branch do I need to visit – I presume this should be the OD account branch.

      1. Dear Nilesh, as the home loan is a joint account one, please apply for a separate transaction rights for the same to the branch where the account is maintained.

        Same for the Cheque Book & ATN Card.

        Thanks

        Ashal

        1. Nilesh says:

          Dear Ashal,

          Thanks for your help. I got the transaction rights for both me and my wife on the OD account.

          I have another question. Please help me with this one too.

          How does the OD account work in case of withdrawals.

          I assume the available balance is the max amount that one can withdraw at any given point in time, right?

          On a monthly basis, the EMI will be deposited to the OD account and interest will be debited. Which creates a surplus every month which is equal to EMI – Interest. This will get added with any extra deposits I have made.

          So just for example my loan is 1cr with EMI of 1lac pm and interest is reducing in the range of 90k to 85k in first one year and I have not deposited any extra amount in the OD account. At the end of the year I will have approx about 1.1lacs as available balance and book balance will be 98.9lacs.

          My question is – Can I withdraw this entire 1.1lacs and let the book balance be 1cr again?

          In that case next month on wards, interest debited will again go back to 90k and will keep on reducing to 85k after first year.

          This facility is little dangerous if not used judiciously as one has the leeway to withdraw whatever principal he has already repaid over a click of a button and take the account back to day 0 of loan disbursal.

  415. Aprajita singh says:

    Dear Ashal sir
    I have taken a home loan of 500000 in 2007 from ICICI Bank. I have been regularly paying EMI since 2007. Why my outstanding balance of loan amount is still same? and bank has increased my loan tenure without my permission
    Please reply what should i do?

    1. Dear Aprajita Singh, May I know your current ROI with ICICI Bank? It seems after getting your loan, you have never ever checked for your running ROI. Please do it now & inform me here.

      Thanks

      Ashal

  416. amitbhole says:

    Hi,
    To access Max gain account online, do we need SBI savings account?

    1. Dear Amitbhole, to get netbanking rights for your Max Gain account, having a SB account of SBI is not a pre condition. You may have netbanking on MG account even with out SB account.

      Thanks

      Ashal

      1. amitbhole says:

        Thank you for your guidance.
        I haev activated net banking on my VD account. Can you tell me more details about the fields and values displayed against them? Also can we get information on what wil be the pre-emi for this month? and date on which Pre-EMi/EMI is calculated. Example, if Pre-EMI /EMI caculation will be performed on last day of the month and I deposit surplus amount on 25 th of every month, then how the intrest will be calculated and can we get this Pre-EMi for this month on sbi netbanking site?

        Thanks in advance
        Amit Bhole

        1. Dear Amitbhole, here are the answers for your queries.

          Can you tell me more details about the fields and values displayed against them?
          Can you elaborate more on this or can provide some example or exact info of your account that you want to know?

          Also can we get information on what wil be the pre-emi for this month?
          Please check your Loan agreement, the date of PRE EMI as well as EMI is already there.

          Instead of answering your query for parking surplus amount & then getting the benefit of interest, I w’d ask you to wait for next 23 months to see how this OD account works?

          Thanks

          Ashal

          1. amitbhole says:

            Hi Anshal,
            field and amt details are as follows:
            Book Balance: -1110000
            Available Balance: 2090000
            Limit: 3200000
            Uncleared Balance: 0.00
            Drawing Power: 3200000
            Lien Amount: 0.00
            I would like to know like what values these fields show and how they are calculated.

            I know the date for EMI/Pre-EMi its 10th of every month. My Pre-EMi will start from Nov 2012.

            Regarding the depositing the suplus amount:
            When I asked SBI POC about adopting the full EMi option. He suggested me to go for Pre-EMi and deposit amount equal to diff between EMi and Pre-EMI into OD account monthly. which will reduce the pre-emi for next month(considering no disbursement till next calculations). So I would like to know the Pre-EMi for this month, by following this process, by the time my full loan disbursement is done I will have good amount in OD account. If I adopt for Full EMi it will reduce my drawing power, I will have to get that increased before last loan amount disbursment to builder. Pre-EMi is not visible on netbanking site. Is this available on net banking site?
            I guess now you will understand Why I asked for date Pre-EMi/EMI is calculated to deposit surplus amount in OD account.

            Thanks in advance
            Amit Bhole

          2. Dear Amitbhole, here are the answers for your queries.

            Field and amt details are as follows:
            Book Balance: -1110000 –
            as on date it’s the loan amount released to builder.

            Available Balance: 2090000
            It’s the available loan amount to be disbursed in future

            Limit: 3200000
            It’s the total loan amount sanctioned to you.

            Uncleared Balance: 0.00
            If you deposit any cheque to deposit any amount into MG account, the uncleared balance ‘ll show that amount here.

            Drawing Power: 3200000
            It’s the loan amount sanctioned to you

            Lien Amount: 0.00
            If you opt for any lien transaction like applying shares in an IPO or FPO through ASBA, the amount against your application ‘ll be blocked & you can see that lien amount here.

            I know the date for EMI/Pre-EMi its 10th of every month. My Pre-EMi will start from Nov 2012.
            Regarding the depositing the suplus amount:
            When I asked SBI POC about adopting the full EMi option. He suggested me to go for Pre-EMi and deposit amount equal to diff between EMi and Pre-EMI into OD account monthly. which will reduce the pre-emi for next month(considering no disbursement till next calculations). So I would like to know the Pre-EMi for this month, by following this process, by the time my full loan disbursement is done I will have good amount in OD account. If I adopt for Full EMi it will reduce my drawing power, I will have to get that increased before last loan amount disbursment to builder. Pre-EMi is not visible on netbanking site. Is this available on net banking site?
            Pre EMI amount ‘ll not change, based upon your surplus parked in the MG account. It seems the person who has provided you the info is either not know the rules/operation of MG or simply make you fool.

            Instead of opting for PRE-EMI & depositing excess amount manually, it’s advisable to go for full EMI from day one & thus let the system work on auto mode for your own benefit.

            Thanks

            Ashal

      2. amitbhole says:

        One more question i missed.
        My current spread is 0.4% above 9.75% base rate. Does SBI allows us to buy this spread? IF yes what are the charges and other conditions?

        If I adopt for Full EMI at the start then does it reduces my drawing limit?

        Amit bhole

        1. Dear Amitbhole,

          One more question i missed.
          My current spread is 0.4% above 9.75% base rate. Does SBI allows us to buy this spread?
          Yes SBI allows to lower down the spread but the one you have purchased is the lowest as on date so you can not go below from this point of your spread as of now.

          IF yes what are the charges and other conditions?
          The charges may be changed by SBI from time to time. So quoting any one at this point ‘ll not be right. Please check at the time of your need, in case you want to go for a lower spread if possible at all.

          If I adopt for Full EMI at the start then does it reduces my drawing limit?
          Yes, it ‘ll reduce. Reduction in drawing limit means you are repaying your loan.

          Thanks

          Ashal

  417. pan says:

    Hi Ashal,
    Thanks for the answers. Regarding query 2 i need more information:

    1) As per information i can choose any account for payment. Got it.
    Now what i want to understand is the Income Tax exemption.
    I have 2 scenarios:
    a) My wife transfer her 50% to my account every month before the EMI date with “proper comment” during transfer. As told by Loan processing officer, this way she can show the proof.
    But in this case she need to keep sufficient balance in her account for such ECS/SI, and our joint account is of no use, where also we might be keeping balance.
    Want your opinion.

    b) We both schedule the EMI payment from our joint SBI Account.
    In this case we both can jointly maintained sufficient balance say for next 6-10months.
    So, every month need to check for balance, and dont need to maintain large balance in both accounts.
    Want to know Tax exemption criterion for this case. Do still she and me both need to transfer amount every month from our respective accounts, to show proof of contribution OR by default, any amount for EMI from Joint account is considered as 50:50 contribution for TAX exemption, irrespective whether we both are depositing REGULARLY in this account per month.

    1. Dear Pan, Here I’m trying to answer your queries.

      a) My wife transfer her 50% to my account every month before the EMI date with “proper comment” during transfer. As told by Loan processing officer, this way she can show the proof.
      But in this case she need to keep sufficient balance in her account for such ECS/SI, and our joint account is of no use, where also we might be keeping balance.
      Want your opinion.
      No need to go for mly transfer. The transfer can be in lump sum also say total EMI amount for 12 months is 2.4L Rs. so in any given FY, your wife need to put in total 1.2L Rs. (her 50%) either in one lump sum or in multiple tranches, as per her cash flow.

      b) We both schedule the EMI payment from our joint SBI Account.
      In this case we both can jointly maintained sufficient balance say for next 6-10months.
      So, every month need to check for balance, and dont need to maintain large balance in both accounts.
      Want to know Tax exemption criterion for this case. Do still she and me both need to transfer amount every month from our respective accounts, to show proof of contribution OR by default, any amount for EMI from Joint account is considered as 50:50 contribution for TAX exemption, irrespective whether we both are depositing REGULARLY in this account per month.
      Please check my reply given for case a above, Same thing can be used in this joint account also.

      Thanks

      Ashal

  418. pan says:

    Hi,
    I recently applied for SBI Home loan. I have some queries:

    1) The Loan officer at RACPC told me not to deposit any amount till Max Gain is activated by which he meant till Full disbursement is happened. When i told him that i have seen people doing so before full disbursement, he was telling that it is not supposed to do, and something he was telling that “need to withdraw full amount at time of registration” which i could not understand. Please let me know about it.

    2) I have applied for Joint loan with my wife, who is also working and will claim the Tax exemption. The loan officer suggested me to avail benefit, “my wife should transfer half the amount of EMI to my salary account before the EMI date with comment that it is for EMI, and then on date, the amount will be deducted from my salary account”

    I have already opened a Joint SBI saving account (linked to loan acc) with my wife, thinking that we can use this for EMi payement.
    My question is that can we avoid this process of her transfering amount to my salary account to avail Tax benefit?
    Is it possible that if we set Standing instruction in our JOINT SBI account, to transfer FULL EMI amount to my salay acc beforme EMI date, then it is by default consider as both of us paying 50:50 contribution to EMI?

    3) Among 5/10/15 which is best date for ECS to utilize full extent of max gain.

    1. Dear Pan, here are the answers for your queries.

      1) The Loan officer at RACPC told me not to deposit any amount till Max Gain is activated by which he meant till Full disbursement is happened. When i told him that i have seen people doing so before full disbursement, he was telling that it is not supposed to do, and something he was telling that “need to withdraw full amount at time of registration” which i could not understand. Please let me know about it.
      One can deposit in MG account in between but can not withdraw till the final disbursal is done. What this SBI person is telling is not truth & many people on this forum are parking surplus in MG acct. which they do not need till final disbursal.

      2) I have applied for Joint loan with my wife, who is also working and will claim the Tax exemption. The loan officer suggested me to avail benefit, “my wife should transfer half the amount of EMI to my salary account before the EMI date with comment that it is for EMI, and then on date, the amount will be deducted from my salary account”
      I have already opened a Joint SBI saving account (linked to loan acc) with my wife, thinking that we can use this for EMi payement.
      My question is that can we avoid this process of her transfering amount to my salary account to avail Tax benefit?
      Is it possible that if we set Standing instruction in our JOINT SBI account, to transfer FULL EMI amount to my salay acc beforme EMI date, then it is by default consider as both of us paying 50:50 contribution to EMI?
      From which acct. you & your wife wants to pay EMI is your choice & your bank can not force you to pay from X acct. or Y account. Please stick to your joint account & if need arise, contact the AGM of your RACPC & you ‘ll get the solution for sure.

      3) Among 5/10/15 which is best date for ECS to utilize full extent of max gain.
      Every date is good. As long as you are parking surplus into MG account. Please opt for full EMI from day one, if your cash flow permits.

      Thanks

      Ashal

      1. Sudarshan B says:

        Hi Ashal,

        Will I get tax benefits for the moratorium period EMI ?

