POSTED BY ON January 23, 2012 3:11 pm COMMENTS (986)
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
Should I invest money in PPF or keep in OD account. Which will give me better returns?
PPF would be a better choice !
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
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
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
Hi Vinod,
I too have the same problem. Its showing cash credit AC instead of OD account. Any leads here would be helpful.
Practically, the extra amount that you deposit in this account is treated to be deposited in your home loan account resulting in lowering the principal amount resulting in lowering the interest chargeable on the home loan. The only difference is that it is not considered to be permanent home loan repayment but as a temporary deposit. This amount deposited is treated as an add on overdraft account. You can use it as an ordinary account. You are given a checkbook which can be used like in case of a saving account or current account checkbook. You can use for transferring to any third party account including your own saving account. However as far as its ATM is concerned, it must be noted that when you use this ATM card in your own Bank ATM it will be treated as normal ATM of Saving account but when it is used in another bank’s ATM, it will be charged as an overdraft account and not as a savings account.
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. 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.
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?
Sorry, we are not clear on this at the moment !
which bank is this ?
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?
Is there an process where an old loan will automatically get converted from base rate to mclr regime without any switching fees?
No, there is nothing like that
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.
Sorry I am not clear about SBI maxgain that much.
yes, it will be on outstanding amount
Check this link…
http://emicalculator.net/wp-content/uploads/SBI-MaxGain1.png?b2624e
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.
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.
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
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
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
Its not a straight forward calculation here. Please ask them for explaination on how the dues exist and why ?
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
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
When exemption under 80 C is taken for Stamp duty exemption ,whether stamp duty certificate is to be submitted with it for approval.
No , but you need to keep it at your end, because you might require it later if there is any tax enquiry !
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.
the stamp duty and property is on the name of three people me , my wife and father
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
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.
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 ?
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
No , unless the EMI is paid from the account and the house is in name of the person, the person cant claim tax benefits
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.
No , unless you pay from your pocket, how can you claim it … ?
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.
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.
Yes, thats true !
This article explains it very simply.
http://emicalculator.net/sbi-maxgain-why-should-you-choose-this-home-saver-loan
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?
Yes they will do that !
Hai
Pl let me Know about the IT Exemption for Interest portion and Principle In SBI Maxigain Home loan
What exactly you want to know in that?
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 ?
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
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
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?
Before Mar 2019
thanks
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?
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
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%
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 ?
It should be settled against Principle !
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
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
Hi Amit
Its a complicated calculation, you need to contact SBI only for this
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..
I think you should not complicate it to this level
I am not sure what help you need ?
Yes, this is a very nice way to extract the maximum benefit out of the Maxgain account. You should do this asap.
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?
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
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
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
Please check your Maxgain Suraksha account details as well. May be the amount transferred to your MXGAIN Suraksha account.
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.
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
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.
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.
HI…….
I have SBI HL I want know whether my HL a/c is maxgain or term loan how found about it,
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
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?
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?
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.
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.
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.
Thanks Manish,
I had sent a mail to the bank and they refunded the amount.
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?
Hi Nikhil
Seems like the answer for this can be given by bank only !
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
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)?
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
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
Thanks Ashal!
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?
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
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.
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
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.
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
Thanks Ashal for your prompt response and advice, will try to get MP extended.
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
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
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
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.
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.
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.
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
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 ?
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
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
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 ?
I think this is a very good idea . Go ahead .
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?
Dear Hima, please approach to your loan serving branch for the same.
Thanks
Ashal
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?
Dear Reji, yes NOC as well as all the original docs are the things you need to check.
Thanks
Ashal
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
Dear Umesh, can you mailme your account statement in exl. format?
Thanks
Ashal
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
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.
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
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??
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
Dear Tarun, can you mail me your account statement over my personal mail id?
Thanks
Ashal
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.
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
@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.
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
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
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
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.
Dear Venugopal, yes Stamp duty and registration charges paid in the year of registration are available for section 80C benefit.
Thanks
Ashal
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
Dear Parit, the ROI on your SBI Max Gain is already low.
Thanks
Ashal
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
What about income tax liability on FD interest?
Thanks
Ashal
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
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
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
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
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
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.
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
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
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
Hi Ashal,
I have already availed a loan from SBI. how can I get to know my cibil score?
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
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
Dear Sunny,how about filing on your own?
Thanks
Ashal
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
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
Thanks Ashal! I changed my ROI, it is not possible to this from the branch. You have to visit RACPC.