        If so, then is it on both the Prinical and Interest components?

        My loan is not fully disbursed.

        1. Dear Sudarshan, During moratorium period, you ‘ll not get tax benefit on interest part but once the possession of your house is with you you can claim those unclaimed interest amounts of prev. years in 5 equal installments. Starting from the FY of possession.

          For principal part, the benefit ‘ll be there from the date you start repaying your home loan, no matter possession of your house is with you or not.

          Thanks

          Ashal

  419. anurag3003 says:

    Hi Ashal,

    I have taken SBI home loan (MG) of 23.25 L (ROI 10%- Tenure20 years). I paid SBI Rs 34,206 for property insurance. Could you please tell me if can claim the same under 80 C.

    Also I paid Rs 32500 (stamp duty )and Rs 30000(registration) in sep,2012 . Can this also be claimed under 80 C.

    Regards,
    Anurag Rastogi

    1. Dear Anurag, the property insurance is not available for tax benefit under 80C.

      Yes, Stamp Duty & Registration charges in the year of actual expenses can be claimed under section 80C.

      Thanks

      Ashal

  420. amit says:

    Hi Ashal, Manish and Experts,

    I have applied for a 15L loan under SBI MAXGAIN for 5 years @ ROI 10%.

    The bank informed me that there are preclosure charges, if I opt for pre closure before 3 years. The pre closure penalty is 2% of the amount used to pre close the loan.

    1) I wanted to know if this is true as I was under the impression that SBI has no pre closure charges on home loans.

    2) Also, if I use max gain facility, park surplus funds in it and before 3 years my OD has an amount equal to my outstanding loan amount.

    a) Then if I ask the bank to preclose the loan by using the excess amount in my OD, will I be charged a 2% penalty?
    b) If I do not preclose the loan thinking that I need liquidity, then what happens to the EMI that I’ll keep paying? (the reason I’m asking is that since my OD amount is equal to my outstanding loan amount, I should be charged no interest.)

    Thanks all in advance!!

    1. Dear Amit, here are the answers for your queries.

      1) I wanted to know if this is true as I was under the impression that SBI has no pre closure charges on home loans.
      As per RBI guidelines, there is no preclosure penalty. Whoever has told you is either ignorant or just not providing you the real facts.

      2) Also, if I use max gain facility, park surplus funds in it and before 3 years my OD has an amount equal to my outstanding loan amount.
      a) Then if I ask the bank to preclose the loan by using the excess amount in my OD, will I be charged a 2% penalty?
      No, please read my answer 1 above.
      b) If I do not preclose the loan thinking that I need liquidity, then what happens to the EMI that I’ll keep paying? (the reason I’m asking is that since my OD amount is equal to my outstanding loan amount, I should be charged no interest.)
      As the parked surplus amount is equal to loan balance, the interest outgo ‘ll be zero but EMI ‘ll continue. The principal part of EMI ‘ll be adjusted as usual towards loan balance & the interest part of EMI ‘ll remain available as surplus in Max Gain account.

      Thanks

      Ashal

  421. Gayathri Venkatesh says:

    Hi
    I have Home loan with Bank of Maharashtra,details below:
    Loan Amount: 30 Lakhs
    Loan sanction date: 30/03/2011
    Interenst Rate : 11 % (Floating, this is the current rate)
    Outstanding as on date:25,24,363
    Interest on First Year : 3,24,256
    Interest on Second year (till date) : 1,49,563
    Question:
    1. Can i transfer this loan to SBI Max gain is that an better option?
    2. What are the charges i need to pay in Bank of Maharashtra?
    3. I also made a Mortgage registration in the name of Bank of Maharashtra. Will this affect the transfer of loan. I paid almost 30000 for this registration.
    4. What are the charges i need to pay in Bank of Maharashtra?
    5. Me and my husband are working, does this transfer process demands more leave to be taken?
    thanks in advance.

    1. Mangesh says:

      Hi Ashal,
      I have some queries related to my SBI Maxgain Home Loan.
      Below are the loan details:
      1. Loan Amount – 19,00,000/-
      2. Loan Agreement – July 2012
      3. Morotorium period – 0
      4. Possession – In Jul 2014
      5. First Disbursement – Aug 2012

      Queries:
      When I log-in to the loan amount, I see the total limit = 18,91,000/- and Drawing Power = 18,91,000/-.

      So why is there difference of 9,000/- in the total limit. And how is this calculated?

      1. Dear Msngesh, as in your case the moratorium period is zero & you are paying EMI & these EMIs are reducing your loan balance. That’s it.

        Thanks

        Ashal

    2. Dear Gayathri,, here are the answers for your queries.

      1. Can i transfer this loan to SBI Max gain is that an better option?
      Yes you can transfer but is it better or not should be checked upon merits, not in isolation.

      2. What are the charges i need to pay in Bank of Maharashtra?
      No charges in BoM but yes SBI may levy processing fee as well as remortgage of property which means more charges for your

      3. I also made a Mortgage registration in the name of Bank of Maharashtra. Will this affect the transfer of loan. I paid almost 30000 for this registration.
      If you opt to transfer your loan to sBI, the old mortgage ‘ll be cancelled & a new mortgage ‘ll be created in the name of SBI.

      4. What are the charges i need to pay in Bank of Maharashtra?
      No charges in BoM now. Prepayment penalty is not applicable any more.

      5. Me and my husband are working, does this transfer process demands more leave to be taken? Yes, you w’d have to take some days’ leave to complete the process.

      In my personal opinion, instead of switching to Max Gain, please ask BoM & get your loan rate reduced there itself by paying a conversion fee, if you do have an option with BoM.

      Thanks

      Ashal

  422. Mithun Patil says:

    interest rate was 10.5 and not 10.75

    1. Vikash Singh says:

      Hi,
      I have some query. My Home loan is just approved for 39L for 20 years. I will get possession in dec 2013 + 3 month grace period.

      1) Which option should I go.. Pre-EMI or Full EMI?
      2) As I heard ( may be wrong)…in Pre-EMI, money is disbursed by bank in regular interval when particular phase comes. And in Full EMI, full amount is disbursed to builder. Is it right?
      3) is it mandatory that monthly EMI (ECS debit) is from SBI account only? Can I give my salary account for ECS debit which is in HDFC?

      thanks

      1. Dear Vikash, here are the answers for your query.

        1) Which option should I go.. Pre-EMI or Full EMI?
        Full EMI from day one if your cashflow permits.

        2) As I heard ( may be wrong)…in Pre-EMI, money is disbursed by bank in regular interval when particular phase comes. And in Full EMI, full amount is disbursed to builder. Is it right?
        No, what you are telling is not truth. Loan ‘ll be disbursed only under CLP – Construction linked payment method, no matter you are paying full EMI or part EMI.

        3) is it mandatory that monthly EMI (ECS debit) is from SBI account only? Can I give my salary account for ECS debit which is in HDFC?
        You can give any account for ECS debit of EMI, but it’s advisable to give ECS from SBI SB account, even if it’s not your salary account.

        Thanks

        Ashal

  423. Mithun Patil says:

    Hi,
    I have taken SBI home loan on Nov 2011. Loan amount 28.5 lacs and tenure 20 years with the interest rate 10.75 % (floating). They told me that I have to pay 28505 Rs EMI for this loan, but when I checked the max gain excel sheet calculator then I found that max gain calculator says that I have to pay Rs 28,453.83 as EMI amount for 28.5 Lacs loan with ROI 10.75 and tenure 20 years.
    Am I paying more EMI that actual? I approached bank but the executive told me that you have to pay 28505 Rs as EMI. When I argued him and asked him about max gain calculator, he said that he is not aware of that and he stopped entertaining my questions.
    1. Am I paying more EMI that actual?
    2. What is the EMI for 28.5 lacs for 20 yrs with 10.75 % ROI assuming that there is full payment done?

    1. Mithun Patil says:

      interest rate was 10.5 % and not 10.75%

    2. Dear Mithun, the calculated EMI is indeed 28454 Rs. For this difference of 51 Rs. please do not bother as this extra money ‘ll go for principal repayment only & SBI can not take away anything extra from you.

      Thanks

      Ashal

  424. anurag3003 says:

    Ashal,

    I have taken home loan(23.25 L) from SBI (maxgain- 10% ROI) on 28th Sep,2012 and my first EMI has been deducted (from sbi saving account) on 5th Oct,2012. OD account is linked to SB account.I want to check online the provisional home loan certificate to see how much interest and principal would be deducted in this financial year but when i go to enquiries tab and select the Home Loan Int. certificate , it says you do not have any housing loan accounts.

    Where can i get the Home loan Int certificate. Would it be visible after my first emi is deducted?

    Also, Till Aug,2012 I was having ICICI home loan and i closed that home loan last month and sold off my property also and in Sep,2012 i bought a new property(ready possession) for which i have taken home loan from SBI. Now for income tax benefit can i change the property details in tax declaration in the middle of the financial year and get the tax benefit of new property which i bought just now for rest of the year.

    At the time of filing the income tax return, do i need to submit both interest certificate (ICiCI and SBI) as actual proofs.

    Please let me know in case you need more information.

    1. Dear Anurag, for Max Gain home loan you can not generate provisional interest certificate from netbanking. Please contact branch to get the same.

      Yes you can notify regarding sell of old house & purchase of new house to claim income tax benefit on interest part on both loans.

      Thanks

      Ashal

      1. JayaprakashReddy says:

        Hi Ashal,

        Want to pull out some information from your amazing MaxGain knowledge base. Please help me with this query if you have got any idea about it.

        I’ve maxgain OD account and literally using it for all cash transactions through netbanking hence, a lot of withdrawal and deposit transactions are recorded in my OD account. Now, when I asked for provisional certificates, SBI branch staff only provided me with interest certificate. When I asked them about the principle provisional certificate they said there are loads of transactions in my account and they are not able to calculate principle amount out of it.

        They have calculated interest amount based on the description of interest debit transaction as it says ‘Debit interest’ and that happens exactly on the last day of the month. They have put the sum of interest debit as interest paid till date. For future interest payments, they have simply took the average of interest paid so far and estimated it for remaining months. I think this calculation is completely wrong.

        Another reason which they gave is there is no EMI amount being credited to this account hence they are not able to guess principle amount. I was wondering why they can’t calculate it based on the EMI amount specified in the loan document? I don’t have any standing instruction or ECS setup for payment of EMI for this loan account, as I’m always keeping enough surplus amount in this OD account. On 5th of every month, loan drawing power reduces by principle part of EMI amount and also available balance amount reduces. I’ve been taking a snapshot of loan account summary in netbanking and keeping a note of how much principle deducted from available balance. I told them I’ll provide those numbers and then they said they will try to calculate based on that information.

        But, I’m still not clear why they are not able to calculate principle amount based on the EMI. I read some of your answers and you said principle part in EMI remains same as per the amortization schedule.

        Can you through some light on this issue? How can I get this principle provisional certificate? Not sure whether visiting RACPC will help solving this issue.

        Sorry for the lengthy explanation wanted to make sure you’ll have all the information to answer my question.

        Thanks in advance,
        Jayaprakash.

        1. ashalanshu says:

          Dear Jayaprakash, calculation of principal repayment is very easy. check the Drawing Power on 4th April and then 6th March in every FY. The difference the 2 is your repaid principal amount for that FY.

          Even for any interim period, you can get the principal amount from the above calculation.

          Regarding Interest certificate for actual interest, they are correct. For provisional, what do you want to get? After all your final interest related tax benefit ‘ll be based upon the actual interest outgo, hence it does not matter, what is given as provisional interest.

          thanks

          Ashal

          1. JayaprakashReddy says:

            Thanks Ashal for providing that info. I really appreciate your effort in helping people.

            I need to give these provisional certificates to my company towards income tax declaration, but SBI is not willing to calculate it that way. I’ll try and explain it to them once again in the same way you told above.