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
Hi ,
I missed telling that , its a self constructed independent house (Got the construction done by hiring labours/labour contractors ).
Dear Chandan, please file a demand note to SBI to release the remaining amount to pay out to your contractors.
Thanks
Ashal
Dear Chandan, your builder should raise the demand for final disbursal if construction is over.
Thanks
Ashal
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
Dear Prateek, your loan is partially disbursed or fully disbursed?
Thanks
Ashal
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
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
15l
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
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
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?
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.
*In above it should be rate of interest & not rate of hundred
Thanks Roshan!
Dear Reji, any more query?
Dear Roshan, thanks for answering it.
Thanks
Ashal
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
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?
Dear Pankaj, the drawing power should come down from EMI repayment not from undisbursed loan amount.
Thanks
Ashal
Please tell me what to do?
Dear Pankaj, contact AGM retail Loans of your RACPC and discuss your issue with him/her.
Thanks
Ashal
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?
Dear Mehul, what’s your 2nd question?
Thanks
Ashal
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
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
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
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
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
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
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
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
Dear Roshan, the interest is calculated on daily basis from 1st to last day of the month in question.
Thanks
Ashal
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
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
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
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
Thank you Ashal for your useful guidance.
Rohit
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
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
Dear Roshan, it’s overdraft.
Thanks
Ashal
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
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
Dear Bala, thanks for the update. Let me check my personal mail and ‘ll answer you there.
Thanks
Ashal
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
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
Dear Bala, I confirm the receipt of the personal mail. Please wait for my personal reply. 🙂
Thanks
Ashal
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
Dear Shikhar, please contact your AGM in RACPC for clarification on the matter.
Thanks
Ashal
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
Hi Ashal,
I have shared excel. Please help on this.
Thanks,
Dear Rohit, I confirm the receipt of your mail. Please wait for my detailed reply over e-mail.
Thanks
Ashal
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.
Dear Jatin, please opt for rate switch over post final disbursal.
Thanks
Ashal
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)?
Dear Rohit, the EMI credit is called Deposit transfer.
Thanks
Ashal
What is DEPOSIT TRANSFER in max gain
i m giving info because i have two max gain accounts
i m giving info.
interest in od account is counted on per day basis.
Dear Lucky, are you asking or giving info? Yes the home loan in Max Gain is on daily reducing balance.
Thanks
Ashal
i m giving info because i have two max gain accounts
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
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
Dear Hitesh, can you share your loan account statemwnt in exl. with me?
Thanks
Ashal
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
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
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.
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
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
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 ?
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
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
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
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.
Dear Bhavin, please contact your loan serving branch for actual principal adjustment from your EMI.
thanks
Ashal
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
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
Dear Msherikar, please opt current account in ICICI netbanking.
Thanks
Ashal
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
help…Please answer …my above query
Dear Aarav, due to positive compounding, FD ‘ll provide better return over Max Gain in the long run.
Thanks
Ashal
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
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?
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
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.
Thanks a lot Ashal!
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
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.
What is debit interest in SBI Max gain
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
Dear Dhruv, Relax. I do have several examples with me for parking money in MG account before final disbursal.
Thanks
Ashal
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
Thanks Ashal.
Dear Dhruv, yes the surplus parked by you ‘ll help to save interest outgo. So you may park the extra money.
thanks
Ashal
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
Dear Deepak, Please wait for my reply again as usual. 🙂
thanks
Ashal
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
Dear Knssiva, no jobloss is not covered.
thanks
Ashal
Dear Kulkarni, thanks to you that a lot of people got benefited from this thread.
thanks
Ashal
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
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?
Dear Bala, yes your understanding is correct.
thanks
Ashal
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
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
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
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
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
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
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
Just to confirm. Parked money gets interest and made as available balance to withdraw. No effect on Principal part.
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
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
Thanks for replying..You mean i will have to sell on guidance value :(..or buyer should not take the loan from SBI.. 🙂
Dear Bunty, the taxation point ‘ll come into angle when you ‘ll sell it. 🙂
thanks
Ashal
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
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..
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.
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
Dear Parag, please check for Moratorium period if any with the loan serving branch. Technology wise, I already answered your basic query. 🙂
thanks
Ashal
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.
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?
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
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
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
Thanks Ashal.
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
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
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.
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
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
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
Hi,
I did not see such problem with RACPC Koramangala.