            Is there any way I can find out the Drawing power on 4th April, 2014 now? Is it possible for bank staff to retrieve that? From the discussion I had with them, they are saying there is no way we can find how much principle amount paid so far.

            1. ashalanshu says:

              Dear Jayprakash, your branch staff may retrieve the old DP. Let them calculate the way, they want to and submit the same to your employer. In Feb 2015, you may avail new provisional certificate from bank and submit the same to employer for adjustment in tax calculations.

              thanks

              Ashal

  425. Varghese T.P says:

    Hi Ashal,

    I have a HOME loan with ICICI bank for 23.5L, pre-emi period (Aug ’10 – Oct ’11), EMI started from Nov ’11 – till date.

    Current interest rate is 11.75 (PLR 15% – 3.75 Variance), remaining tenor 197 Months.

    Value of property would be above around 85L, and my salary net 70K,. presently additional to the Home loan of 23.5L i do have a personal loan of 5L.

    I have couple questions.

    1.In 2 months time, i would need an additional fund of 12L (to close 5L PL included), would it be a good idea to top-up my exiting home loan? do you think I will have the eligibility? / or any alternative – say through balance transfer + top-up etc from other bank?

    2. Do you think my interest rate is too high? if so, can you please suggest some options.

    Primary objective is to raise the additional 12L, in two months time. your inputs on this is highly appreciated.

    Cheers
    VT

    1. Dear Varghese T, your current ROI in ICICI is higher than normal ROI. In my opinion, please discuss with ICICI for your full requirement of 12L Rs. Based upon your mly income, I doubt any bank ‘ll offer your total loan of 35-36L Rs. as your repayment capacity is not there.

      Still talk with ICICI to know how much more loan can you avail.

      In my personal opinion, you need to look into you financial behavior seriously. I do not know for what reason you took that 5L PL & now going for a fresh loan of 12L but this credit hungriness ‘ll not go down well with the lender where you ‘ll apply for a new loan.

      Thanks

      Ashal

    2. Dear Verghese T, to bring down your current ROI, please contact ICICI & pay conversion fee to get reduced ROI offered to new customers.

      Thanks

      Ashal

  426. anurag3003 says:

    Hi Ashal,

    I have taken SBI home loan (MG) of 23.25 L (ROI 10%- Tenure20 years)last week and i want to take additional loan (known as Home Loan Equity) for interior work. My questions are:

    1. When can i get that additional Loan. Can i apply for it now or do i need to wait for some time before SBI can provide that loan?
    2. Is ROI is going to be the same on additional loan as it is for Home loan.
    3. What is my eligibility of that equity loan?

    Thanks,
    Anurag

    1. Dear Anurag3003, Here are answers for your queries.

      1. When can i get that additional Loan. Can i apply for it now or do i need to wait for some time before SBI can provide that loan?
      At least 1Y of period of clean repayment is required to be eligible for Home Eq.

      2. Is ROI is going to be the same on additional loan as it is for Home loan.
      The ROI ‘ll be the current ROI offered to new customers for fresh home loan.

      3. What is my eligibility of that equity loan?
      Apart from that 1Y repayment period, your EMI to Net Monthly Income Ratio, valuation of property, total loan value can not go above 75% of current market valuation of property.

      Thanks

      Ashal

  427. George says:

    Hi Ashal, Finally I am in the last step of transferring my home loan. In one of your earlier post, you have mentioned that use Credit Card for regular payments and change MF’s SIP mandate to Max Gain account.

    Can you elaborate the significance of this…?

    1. Dear George, when you are using credit card as well as routing your SIP investments from MG account, you are keeping money maximum time in MG account & thus saving interest for the money which is to be invested or paid ultimately. If you keep this money in SB account, you are earning 4% for as many days as money remains in SB account. But in case, money is kept in MG account, you are saving interest outgo for as many days.

      Thanks

      Ashal

      1. George says:

        @Ashal,

        I noticed that SBI is charging Rs.15 per every VISA Transaction done. Is it same with SBI Credit Card as well (I hope YES). Can you elaborate the role of Credit Card in MaxGain Homeloan account benefit maximization..? What I want to know is, is it worth using Credit Card..?

        1. Dear George, I’m using SBI Credit Card & the same is linked with my Max Gain account & there is no extra charge on payment of SBI CC bill from MG acct.

          Thanks

          Ashal

          1. George says:

            @ Ashal,

            Can you answer the second part of the query related to Credit Card as well?

          2. Dear George, when one is using Credit card, the money ‘ll remain in Max Gain account for the maximum time possible. The amount spend from Card can be paid only at the end of billing cycle so the interest saving ‘ll be there.

            For example, your average mly billing amount is 10-15K & you use debit card for it. Now as & when you are using debit card, the money is withdrawn immediately from your account. But if you are using Credit card for same level of expenses, the money ‘ll go out only at the end of payment date. So till that time those 10-15K Rs. ‘ll remain in Max Gain account & ‘ll save interest.

            Please do not use Visa card pay facility to pay your other credit card bills from SBI MG acct. Instead opt for payment from the Credit card site by logging into payment from other banks. In this case no extra fee ‘ll be levied.

            Thanks

  428. Dear Manoj, thanks for now becoming an active person. 🙂

    In my opinion as the difference in current ROI 10.5% to the new ROI of 10.15% is very less, please do not go for conversion. Instead park that conversion fee into your MG account.

    Thanks

    Ashal

  429. Manoj Kumar says:

    Dear Ashal,

    I have been a silent follower of all discussion and your suggestion here as well as on FB.

    I have also availed SBI MG. And, being an existing customer of SBI, I am evaluating for conversion of my loan to lower rate (10.15%) from higher rate (10.50%) by paying out conversion fee.

    Below are some data and calculations, which I am sharing with all here for comments and suggestions.

    Total Loan Amount = 55 L
    Tenure of Loan = 20 years
    Type of Property = under construction.
    Payment to builder = CLP.
    Prepayment of loan amount = 3 L
    Balance loan amount = 52 L
    Balance Loan for = 19 years

    Current ROI = 10.50%
    After Conversion ROI = 10.15%

    Conversion fee = 1% of balance loan = 52,000. + ST
    Future Value of Conv. Fee @ 10% after 19 yrs = 318,027.
    Future Value of Conv. Fee @ 12% after 19 yrs = 447,864.

    Total Interest Paid to SBI @ 10.15 in 20 yrs = 6,967,760.
    Total Interest Paid to SBI @ 10.50 in 20 yrs = 7,259,781.
    Net Saving in Interest Part in 20 yrs = 292,021.

    EMI @ 10.15 = 51,536
    EMI @ 10.50 = 52,735
    Delta in EMI = 1,199
    Net Saving in EMI in 19 yrs = 273,443.

    Here, I see the net saving is less than the future value of conversion fee. So, no point to go for conversion 🙁

    Case 1: If I put in conv. fee (52K) in my OD A/C. or I can say prepay the same amount.

    Prepay Principal = 52,000
    Total Amount (P + Int) Paid to Bank for 52 L = 12,023,631.
    Total Amount (P + Int.) Paid to Bank for 51.5 L = 11,908,019.
    Net saving in 19 yrs = 63,612. 🙁

    Case 2: I go for conversion for reduction of ROI to 10.15% from 10.50% by paying 1% (52K), and do start an SIP of the saved amount in EMI (here it’s 1,199).

    Future Value of saved EMI (ROI @ 10%) = 7,69,233
    Future Value of saved EMI (ROI @ 12%) = 9,61,945

    Since, SBI is charging a very hefty conversion fee for lowering ROI for existing customers. Here I can see, I can only save money, if I can go for lower ROI for reduced EMI by paying 1% conversion fee and then the saved amount in EMI has to be invested by an SIP for balance of tenure.

    I would appreciate your suggestion, if I am missing some points in evaluating options and finally to go ahead with reduction in ROI by paying conversion fee.

    Hope this will help others as well!

    Thanks.
    Manoj

  430. Kunal says:

    Ashal,
    Thanks for the inputs.
    Currently I don’t have 49L, but as this is CLP(under construction ~3mth gaps), I would be supporting the 62% of EMI from some savings and salary. And also interest would be more on larger amount.

    — The few savings mentioned above is in my fathers(senior citizen) fixed deposit. Do you think that parking this in Max Gain would be beneficial than FD?

    — Can you also shed some light on this:
    b. In option (4) will the interest part be calculated on 30L or first installment the bank will give?

    Thanks again.

    1. Dear Kunal, if the ROI of home loan is more than the FD rate, it’s advisable to park into Max Gain but do note you can not withdraw your own money from MG till final disbursal.

      The interest ‘ll be calculated only on the disbursed part say 5L Rs. initially & then 5+7=12L Rs. & then 12+8=20L Rs. & so on.

      Thanks

      Ashal

  431. Kunal says:

    Hi Ashal,
    Not sure if this the right thread to ask this else pls point me to correct one.
    (http://localhost/jagoforum2/calculation-of-pre-emi-interest-on-home-loan-by-bankfinancial-institutions/3103/) ?

    I was little confused with EMI options in SBI home loan:
    1. No EMI for 18 month’s — Doesn’t look good
    2. Only interest for 12 months — Doesn’t look good
    3. Pre-EMI — interest + some principal — Is this same as Full EMI.
    4. Full EMI.

    I will be taking 30L loan and fund 49L from my side over 3 yrs period (CLP).

    a. Will the option (3) EMI will be based on principal + interest only on disbursed amount?
    b. In option (4) will the interest part be calculated on 30L or first installment the bank will give?

    1. Dear Kunal, if you can afford, paying full EMI from day one is the most beneficial thing i.e. option 4 for you.

      In case of option 3, you ‘ll pay only interest on the disbursed amount & no principal ‘ll be repaid.

      By the way, why are you going for 49L Rs. from your own pocket where you can get a higher amount of loan & instead of paying to builder from your own pocket, you can park this money into your Max Gain account to have liquidity of your money with you.

      Thanks

      Ashal

  432. Dear zzyzx, the incident you are mentioning has happened with almost all customers of Max Gain. For some people excess interest was debited on 31st August & for others, less was debited due to some software related issues within SBI. It’s first time that this type of problem has occurred & the same was rectified by SBI.

    Regarding your own case, when did you parked those 2L Rs. & what’s your ROI as on date?

    Thanks

    Ashal

    1. Sudarshan B says:

      Hi Ashal,
      Is it true that the transfer of surplus from OD to SB occurs only after the full disbursal??
      Which is more helpful Full EMI or pre-EMI ??
      Will EMI get deducted automatically on the date given by us on Standing Instruction (SI) or should manually transfer it to OD account??
      Appreciate your help.

      1. Dear Sudarshan, Here are answers for your query.

        Is it true that the transfer of surplus from OD to SB occurs only after the full disbursal??
        Yes, OD to SB transfer ‘ll be alowed only after final disbursal is done.

        Which is more helpful Full EMI or pre-EMI ??
        Full EMI from day one ‘ll help you to pay less interest.

        Will EMI get deducted automatically on the date given by us on Standing Instruction (SI) or should manually transfer it to OD account??
        Yes, the EMI ‘ll be deducted automatically.

        Thanks

        Ashal

  433. zzyzx says:

    Hi Ashal,

    I am using the Maxgain account and enabled the OD last month. I have parked some funds about 2L in the Maxgain Loan Account with the expectation that this month’s EMI would have a slightly reduced Interest component on the EMI. It did as expected and EMI interest component was lowered by about 1600 Rs. All good so far…

    However, after about 8 days, the bank debited this amount 1600Rs from my Maxgain loan account with the following comment:
    DEBIT INTEREST ACCR ADJ AS PER RECALC REQ NO

    Though, I am still following up with branch to provide an explanation but just wanted to check if this occurred with anyone else that you may have heard on this forum? Anyone else got into this situation with Maxgain loan account, and if yes, what were the remedial steps?

    Appreciate the help. Thanks!

  434. Abhishek Thakur says:

    Hi! I have few queries regarding discount of .25% offered on Home Loan for corporate salary holders by SBI

    1. Is it required to have Corporate Salary account and Home Loan Sanctioning branch same to avail this discount?

    2. Is there any time frame for which corporate salary account must have been maintained to avail this benefit?

    Help will be deeply appreciated.

    1. Dear Abhishek, you may apply from a different branch yet may got the 0.25% discount meant for corporate salary account but from ease of future operation, it’s advisable to apply from the salary account branch.

      For how many year old salary account is eligible, please contact SBI for this detail.

      Thanks

      Ashal

  435. pradeepkv14 says:

    Thanks Ashal for the quick response. I have already given them the letter saying they were charging me 11.25 instead of 11 and revert the excess interest. While my interest got changed, I don’t see any credit trasaction on my account on the interest. Will they be adjusting this end of the month when the debit the interest for the month?

    What’s the way they show this excess interest?

    Pradeep

    1. Dear Pradeep, to get back this excess interest , please follow up with RACPC as well as your service Branch. It ‘ll take some time but surely you ‘ll get your money back as a credit entry in your Max Gain account.

      Thanks

      Ashal

  436. pradeepkv14 says:

    Ashal,

    First of all, thank you so much for providing great info on the Max Gain.

    I am holding Max Gain account for last one year and rently in fully disbursed state. When I got the loan, document says my interest rate is base rate + 1%. When I checked recently with the Bank I was getting charged 11.25% where the base rate is 10%. I gave a letter to correct the interest and now it’s showing 11%.

    My question is, it’s the bank’s mistake they were charging me 11.25% instead of 11%. How will they correcting this for the interest they have already charged me for last one year. Bank manager did not give me a conclusive answer.

    Second, with the recent revision, my interest rate is now 10.75%. Manager told me that if I pay a 1% penalty my interest will be changed to base rate + .4 % which is what is for the new customers. My loan tenure is 25 years. Should I go ahead and pay the penalty to get this interest rate waiver?

    Thank you in advance.

    1. Dear Pradeep, to get back the excess interest charged from you by SBI, please file a written application to the RACPC of your city.

      The 1% penalty you are referring to is not penalty but the conversion fee to get the new ROI & interestingly after paying this conversion fee, your new ROI ‘ll be 10.15% (New base rate 9.75%+ spread of 0.4% for loans above 30L Rs.)

      In my opinion, you should pay that conversion fee to get this new ROI of 10.15%.

      Thanks

      Ashal

    2. Dear Pradeep, to get back that 0.25% excess interest, please file a written application to your RACPC. You ‘ll get back your money.

      Regarding getting new ROI of 10.15% (9.75%+0.4%), there is not penalty but the conversion fee. Which is 1% of your outstanding loan amount + service tax thereon.

      In my opinion, you should pay this conversion fee & avail the lower spread from base rate which ‘ll protect you well in future both for downward as well as upward revision of base rate.

      Thanks

      Ashal

  437. callyogee says:

    Dear Ashal,

    I have a max gain account with SBI having drawing power RS 2460000 from last SEP 2011.

    I am paying full EMI from 1 day and i am paying amount the builder on slap wise so till now i paid 22 Lacks the left amount is present in OD account .

    1) 1 month ago i found that , My Drawing power reduced to 2455000 . How it happen ?

    2) Another thing i required 30 LAcks but loan approve only 2460000 the left amount i will arrange my own and will pay to builder , So when the final disbursement will happen once i will fetch all the money from OD account or i need to pay first to builder after that Bank will pay last amount .

    Please help me .

    Thanks & Regards,
    Yogee

    1. Dear Yogee, As you are paying full EMI from Day one, the surplus amount in your MG account is bringing down your outstanding balance of loan. It seems that SBI has started adjusting your principal amount after the moratorium period of 12 months.

      Regarding 30L applied & sanctioned 24.6L only, my dear friend, this may be due to your financial situation.

      You w’d have to pay the builder the difference amount from your own pocket & then only SBI ‘ll release the final disbursal amount.

      Thanks

      Ashal

  438. sreenivasu says:

    Thanks for the reply.

    I mailed you my latest one year statement (along with likely calculations of interest by SBI), on your gmail id available above in your reply dated Apr 07, 2012.

    However I am reproducing the mail here with exact example from my account statement for easy reference.

    Small Clarification on your reply
    1. Interest is debited by bank on the last day of the month based on the closing balances of every day of the month.
    2. EMI gets deducted through ECS on 5th of next month from ICICI bank (if holiday, on next working day) and gets credited to SBI OD acct on the day next to the debit. As ECS reaches only on 6, 7 or 8th, interest is being charged on the principle and interest till such date of credit of EMI from the day of debit of interest (last day of previous month) i,e., interest on interest from last day of the previous month to the day of credit of EMI.

    EXAMPLE

    Loan outstanding as on 1.10.11 is Rs.11,52,793.71 (including interest charged on the balances of September 2011)
    interest rate – 13 %

    Transactions during the month of Oct 11:

    CREDIT of EMI on 7.10.11: 22,525 (so, closing bal of the day = 11,52,793.71 – 22,525 = 11,30,268.71)

    DEBIT of Interest for the month of October on 31.10.11 : 12,528 (so, closing bal of the day = 11,30,268.71 + 12,528 = 11,42,796.71)

    How INTEREST was calculated by SBI for Oct 2011

    =(1152793.71*(6/365)*13%)+(1130268.71*(24/365)*13%)+(1142796.71*(1/365)*13%) = 12532

    Now, transactions during the month of Nov 11:

    CREDIT of EMI on 8.11.11: 22,525 (so, closing bal of the day = 11,42,796.71 – 22,525 = 11,20,271.71)

    DEBIT of Interest for the month of October on 30.11.11 : 12,026 (so, closing bal of the day = 11,20,271.71 + 12,026 = 11,32,297.71)

    How INTEREST was calculated by SBI for Nov 2011

    =(11,42,796.71*(7/365)*13%)+(11,20,271.71*(22/365)*13%)+(11,32,297.71*(1/365)*13%) = 12030

    As is evident from above, the daily closing balances for the first week includes the interest of the previous month and interest is being charged on that amount also.

    Isnt it a bad practice to charge interest on interest? Though I enquired with the bank, they are either unwilling to answer or unable to answer.

    Though Maxgain is beneficial for customers intending to park their surplus funds, I still feel the method of charging interest on interest is a hidden charge to the customer.

    Kindly clarify and also comment if there is any way to avoid such double interest (Note: SBI is not willing to change the ECS date to 1st and is giving choice of 5th, 15th or 25th of the month only)

    Thank you

    1. Dear Sreenivasu, this is to confirm that I have received your personal mail. Are you maintaining any surplus in Max Gain or not?

      Thanks

      Ashal

      1. naveena82 says:

        Hello Ashal
        As i see from your discussion with Sreenivasu

        SBI is indeed calculating interest on interest even in my loan. I think that the question of keeping money in maxgain is not relevant. That is because let me say that if in maxgain account i do keep 1 lakh And the interest is debitted by SBI on 31st from this 1 lakh. This indirectly means that I do not get interest on this 1lakh for the next 10 days or till my EMI date.

        Also if we are paying just the EMI for lets say 15 years with no change in interest rate, then it clearly means that in 15 years if I just pay the EMI I should be actually closing the loan amount. But going by the logic of SBI where they charge interest on interest, I would still be short of clearing my loan if my understanding is right.

        Also from their logic it looks like if we pay the EMI on 10th of the month we are bound to pay higher interest since they have bloated my total principal outstanding with the interest component ( interest on {outstanding principal + interest” for 10 days ) . If we pay the EMI close to 31st we would be paying lesser interest on interest as pointed out by Sreenivasu as well.

        Thanks to clarify this point 🙂

        1. Dear Naveen, please do not come to any conclusion from the 1/2 discussion, we had discussed in personal mail also & at the last, Sree was able to find out his problem in calculation.

          All I can say is, SBI’s calculation is right.

          Thanks

          Ashal

          1. investinnest says:

            Hi Ashal,

            I am having similar confusion wrt interest on interest. If possible, could you please provide us with an example

            e.g. loan amount 200000 disbursed on let’s say 20 Feb. Interest is credited end of month and then emi starts on 10th of next month.

            This will end dilemma for lot of readers like me. Sorry if this is too much to ask.

            Thanks,
            Parag

  439. sreenivasu says:

    Dear Ashal,

    I took maxgain loan 3 years ago and my EMI gets deducted through ECS on 5th of every month from ICICI bank and gets credited to SBI OD acct on 6th.

    I observed that SBI is following daily balance interest rate and it calculates the interest at the month end.
    As my ECS reaches only on 6th, interest is being charged on the principle and interest from 1 to 6 of every month.
    For example, let us assume
    loan as on 1.1.12 is Rs.1000000 (constant throughout the month)
    interest rate – 12 %
    Now interest as on 31.1.12 is Rs.10000.
    EMI : 50000
    so assuming the Feb EMI reaching bank will cover Int of Rs.10000, the principle repaid will be Rs.40000
    Now, SBI is charging interest on Rs.10,10,000 for 1 Feb to 6 Feb and on Rs.9,60,000 for the rest of the month.

    Is it legal to charge interest on interest? Though I enquired with the bank, they are unable to answer clearly.

    Though Maxgain is beneficial for customers intending to park their surplus funds, I still feel the method of charging interest on interest is bad and loss to the customer.

    Kindly clarify if any was able to avoid it

    Thanks in advance

    1. Dear Sreenivasu, something somewhere is missing in your query. Why I’m saying so? The reason is – if your interest for the month is paid on 28-29-30-31 day of the month (as the case may be), the question of 1000000 Pr. + 10000 Interest from 1st to 5th does not arise.

      SBI ‘ll charge interest on interest only if there is no interest adjusted on last day of the month or should I say there is no positive balance in your MG account to adjust interest liability.

      Please check your account data clearly. If possible to you, you may share it with me also to have a look at my personal mail ID to keep privacy of your data.

      Thanks

      Ashal

  440. Akhtar says:

    Thanks Ashal for your help.

    1. Dear Akhtar, please feel free to contact in future also for your queries. all of us ‘ll be happy to help you.

      Thanks

      Ashal

  441. Anudeep Saha says:

    Hi Ashal,

    Thanks for the prompt reply.

    So SBI will never pay full installments of 10%,5%,5%… in case of a CLP scheme.
    Can this be negotiated with SBI?

    Do other banks also follow a similar policy or do they make full part payments?

    Regards,
    Anudeep

    1. Dear Anudeep, can you elaborate your query with an example? I’m unable to understand it?

      Thanks

      Ashal

      1. Anudeep Saha says:

        Hi Ashal,

        The example is as follows:
        I booked the 75L flat with 10% down-payment = 750000

        Suppose I take the loan now for 41.25L.
        The payment schedule for the remaining CLP scheme is as follows: 10%,10%,5%,5%,5%,5%,5%,5%,5%,5%,5%,5%,5%,5%,5%,5%.

        I want the bank to pay the full payment (i.e. 100% of 10%,10%,5%…)like this:
        10%,10%,5%,5%,5%,5%,5%,5%,5% = 55% (Scenario 1)

        Now the complete loan has been disbursed. So I would be paying the remaining like this:
        5%,5%,5%,5%,5%,5%,5%= 35 % + intital 10% = 45%

        Now coming back to my query, the bank is saying it wants the payment to be done like :
        10%(45:55),10%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55),5%(45:55) (Scenario 2)

        So I was asking whether I can negotiate with SBI to follow Scenario 1 rather than Scenario 2, as in Scenario 1 I can utilize the benefit of MG account much earlier compared to Scenario 2.

        Do other banks also follow Scenario 2 in case of a CLP scheme or they follow Scenario 1?

        Regards,
        Anudeep

        1. Dear Anudeep, SBI ‘ll always follow scenario 2. Some banks or FIs may follow scenario 1 but in that case, benefit of Max Gain ‘ll not be there with you.

          Now you can understand why I’m asking you to go for 20:80 DP, loan ratio. the money with you (45-20 = 25%) ‘ll bring down your interest outgo on the loan taken from SBI & also this need of scenario 1 or 2 ‘ll be taken care off.

          Thanks

          Ashal

          1. Anudeep Saha says:

            Hi Ashal,

            Thank you so much for the reply.

            However I have not understood the following:
            “Some banks or FIs may follow scenario 1 but in that case, benefit of Max Gain ‘ll not be there with you”

            I believe that the benefit of MG lies in the ability to take the pre-payment money back in case of emergency. In Scenario1 as the loan is disbursed earlier compared to Scenario2 I will be able to withdraw back the money earlier but in Scenario2 the pre-payment money gets locked for a longer period of time.

            Please correct me if I am wrong.

            Regards,
            Anudeep

          2. Dear Anudeep, As on date MG product is offered by SBI. Similar product is offered by HSBC & S&C only. So what I’m telling you, if you are opting a bank or FI which is disbursing the amount as per scenario 1, you ‘ll not get the product Max Gain or a similar one.

            Thanks

            Ashal

  442. Anudeep Saha says:

    Hi Ashal,

    Kudos for helping so many people in this forum.
    I have a query of my own.

    I have booked a flat of 75L in a CLP scheme by paying 10% of the cost. I would also be paying the next 10% from my own sources. After the 2nd payment I am planning to take an SBI Max Gain loan for 40L. The ratio will be like 45:55.

    The payment schedule for the future would be :10%,5%,5%……

    Can you please explain how the bank will be disbursing the loan?

    Will it be giving the next installments of the house in whole as 10%,5%,5%…or it will ask me to pay the installment in the ratio of 45:55 i.e., for 10% : 3.37L from me and 4.13L by bank, for 5% : 1.68L from me and 2.07L from bank.

    Regards,
    Anudeep

    1. Dear Anudeep, May I know the reason of opting 45:55 ratio & why not usual 20:80 ratio od Down Payment & Loan? In this case, as I ‘m offering, you can park your own money in mG acct. to bring down your interest outgo & still the liquidity of your money is with you, once the final disbursal is done. In your case, as you are directly paying to builder from your own resources, the liquidity of the money is not with you. Think over it.

      Regarding your own query – If you are applying for a CLP linked loan & for a 45:55 ratio, at any point of time, SBI ‘ll maintain the same ratio. For example, if you have already paid 10L Rs. SBI ‘ll release roughly 12L Rs. To keep the rio 45:55. In future as & when you ‘ll pay more amount from your own pocket, the SBI ‘ll release more loan under the over all ratio of 45:55.

      Thanks

      Ashal

  443. Akhtar says:

    Dear Ashal,

    I had done some calculation in that sheet and found that I can reduce my interest (by deposit extra money / parking surplus ). I can get benefit even if I deposit some money to MG account and withdraw it later.
    So I thought this sheet has correct calculation for MG account calculation. Thanks for your opinion. Kindly share with me if you have any excel sheet for MG account, it will help me for planning my finance.

    Thanks & regards,
    Akhtar

    1. Dear Akhtar, once you start depositing some amount, the benefit of MG is there to you. How much benefit ‘ll be there ‘ll depend upon the amount parked by you & the time it remain there in MG account. So for this floating condition, no fixed excel sheet can be prepared. You may prepare a sheet & put in the actual nos. on daily or mly basis as the case may be.

      Thanks

      Ashal

  444. Ashish says:

    Hi Ashal,

    I have taken Loan on amount 25 lakh Under SBI max Gain. The total cost of property is 52 lakh and I have already made paymenty of 20 lakhs. Just to activate the Loan account SBI officials asked me to disburment of Rs 10 thousand and repay the same to bank.

    My question is that If i transfer 10 thousand to my OD account, will bank charge any intrest on that. I have opted to start my EMI from Dec 15 2012. So after this period whether I take loan or not, the bank will start taking EMI’s ?

    Please help me to understand this.

    1. Dear Ashish, can you elaborate your query? I’m unable to understand it properly. What do you mean by 10K withdraw & redepositing in MG account?

      Once you withdraw an amount from MG account or bank pays it to builder, the interest ‘ll be due to you.

      Thanks

      Ashal

      1. Ashish says:

        Actually I am planning to pay maximum amount from my pocket and I have taken a loan to avoid any cash flow issues in future. My loan application has been sanctaioned but i have not avail any amount yet. bank is telling that account need to be activate within 6 months else i will have to go for fresh application. To avoid that I have asked builder to give me 10k demand letter and same has been given to bank. My question is bank will pay 10k from my OD account. If I credit 10k back to OD account on the same day, do I need to pay any intrest on that. The loan term in 20 yrs staring EMI from day one….means no pri emi

        As I understand I need to pay intrest only for the amount I avail from bank in this case its 10k.

        1. Dear Ashish, instead of opting low loan amount, why are you not going for high loan amount & parking your own money into MG acct. itself?

          For the given query, yes if on the same day, the 10K withdrawn by builder & same 10K is deposited by you in MG account, there ‘ll be no interest due on you.

          Thanks

          Ashal

  445. Akhtar says:

    Hello Ashal,

    Did you get a chance to check sheet which I sent you in mail?

    Thanks & Regards,
    Akhtar

    1. Dear Akhtar, thanks for sharing that sheet. The sheet shared by you is a normal sheet & nothing extra ordinary is there in it. You are treating this MG account just like any normal term loan. The real benefit of MG ‘ll start to you only if you start parking your surplus funds even for few days. Try to increase your surplus amount over the period. This ‘ll reduce your interest outgo. Interestingly, you do have the liberty to withdraw this surplus amount as & when you need so.

      Thanks

      Ashal

  446. Parag Kumar says:

    Hi Ashal,

    I enquired in SBI regarding Credit interest thing. They said that the interest calculation of 31st August was wrong. So they have credited the corrosponding amount.

    Thanks.
    Parag

    1. Dear Parag, thanks for the update.

      Thanks

      Ashal

  447. Sanjay Garg says:

    Thanks Ashal for feedback,

    Yes, full disbursal has already happen, I will contact GK branch for the same and revert if any further query .

    Thanks

    1. Dear Sanjay, We ‘ll wait for your response. Till then enjoy.

      Thanks

      Ashal

  448. Sanjay Garg says:

    I have recently taken an Home Loan of 30L Under SBI Max Gain.

    My saving account is with Ring Road – New Delhi Branch and My OD account opened at GK New
    Delhi branch with same CIF no.

    I am able to see both my account through my Savings net banking ID,

    I have also transferred some surplus amount from my saving account to Loan OD Account

    but I am not getting any option to transfer my surplus fund from my OD account to Saving
    account

    Need you advice to get this enabled, Do i have to contact Branch ?, Which branch

    My both the accounts are joint accounts (Savings as well as Home loan)

    1. Dear Sanjay, had the full & final disbursal been done or still an amount is pending for disbursal? In case the amount has been disbursed in full, please contact the GK Branch to activate netbanking facility on your Max Gain account.

      Thanks

      Ashal

  449. Philips says:

    Dear Ashal,

    Thanks for your prompt reply. I really appreciate your help.

    Just to clarify, Since I will be paying ~5.1L to ICICI, SBI interest rate will be 10.25% for me right (because current outstanding is < 30L)?
    It wont charge 10.4% because my original loan amount of 35L falls into different interest rate bracket?

    1. Dear Philips, As your loan ‘ll be a bit below 30L Rs., the lower interest rate of 10.25% ‘ll be applicable to you.

      Thanks

      Ashal

  450. Philips says:

    Dear Sir,

    I am having home loan of 35L from ICICI bank (from last 1year). I understand that SBI is having lower interest rate compare to ICICI and hence I am planning to shift my home loan from ICICI to SBI (under max gain scheme) I am having 02 questions:

    1. I have 10L of liquidity with me. In case I prepay 10L to existing bank and then transfer my loan then — My home loan interest rate bracket will be consider based on my original loan ( 35L) or current outstanding (~25 L)? I see SBI has different interest rate for loan above 30L (10.4 compare to 10.25% for loan below 30L)

    2. Is there any extra charge in interest rate for SBI max gain scheme compare to regular home loan schemes from SBI?

    Thanks in advance for your help!

    1. Dear Philips, Here are my inputs for your condition.
      1. Instead of prepaying full 10L Rs. to ICICI, just pay 5.1L Rs. to make your existing loan below 30L Rs. limit. Now transfer this loan to SBI Max Gain.
      2. Once SBI MG is active, please park the remaining surplus amount of roughly 5L Rs. into MG account to save on interest outgo yet you do have liquidity of this amount with you to use in case of need.
      3. No, there is no extra charge or ROI for SBI MG.

      Thanks

      Ashal

  451. ympaithankar says:

    I am using this calculator to see EMI interest and principal amount changes —
    http://www.bankbazaar.com/finance-tools/emi-calculator.html

    Does anyone has better tool for the same ?
    The tool should consist of prepayment options to put in OD and changes in calculations etc . I am not that good in xls

    1. Dear YMPaithankar, the tool is available in your PC. Please check for loan amortization template in your PC. As you are not going to use Max Gain for the very purpose it’s suppose to do-parking surplus amount, the question of calculating benefit of Max Gain does not arise.

      In general, you may calculate, how each subsequent part prepayment ‘ll bring sown your interest outgo from that template.

      Thanks

      Ashal

  452. ympaithankar says:

    Today I visited SBI office and person there told me you will never be able change your EMI. at any cost. you have to change the bank. or
    might be possibility of reprocessing a loan and having new agreement with SBI(on this he was not sure enough ).

    1. Dear YMpaithankar, the person you talk to does not has info. The change of EMI is possible. Redocumentation in terms of loan agreement ‘ll be there & it’s not with SBI alone, it’s a common practice with every lender. It’s very much possible within SBI to reduce your EMI within the existing home loan.

      Thanks

      Ashal

  453. icemanz says:

    Hi Ashal,
    I have a home loan of 27 Lakhs for 20 years with HDFC availed in 2007 Dec at floating interest rate. The present rate of interest is 10.75% and I have been paying EMI of Rs. 26975 since begining, also made a part payment of 2 lakhs in May this year. The principal balance is about 22.60 Lakhs. I have some funds in the savings; however do not want to block them by making part payment.
    Does it makes sense to switch the loan from HDFC to SBI Maxgain? Will preclosure charges apply while switching loan from one bank to another?

    1. Dear Icemanz, yes switching to SBI Max Gain ‘ll be helpful to you. No there ‘ll not be any penalty for this switch over.

      Thanks

      Ashal

  454. ympaithankar says:

    how to reduce EMI amount. (I am not asking about benefits of OD and reducing principal amount and reducing interest on it ) . I want to reduce EMI from 41 K to 33K how to do that ? without switching bank and without increasing tenure from 15 to 20 years or something like that. Just paying some amount to reprocessing the loan will do ?

    1. Dear YMpaithankar, please read my prev. reply given to you.

      Thanks

      Ashal

  455. Parag Kumar says:

    Hi Ashal,

    Sorry to have not replied to your last question. I was offline for many days.
    Actually i saw the interest-emi calcluation and there is some drop in interest outgo due to maxgain. By the way, i had one query.

    What is the meaning of credit interest?
    I can see some 474 rupees credit interest in my OD account on the next day of my EMI deduction this month.
    Is it related to maxgain?

    Please see the text below.

    Thanks.

    08-Sep-2012 CREDIT INTEREST INT ADJ AS PER RECALC REQ NO 474.00
    07-Sep-2012 DEPOSIT TRANSFER TRANSFER FROM 42,385.00

    1. Dear Parag,

      The transactions you are referring to is some prev. due interest which is now adjusted by SBI for all accounts. I have noticed the same in many other Max Gain Accounts of my friends. Please contact SBI to know the exact calculation details of this credit interest. Actually it’s debited from our accounts.

      Thanks

      Ashal

  456. Akhtar says:

    Dear Ashal,
    Thanks for reply. I am not sure if I can share any other links on this forum hence I have sent you a mail which contains sheet to calculate Maxgain advantage on interest for homeloan.

    Thanks & Regards,
    Akhtar

    1. Dear Akhtar, this is to confirm that I have received your personal mail. I ‘ll check the same & ‘ll answer you there.

      Thanks

      Ashal

      1. ympaithankar says:

        Dear Ashal – I have obtained SBI home loan of ~37 lakhs and I am having EMI of 41879k per month for 15 years.
        I am thinking of how to reduce my EMI. I have 6+ Lakh’s with me which I can deposit in OD(after completion of 1 years in march 2013) and ask bank to get that amount permanently deducted. As I don’t want to withdraw it. So my net principal amount will reduce to below 30L. If I freshly restructure/reprocess the LOAN for 30L in SBI only (paying 15,000K of fees) my EMI will come down to 33,000K per month. My question is is that possible ?? SBI will allow it ? how to proceed ?

        monthy burden of 40+K is too much. and Interest paying on higher amount surely will be high ..so instead reducing principle amount will be good idea along with reduction in EMI keeping years to 14 years (instead of 15 years).

        1. Dear YMPainthankar, If you want to reduce your EMI, by prepaying a part of your existing loan, you can do so. Please park surplus amount into MG OD account & write an application to SBI & rest job ‘ll be done by SBI people.

          Thanks

          Ashal

  457. Akhtar says:

    Hi All,

    I saw a very nice & healthy discussion going in this thread about SBI maxgain homeloan. Thanks Ashal & All for sharing wonderful information.

    I too have some queries regarding my homeloan which I took from SBI (Maxgain scheme) in Feb-2011. I took ready possession flat hence Bank made full disbursement of loan amount (Rs. 24L, duration – 20 years) to builder at that time.
    After reading many threads & discussing with friends I decided to make some pre-payment to reduce the interest part of loan. Hence recently I paid 1.25 L from my savings. I have following queries:-

    1) After calculating from an Excel sheet for “SBI Maxgain Advantage” I found that I am saving interest of more than Rs 5L; Is this correct? As per sheet I can save another ~4L if I do pre-payment of another 1L. If formulas mentioned in sheet is correct then I am planning to do pre-payment till the time I have fixed RateOfInterest and want to reduce interest as much as I can. So could someone please confirm about this calculations or kindly share/refer another sheet?

    My ROI was 8% for first year, for 2nd & 3rd it is also fixed for 8.5 and after that current rate will be applied. I calculated Annual Interest Rate as 10%.

    2) After pre-payment of Rs. 1.25 L, I observed that Rs 1170/- is deducted from my loan account. I guess there are not any charges for pre-payment. Can someone correct me if I am wrong.

    Thanks in advance!
    Akhtar

    1. Dear Akhtar, the beauty of Max Gain is the liquidity available to us for our own money. I do not from which excel sheet, you calculated your interest benefit but I do know one thing for sure, if you are adding even some small amount on mly basis in your MG account, the total benefit for the interest ‘ll be huge over the period of the loan.

      Regarding that 1170 Rs. please check with SBI for the exact reason.

      Thanks

      Ashal

  458. George says:

    Friends, I have a doubt. If SBI is forcing customers to take the life insurance cover from them, can we take the policy and return it on free look period? Also what will happen if we pay one year’s premium and later cancel the policy..?

    1. Dear George, Yes you can return the policy in the free look period. In case you want to play it safe, you may stop paying any more prem. after 1st year’s prem. In case you opt to not pay any more prem. after 1st prem. the policy ‘ll lapse.

      Thanks

      Ashal

      1. George says:

        @Ashal,

        Another query, will SBI issue a Credit Card instead of Debit Car against the Maxgain account..? If they issue the Credit Card, we can’t use them to take cash from ATMs right? (Because of the heavy interest). Now if I have another bank’s Credit Card, I can continue using that and pay from Maxgain account. Please correct me if I am wrong.
        As my documents are still with my old lender, I am yet to get Internet banking rights/debit card for my Maxgain account. Yesterday I added Maxgain account to my SB Account which newly opened and transferred the a trial amount. The amount has been credited to Maxgain account. Will we get SMS Confirmation for transactions happening in Maxgain account.

        One last thing, If I want to compare the interest rate differences, is there a calculator? I would like to calculate the interest outgo if I would have continued with my previous lender and present lender. There are calculators available, but they are all assuming that interest rate is constant.

        Thanks in advance for the reply.

        1. Dear George, Here is the answer for your query.

          No, You ‘ll not get any credit card against Max Gain Home Loan, Yes Being Home Loan customer, SBI may offer your It’s Credit card. In case you are using another bank’s credit card, you may continue with it & pay i’s bills from Max Gain itself.

          To get the exact calculation of benefit, please prepare a sheet for yourself in exl sheet.

          Thanks

          Ashal

          1. Aprajita singh says:

            Dear sir
            I have taken a home loan of 500000 in 2007 from ICICI Bank. I have been regularly paying EMI since 2007. Why my outstanding balance of loan amount is still same? and bank has increased my loan tenure without my permission
            Please reply what should i do?

  459. aravind81 says:

    I currently have SBI maxgain loan and I am taking it at 60:40 proportion (mine is 60). I have taken the first disbursement and the project has at least 3 years to go. Given the next 3 disbursements at 10 lacs each. Is it possible to do the following? Instead of me taking 4 lacs every time as loan, can I pay 20 lacs out of my pocket for the first 2 installments and then take 10 lacs loan from SBI for the last installment. This will be within the 60:40 proportion but is there a regulation that a proportionate contribution must be made of each disbursement.

    Thanks
    Aravind.

    1. Dear Aravind, bank ‘ll disburse next installment only as & when the builder ‘ll raise a demand. For your given case, as you are paying from your own pocket, builder ‘ll not contact SBI for next disbursal & hence Bank ‘ll not release any loan. So you can pay from your own pocket as of now. Later on SBI ‘ll release at the last.

      Thanks

      Ashal

      1. aravind81 says:

        Hi Ashal,

        Thanks for your reply. There is one slight clarification here. For my first installment of 10 lacs, I paid 6 lacs and bank paid 4 lacs. There is a clause in my home loan document that says “You will have to bring in proportionate margin at each stage of disbursement”. By the time the next 2 installments (installments nos. 2 and 3) of 10 lacs each is due, I hope to be able to pay the entire amount. Then for installment No. 4, I want to have the bank pay the entire 10 lacs, this way I will be saving some money on interest. I will still be within the 60:40 proportion, since I would have paid 26 lacs and the bank needs to pay only 14 lacs at this point.

        I just want to understand that if this is possible or will the bank insist that they pay 4 lacs every time the builder has a demand based on the clause (since that will be violated for installment no. 4).

        Thanks
        Aravind.

        1. Dear Arvind, what this line effectively means that at any given point of time, Bank ‘ll not release amount more than the ratio amount put in my you as margin money. In case you are paying your full margin or a major part upfront, bank ‘ll not create any issue & ‘ll release the amount as & when demanded by the builder till the time, ratio limit is not exhausted.

          Thanks

          Ashal

  460. Gaurav says:

    Hi Ashal ,
    I found another discussion on exact same topic.
    http://www.indianrealestateforum.com/bangalore/t-registration-stamp-duty-charges-33980.html

    Here also somebody mentioned that they did registration as guided value , though loan is from SBI.

    Thanks
    Gaurav

    1. Dear Gaurav, please print out that discussion & show it to SBI. All I can offer.

      Thanks

      Ashal

  461. Gaurav says:

    Hi Ashal ,

    Thanks , I did not notice the fact that ST is credited to Central Govt.

    Only thing is I heard from so many that they have done registration at minimum value instead of Sale Agreement Value .

    Now I am really thinking if I have to take loan from SBI , and they really make sure that I perform registration at Sale value , then this offsets me by 2 lakhs.

    Not sure , if I should take that hit. I am going for loan of 30 lakshs. Suggestions please?

    1. Dear Gaurav, please go for actual value registration. This ‘ll save you in future also as & when you ‘ll sell your house on account of long term capital gains. If possible to you & your cashflow permits, go for a higher loan amount say 32-35L Rs.

      Thanks

      Ashal

  462. Gaurav says:

    Hi Ashal ,
    Thanks a lot for your response. I did check with some other people on my point 1. The registration for underconstruction property they have done at the government rate , even though the loan was from SBI . The idea here is that at underconstruction property you need to pay service tax of 3.09% . Where as at ready to occupy this is not applicable.Hence the government taxes including registration becomes almost same for underconstruction and New property.

    If I have to do registration @ Market rate and also pay service tax it would be too expensive for me. Its like 2 plus lakhs more , which is really a big amount .

    Could you please cross verify this aspect ? I am sure there must be same way out , as this would burn a big hole for all who takes loan from SBI.

    Thanks
    Gaurav

    1. Dear Gaurav, we are not understanding each other. The registration related expenses i.e. Stamp Duty & Registration charges are paid on the sale deed value to the State Govt. Where as Service Tax is paid on the deal value to Central Govt.

      So I’m unable to figure out from your original query & follow on reply/query, what we are discussing?

      Thanks

      Ashal

  463. jegan r says:

    Hi Ashal,

    I have a Question.Bank will give only 85% of cost.Currently i didnt do anything on the Empty plot.So it means should i spend the 15% cost initially (Like Putting BOREWELL,Basement) and then only i can apply for the loan ? Or without anything directly i can apply for LOAN?

    1. Dear Jegan, I’m trying to give an example for your case. Say your cost of construction is 20L Rs. Now out of 20L Rs. 3L Rs. is your down payment & 17L Rs. ‘ll be SBI Loan amount.

      Now out of those 3L Rs. you w’d have to spend some thing say 1L Rs. accordingly SBI ‘ll release a part of loan amount. In the mean time you w’d again spend some more from your own pocket & SBI ‘ll release more loan.

      So at any given point of time, SBI ‘ll release only that much loan amount which ‘ll remain within this 15:85 ratio for down payment & loan amount.

      Thanks

      Ashal

      1. jegan r says:

        Hi,

        Then assume that i spent the fll 3L in a single attempt by putting Borewell,Basement and some construction then SBI will release the full 17L in a single shot?

        1. Dear Jegan, even if you have already spent or ‘ll spend full 3L Rs. before loan sanction or disbursal, even then SBI ‘ll release loan in tranches as per %age completion of the work.

          Thanks

          Ashal

  464. sandi_pesit says:

    Dear Ashal,

    Lets see. I will try to get that life insurance also waived off… Few more queries:

    1. Now that I have applied for loan of 35l@10.4, it will take some time to get sanction. After sanctioning, at the time of documentation, can I finally go for 30l@10.25?
    I might not do so, but just wanted to know if at the time of final documentation with bank, whether I can make some changes as per my original application(like loan amt, pre-emi option, tenure, etc..):)

    2. How about the topping up a loan. Say I take 30l initially@10.25. I came to know that I can top it up with another 3lac at the same ROI. Can you please help me know how much I can top up on an existing loan and is there any certain perion after which only I can top up? Will the ROI remain same on topping up?

    3. While applying loan, the executive was telling that the ROI is going to reduce further. And if my loan gets sanctioned after reduction then I will avail new reduced ROI. If not, then I will continue with 10.4ROI even if the ROI is reduced after my loan is sanctiond.
    But as per my knowledge in floating case, ROI will reduce even for existing customer if the base rate is resuce. Please elaborate.

    Thanks in advance!!
    Sandip

    1. Dear Sandip, here are the answers for your queries.

      1. Now that I have applied for loan of 35l@10.4, it will take some time to get sanction. After sanctioning, at the time of documentation, can I finally go for 30l@10.25?
      I might not do so, but just wanted to know if at the time of final documentation with bank, whether I can make some changes as per my original application(like loan amt, pre-emi option, tenure, etc..):)
      In my personal opinion, please opt for 35L Rs. loan. The interest rate is just 0.15% high but at the same time, you are having your money in your hand which you may park later on in Max Gain account to bring sown your interest outgo for the same 5L Rs. which you ‘ll pay to builder other
      wise.

      2. How about the topping up a loan. Say I take 30l initially@10.25. I came to know that I can top it up with another 3lac at the same ROI. Can you please help me know how much I can top up on an existing loan and is there any certain perion after which only I can top up? Will the ROI remain same on topping up?
      Please read the answer 1 above. Yes Top up loan is possible. It’s called Home Plus in SBI.

      3. While applying loan, the executive was telling that the ROI is going to reduce further. And if my loan gets sanctioned after reduction then I will avail new reduced ROI. If not, then I will continue with 10.4ROI even if the ROI is reduced after my loan is sanctiond.
      But as per my knowledge in floating case, ROI will reduce even for existing customer if the base rate is reduce. Please elaborate.
      Yes 10.4% is the rate offered to you for the spread of 0.4% above Base rate. As & when the base rate ‘ll be reduce, your own ROI ‘ll also come down automatically. You need not to worry. The reduction in spread from 0.4% is very unlikely.

      Thanks

      Ashal

  465. Gaurav says:

    Its been wonderful reading through your answers.

    I have recently booked a property and interested in SBI home loan.

    a) I filled up “Apply Online” and waited someone would call . Did not get any.

    b) I personally went to near by branch and was handed over a sheet with list of documents , which I should submit. They did not even had a form . Manager asked me to download from the internet.

    c) I still want to take loan through SBI .

    Could you please help me with below queries? I am in hyderabad.

    1) In the checklist I saw a document “Undertaking to register property at the price mentioned in sale agreement” . Is this true. As far as I understand , under construction property can be registered at the government guided rate. For example , I bought a flat for say 3000 psft , but government rate is 1500psft. So I should be paying registration on 1500psft and not on 3000psft. Could you please confirm that? All others bank allow that , SBI should not be an exception.

    2) Somewhere I read SBI Speacial home loan branch. Do you know any in Hyderabad? I could not find one on internet.

    3) Anyother contact from SBI who can help me to quickly get this through. As far as I know property is preapproved by SBI.

    Appreciate your quick response
    Thanks
    Gaurav

    1. Dear Gaurav, first of all i congratulate you for going with SBI even after not getting initial response. Be ready for such non co-operation initially. Once your loan is processed, the life ‘ll be very easy, that I can promise you from my personal experience. Here are the answers for your queries.

      1) In the checklist I saw a document “Undertaking to register property at the price mentioned in sale agreement”. Is this true. As far as I understand , under construction property can be registered at the government guided rate. For example , I bought a flat for say 3000 psft , but government rate is 1500psft. So I should be paying registration on 1500psft and not on 3000psft. Could you please confirm that? All others bank allow that , SBI should not be an exception.
      Please do note the Govt. rate is the minimum support price below which you can not register your property. But in case you do want to register it for a higher price or in your own example say 3000 PSF, you can do so. As per SBI procedures, you w’d have to register at this 3000 PSF rate.

      2) Somewhere I read SBI Speacial home loan branch. Do you know any in Hyderabad? I could not find one on internet.
      What you are talking is not Special Branch but it’s the centralized processing center which is known as RACPC – Retail Assets Central Processing Center. No matter from which branch in Hyderabad, you are applying for your loan, ultimately your loan application ‘ll go to RACPC of Hyderabad.

      3) Anyother contact from SBI who can help me to quickly get this through. As far as I know property is preapproved by SBI.
      It’s good news that property is a preapproved property. In SBI’s technical language it’s APF = Approved Project File. Please ask your builder to give you the copy of sanction order of APF. Please file this with your loan application.

      Do not lose heart for not getting proper response from that nearby branch. We are with you. Please feel free to ask at every step. We ‘ll be happy to help you. Regarding to get help from Branch itself, please there for Loan councilor. Each SBI Branch has at least 1. this person is not on SBI Payroll but ‘ll get commission from SBI for the loan sanctioned to you. Most of the time, retired SBI Staff is appointed for this role.

      Thanks

      Ashal

  466. sandi_pesit says:

    Dear Ashal.. I applied for the loan yesterday. They were asking for guarentor but after speaking with Branch manage, its waived off. But they are insisting to take SBI Life. The branch Manager told that he can waive it off also but he does not think the head office will waive off.. I feel the SBI Life is optioal. Then why are they pushing to take? Anyone faced this?

    1. Dear Sandip, good to know that guarantor thing waived off. Regarding this SBI Life insurance cross selling. Please read this discussion above. many people like you had been asked to purchase a SBI Life policy. My take is to accept the offer but opt a plain vanilla term cover SBI Life Smart Shield. Please go for a 25 multiple of your yly income as Sum assured, the regular prem. ‘ll be high. Please pay it (depending upon your age, it may anywhere from 30K to 45K). In all probability, the underwriters of the SBI Life Ins. co. ‘ll reject your proposal & SBI Life ‘ll return back your prem. after deducting minor charges for medical done if any?

      This is a practical way to say ‘NO’ with out saying ‘NO’ from your mouth.

      Thanks

      Ashal

  467. subhrajyotipal says:

    Dear Ashal,

    My Maxgain Home Loan has been sanctioned and first disbursement is made. During signing the documents, I have optd for full EMI from first month. However, reconsidering my finances and other things, I now want to start the full EMI after possession and only pay the Pre-Emi (only interest will be paid on the disbursed amount before the possession and then normal EMI will start on the total loan). Is this arrangement now possible ? Can I approach the SBI bank for this ?

    1. Dear Subhrajyotipal, change in EMI schedule is possible but you w’d have to take pain for this with RACPC as well as your branch. Please do so as early as possible.

      Thanks

      Ashal

  468. Loganathan says:

    Dear Ashal,

    Thanks for your patience reply, I need your suggestion on below options

    1. Pre- Closure
    2. Additional EMI payment
    3. Accumulating in OD A/c

    In above three case which will be more effective to save our total Interest.

    Thanks,
    Loganathan

    1. Dear Loganathan, here is the answers for your query.

      1. Pre- Closure
      2. Additional EMI payment
      3. Accumulating in OD A/c
      In above three case, to save interest, parking money in Max Gain is the best option as you are keeping liquidity with you. In other 2 options, the extra payments done (either in lump sum – option 1 or additional EMI – Option 2) ‘ll not offer you liquidity for your own money.

      Thanks

      Ashal

  469. sandi_pesit says:

    if the loan is a normal home loan & disbursal is done just 5L Rs. yet you are paying full EMI, what ‘ll be the break up of EMI & the actual adjustment of interest & principal?

    –In this case, 34709 (Full EMI) will be divided to cover 4333(interest) and 30375(principal).

    3. Cant the 4333 be used in any way to prepay the principal amount?
    You are already paying a huge amount as principal repayment, so where is the need to use this interest part for principal repayment?

    — More principal prepayment will mean burden of loan getting reduced gradually. Huge amount + 4333 = More huge amount 🙂 In max gain case also, after 2 yrs, I can take out all the interest part accumulated in it to make a bulk prepayment. So its same.

    6. Why do you suggest a SBI savings account for EMI payment? Any problem if I use my ICICI salary account for the EMI payment using ECS facility?
    Well you can use that ICICI SB account for your EMI payment, but do tell me, w’d you keep 2-3 EMI money surplus in that account or not? Please answer.

    — It is salary account, so the savings in it after some 6 months of paying EMI can be 2-3 EMI money surplus (assuming I am not investing in anything else). My point in asking this question is, if I use SBI account for EMI payment, then I need to transfer from salary account to SBI account. Then again from SBI account to Loan account. So multiple transactions.

    Thanks a lot for answering all the questions. Appreciate your efforts and patience. Really helped me to know MaxGain loan scheme.

    Sandip.

    1. Dear Sandip, Those 4333 Rs. months after months ‘ll keep accumulating in the Max Gain account & later on as & when the next part of loan is disbursed, these accumulated interest ‘ll do the same thing what the original 5L Rs. are doing, bringing down the loan liability for interest payment purpose.

      In case of EMI from ICICI, you w’d keep at least 3 months’ EMI amount as safe buffer in ICICI, which ‘ll earn you only 4% interest. But when the money ‘ll go as EMI from SB account of SBI, no need to keep buffer in this SB account as you can transfer through netbanking the EMI amount from Max Gain to SB 1-2 days advance. Interestingly, you need not to do on mly basis. You can schedule this operation for 12 months at a time. But do remember this OD to SB transfer ‘ll get active only after final disbursal of loan.

      Thanks

      Ashal

      1. ab_home says:

        Dear Ashal

        Thx for your comprehensive replies on this topic..

        I have a question on the Max gain loan account for using surplus funds.

        Suppose I have a 20 lac loan amount as on date in SBI Max gain. This is for a fuiIy paid up propertry.

        Now I come into temporary funds of 25 Lacs for two months and decide to park them in the max gain account.

        the account thus will have surplus funds of 5 Lacs..

        will I then be credited interest for the surplus at the same ROI?

        Kindly help answer.Thx

        1. Dear ab_home, if your outstanding loan amount is 20L Rs. only & you are parking 25L Rs. you ‘ll not earn any interest on the extra 5L Rs. The interest outgo for the basic loan amount of 20L Rs. ‘ll be zero as full amount is adjusted against the parked amount of 25L Rs. so for the given condition, I w’d ask you to park only 20L Rs. in Max Gain & remaining 5L Rs. else where.

          Thanks

          Ashal

  470. sandi_pesit says:

    Hi Ashal, Your responses are really helpful in understanding the MaxGain Product.

    I will be applying for loan from SBI on Monday for tenure of 20yrs. So need some quick advice from you.
    My property cost is 53lakhs + 2lakhs registration. I have paid 7.45 lac (15%) as booking amount and need to pay remaining 21.2lac (40%) by 30th Sept based on the stage of construction. Currently I can stretch myself to the extreme by pulling out all my savings and pay 17lakhs. So in that case I have to take a loan of 30lakhs. Completion date is Jan 2014. But I am in a dilemma for the below points:

    1. The reason I am thinking of paying 25 lakhs in total from my pocket is the difference in ROI between 30lac (10.25) and above 30lac (10.4) loan. I know in the coming 2yrs time I will make a repayment of around 5lakh but still I will be charged at a rate of 10.4% on the remaining outstanding amount which will be less than 30lakhs. Is it wise decision based on the saving I will make at the end of 20yrs?
    2. Or is it better to take a loan of 35lac @ 10.4% and put the remaining 5 lacs in Maxgain account? In this scenario, is it better to put 5lac in Maxgain account or to make FD of 5lacs for a tenure of 5 – 10yrs? Which will be beneficial?
    3. Say my loan amount is 35lacs @ 10.4% for 20 yrs. I will be paying full EMI from beginning @ Rs 34709. Say in my Maxgain Account I have deposited 5lac and initially bank disburses only 5lac. Then in this case, my full EMI of Rs 34709, will be settling the principal. Correct?
    4. If I keep 5lacs in MaxGain account, then will I be getting the savings bank interest @ 4% on this amount? Will the interest amount be adding up to my surplus fund of 5lacs in Maxgain acc?
    5. Is it possible to not keep any surplus amount in the Maxgain account?
    6. I cannot withdraw any money from Maxgain account till Jan 2014. Right?
    7. Currently Maxgain and Easy home loan ROI is same. Can there be a possibility that the ROI will increase for Maxgain in future? I doubt because if maxGain is advantageous over Easy loan, then how come ROI for both are same. 🙂
    8. As I understand, the Maxgain account will have net banking , debit card facility. So I can use it as a normal savings bank account. Correct?
    9. I have salary account in ICICI. Can I transfer from ICICI account to Maxgain account by netbanking and vice versa?
    10. I guess the scheme is same in all the branches of SBI as well as the RACPC. Please let me know.

    Please give your suggestion on which scheme to go for and how much loan should I avail based on the above scenarios.

    Thanks in Advance!!
    Sandip

    1. Dear Sandip, Here are the answers for your queries.

      1. First of all please apply for a loan amount of 42-44L Rs. which is maximum possible for your nos. Why? As you are going for a higher loan amount & it ‘ll be a CLP (Construction linked payment), your builder ‘ll be forced for timely delivery. In case delay in construction, so do in payment from bank, you are safe in that sense as your own money is not at stake. Yes EMI as well as ROI ‘ll be higher in this case but it’s worth to pay little more to bank. As the difference is very less 0.15% only, I w’d like you to go for maximum possible loan amount.

      2.Already asked you to go for higher loan amount.

      3. As the first disbursal is 5L only & same is matched by you, depositing full 5L Rs. the interest outgo ‘ll be zero & the interest part of EMI ‘ll keep on accumulating in Max Gain which ‘ll again help to bring down interest outgo as & when in future SBI disburses more amount. Only the principal part of your emi ‘ll go for loan repayment.

      4. You are not earning any interest on your Max Gain surplus amount directly but indirectly you are earning the interest of 10.4% as you are not paying that to SBI.

      5. Yes you are free to not park any surplus at all. In this case the benefit of Max Gain ‘ll not be there & your loan ‘ll run like any normal home loan.

      6. Yes you can not withdraw your surplus amount till completion of house & final disbursal of loan.

      7. No, the change of ROI between easy & Max gain ‘ll not be for you. Yes it may happen in future for new customers.

      8. Yes, you can use it as an ordinary bank account for all other transactions.

      9. Yes, you can transfer from ICICI to Max Gain & vice verse (once transactions are enabled in your Max Gain account).

      10. Yes, scheme is same all over India.

      It’s advisable to have a normal SB account with SBI for EMI payment.

      Thanks

      Ashal

      1. sandi_pesit says:

        Hi Ashal, Thanks for your valuable feedback.

        I could not understand the point 3 reply. Please help in getting better understanding.

        1. Say, I have taken a loan of 35lac@10.4% and I opt to pay full EMI from month1. So I need to pay Rs 34709 from first month. Say bank has disbursed 5lacs on 1st month. So in this case, 34709 will be divided to cover 4333(interest) and 30375(principal). This is the case where I have not parked any surplus money in maxgain a/c. Correct?

        2. Now say for the above scenario, I park 5lacs in the maxgain a/c. Now also I need to pay 34709. As per your explanation, 30375 will go for principal repayment. And 4333 will be added to my maxgain a/c making the surplus amount 504333. And the next month’s interest outgo will further reduce because of the increase surplus amount. Do you mean so?

        3. Cant the 4333 be used in any way to prepay the principal amount?

        4. As I understand, when I take a loan, a Loan Account is created. If I opt for Maxgain then a Maxgain account will also be created. In addition, I will have a SBI savings account. So in total I will be having 3 diff accounts with SBI. Is it so? SBI will link all these accounts by default or I need to place a separate request?
        My EMI will go to the Loan Account. Then how will the interest part go to Maxgain A/c in the case mentioned in point 2?

        5. I would appreciate if you can give an example of how the balances will look like in all my 3 accounts once my loan starts by taking the case mentioned in point2. This will help in getting better clarity.

        6. Why do you suggest a SBI savings account for EMI payment? Any problem if I use my ICICI salary account for the EMI payment using ECS facility?

        Thanks in advance!!
        Sandip

        1. Dear Sandip, instead of answering your query, I w’d like to know from you, if the loan is a normal home loan & disbursal is done just 5L Rs. yet you are paying full EMI, what ‘ll be the break up of EMI & the actual adjustment of interest & principal?

          Thanks

          Ashal

          1. Dear Sandip, here are some answers for your queries.

            1. Say, I have taken a loan of 35lac@10.4% and I opt to pay full EMI from month1. So I need to pay Rs 34709 from first month. Say bank has disbursed 5lacs on 1st month. So in this case, 34709 will be divided to cover 4333(interest) and 30375(principal). This is the case where I have not parked any surplus money in maxgain a/c. Correct?
            Yes is the answer.

            2. Now say for the above scenario, I park 5lacs in the maxgain a/c. Now also I need to pay 34709. As per your explanation, 30375 will go for principal repayment. And 4333 will be added to my maxgain a/c making the surplus amount 504333. And the next month’s interest outgo will further reduce because of the increase surplus amount. Do you mean so?
            Yes, is the answer.

            3. Cant the 4333 be used in any way to prepay the principal amount?
            You are already paying a huge amount as principal repayment, so where is the need to use this interest part for principal repayment?

            4. As I understand, when I take a loan, a Loan Account is created. If I opt for Maxgain then a Maxgain account will also be created. In addition, I will have a SBI savings account. So in total I will be having 3 diff accounts with SBI. Is it so? SBI will link all these accounts by default or I need to place a separate request?
            My EMI will go to the Loan Account. Then how will the interest part go to Maxgain A/c in the case mentioned in point 2?
            Your Max Gain Over draft Account is your home loan account. No separate home loan account is there. What ever calculation is to be done for home loan, it ‘ll be done in that Max Gain account. So Max Gain + SB, basically it ‘s only 2 accounts.

            5. I would appreciate if you can give an example of how the balances will look like in all my 3 accounts once my loan starts by taking the case mentioned in point2. This will help in getting better clarity.
            Please read my replies above in point 1,2,3 & you ‘ll come to know, how the Max Gain account ‘ll look like.

            6. Why do you suggest a SBI savings account for EMI payment? Any problem if I use my ICICI salary account for the EMI payment using ECS facility?
            Well you can use that ICICI SB account for your EMI payment, but do tell me, w’d you keep 2-3 EMI money surplus in that account or not? Please answer.

            Thanks

            ashal

          2. Rakesh_Gurgaon says:

            Dear Ashal

            I must compliment you on an excellent thread.

            I have a few clarifications regarding SBI home loan

            1. Is there any additional interest rate for SBI Max Gain over normal SBI loan (10.25%/10.4%)?

            2. Say i transfer a 35L loan from another bank to SBI Max Gain @ Rs 42,640 EMI for 12 years
            If next month, i park Rs 10 Lacs then will the EMI reduce (to approx Rs 30564 on a Rs 25 L principal outstanding) or the EMI will remain the same and the loan tenure will reduce?

            3. My cousin is planning to take a SBI loan for an under construction property – with a construction linked payment plan.
            Sanction loan amount = Rs 25L (80% of property value)
            The construction of the property has just started and is likely to take 4 years

            SBI has informed him that they will give him a moratorium of 18/24 months in which they will charge him only interest on disbursed amount.
            But after 18/24 months, they will charge him full EMI (Principal+Interest) on the SANCTIONED amount of Rs 25 L even if only 15 Lacs (for eg.) would have been disbursed
            Isn’t this unreasonable. How can they charge EMI on an amount not disbursed?

            4. Can my cousin take a Maxgain loan for this under-construction property?

          3. Dear Rakesh, here are answers for your queries.

            1. Is there any additional interest rate for SBI Max Gain over normal SBI loan (10.25%/10.4%)?
            The answer is No. The ROI is same for normal home loan as well as Max Gain.

            2. Say i transfer a 35L loan from another bank to SBI Max Gain @ Rs 42,640 EMI for 12 years
            If next month, i park Rs 10 Lacs then will the EMI reduce (to approx Rs 30564 on a Rs 25 L principal outstanding) or the EMI will remain the same and the loan tenure will reduce?
            Please read again all the discussion. Neither term ‘ll come down not EMI ‘ll come down. The only thing is, due to your parked surplus, the interest outgo on your loan ‘ll be lower than normal home loan.

            3. My cousin is planning to take a SBI loan for an under construction property – with a construction linked payment plan.
            Sanction loan amount = Rs 25L (80% of property value)
            The construction of the property has just started and is likely to take 4 years
            SBI has informed him that they will give him a moratorium of 18/24 months in which they will charge him only interest on disbursed amount.
            But after 18/24 months, they will charge him full EMI (Principal+Interest) on the SANCTIONED amount of Rs 25 L even if only 15 Lacs (for eg.) would have been disbursed
            Isn’t this unreasonable. How can they charge EMI on an amount not disbursed?
            Please read the T&C of the loan agreement. I can not say blindly anything with out checking your papers.

            4. Can my cousin take a Maxgain loan for this under-construction property?
            Yes is the answer. Actually he should opt for a Max Gain home loan.

            Thanks

            Ashal

  471. S_123 says:

    Hi Ashal, I have taken a home loan from SBI 3 years back (scheme was Easy home loan). I did not know about Maxgain that time. Now I would like to take Maxgain. Is it posible? How can I get it?

    1. Dear S_123, the change is possible but for that you w’d have to pursue your case with your branch as well as RACPC. So start doing it.

      Thanks

      Ashal

  472. jegan r says:

    Hi Ashal,

    Thanks for the reply..I will proceed with changing the plot in my name..After changing the name,While taking the loan if i add my father (just to increase the loan eligibility) as co-applicant in the loan,whether i can get 100% tax ememption ?

    Bcoz anyway my father doen’t require tax exemption as his salary is not coming under taxable income..So shall i claim 100% of tax exempt ? Or it should work always as 50-50% if there is a Co-Applicant ?

    1. Dear Jwegan r, here are the answers for your queries.

      After changing the name,While taking the loan if i add my father (just to increase the loan eligibility) as co-applicant in the loan,whether i can get 100% tax ememption ?
      Yes, as you are the sole owner of the house in question, the tax benefit ‘ll be to you.

      Bcoz anyway my father doen’t require tax exemption as his salary is not coming under taxable income..So shall i claim 100% of tax exempt ? Or it should work always as 50-50% if there is a Co-Applicant ?
      As he is not co-owner in the property, he can’t claim tax benefit. So you should claim all the benefits.

      Thanks

      ashal

  473. Prashant D says:

    Dear Ashal,

    I have funds to the amount necessary to close my SBI Maxgain loan account. I had a few questions regarding the closure process.

    1) The loan is in joint name of me and my father. Do both of us need to physically go to the branch to apply for the loan closure or van I get the signature of my father and just go myself? I ask this because the branch where my home loan is present is very far away from my home.

    2) Is there any prepayment penalty? I guess sometime in 2010, RBI had drafted a rule that no banks are supposed to charge the prepayment fees. Is that true?

    3) When I opted for the Maxgain account, SBI had insisted for a insurance on the property. The total premium that I paid was around 15,000. If I close the loan account, will the premium amount be refunded to me on a pro-rata basis (ex – If my original loan was for 20 years and I prepaid the loan in 5 years, will I get a refund on the insurance premium for the remaining 15 years)?

    1. Dear Prashant, here are the answers for your queries.

      1) The loan is in joint name of me and my father. Do both of us need to physically go to the branch to apply for the loan closure or van I get the signature of my father and just go myself? I ask this because the branch where my home loan is present is very far away from my home.
      As it’s a Max Gain home loan, why do you want to close it? May I know the reason?

      2) Is there any prepayment penalty? I guess sometime in 2010, RBI had drafted a rule that no banks are supposed to charge the prepayment fees. Is that true?
      As on date no penalty is there on preclosure of your home loan.

      3) When I opted for the Maxgain account, SBI had insisted for a insurance on the property. The total premium that I paid was around 15,000. If I close the loan account, will the premium amount be refunded to me on a pro-rata basis.
      Yes the amount ‘ll be refunded on the pro rata basis.

      Thanks

      Ashal

  474. Dear Sarvesh, apart from contacting your branch from where the application was moved for your home loan, there is no alternate channel to track the application progress.

    Thanks

    Ashal

  475. Sarvesh Sood says:

    Hi,

    Is there a way, we can track our SBI loan process?

  476. jegan r says:

    Hi Ashal,

    One more thing…I already asked