As Ashal was mentioning, ask them to show the copy of RBI circular
-Kariyan
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
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
Hi Kariyan,
RACPC Basavanagudi Branch, Banagalore. Already contacted bangalore AGM, but no avail. What can I do next? Awaiting your suggestions.
Which RACPC branch is doing like this?
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.
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.
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.
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
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
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
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
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
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
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
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
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
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.
Dear Hemank, please contact your loan serving branch to get ‘view only’ netbanking rights.
thanks
Ashal
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
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
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
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
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
Thanks Ashal for kind reply.
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
Dear Ashal,
can I give post dated checks of OD account for car loan?
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
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
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
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?
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..
Dear Kartik, the tax benefit calculation on interest ‘ll change on the basis of ownership.
Thanks
Ashal
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.
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?
Dear Kartik, the property in question is jointly owned or single under your name?
Thanks
Ashal
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!!
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.
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
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
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
Dear Chandan, the interest ‘ll be chaged only on the disbursed amount i.e 3L Rs.
Thanks
Ashal
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
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 ?
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
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…
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
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…
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
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
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
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.
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
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.
Dear Santosh, glad to know that now you are able to transact in full for your MG account.
Thanks
Ashal
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
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
Thank you very much for clarifying.
Regards
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
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
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
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
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
Thanks Ashal!
My transaction rights are enabled now and I could transfer back to my saving account from OD.
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.
Dear Parag, yes the saving ‘ll be 1.25L Rs. Please go ahead for rate conversion.
Thanks
Ashal
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
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
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
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
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
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
Hi Ashal,
Suppose if i opt for SBI E-sheild policy, will it be linked to my home loan account ?
Thanks,
Hemank
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
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 ?
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
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
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
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
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
Dear Manubhai, remember RTI is key in your case.
thanks
Ashal
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
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.
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
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..
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
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
Dear Madhan, yes you ‘ll get the benefit of reduced ROI in the month of March’s calculation.
Thanks
Ashal
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) ?
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.
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
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
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.
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
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.
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
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.
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
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
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
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
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
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..
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
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
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
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
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
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
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
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?
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.
Dear Parag, can you mail me your own calculations as well as bank statement?
Thanks
Ashal
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
Dear Bharat, please contact dear Manish to get my mail id.
manish@jagoinvestor.com
Thanks
Ashal
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
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
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
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.
Dear Prateek, yesw once the possession is there with you, you can withdraw your own surplus amount either in part or full.
Thanks
Ashal
Thanks Ashal,
But that amount I can withdraw after possession right?
Dear Prateek, no, before possession, you can not withdraw amount from MG account.
thanks
Ashal
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
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
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
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).
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!
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?
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
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?
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
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???
Thanks Ashal for clearing my doubt.
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
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
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??
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
Right now in my home loan page, the applicable interest rate is shown as 11%. So it looks like base rate based right?
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
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?
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
Thank you Ashal for the information 🙂
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
Dear Gaurav, please check your drawing power to know the debit of principal amount.
Thanks
Ashal
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
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
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
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
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
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
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
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
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 ?
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?
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
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.
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
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.
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
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.
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
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.
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
Yes. Ashal, It has been disbursed fully. Still it is showing me same problem.
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
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 ?
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
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 ?
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
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.
Dear Pradip, have you availed full disbursal of your loan or not?
Thanks
Ashal
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
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
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) ?
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
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
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 ?
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
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
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
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?
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
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
Thanks Ashal for confirming my doubts.
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.
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
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
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
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
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
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
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
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
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
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
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
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
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?
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
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
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.
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.
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.
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
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
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.
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
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
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
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
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
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?
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
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
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.
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
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
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.
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
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
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
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.
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?
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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.
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%
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?
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..?
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
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?
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
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
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
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
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
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
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
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.
Dear Prashant, please ask for transaction rights for your MG Acct.
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.
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
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?
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
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
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.
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
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.
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
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
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
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
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
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
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
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
Dear Ashish, I hope that from dear Sri_P’s reply you are able to figure out your lihne of action.
Thanks
Ashal
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
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
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
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
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.
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 !!
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.
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?
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?
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 ?
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
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 ?
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.
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
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.
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
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.
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
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”
Dear Ram,
STandard Chartered as well as HSBC are also offering max gain like product.
You may try there.
thanks
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?
Dear Amaresh, please download your acct. statement from SBI site in excel format & than calculate manually your interest benefit.
thanks
Ashal
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?
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
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
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..
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
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.
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.
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
THANKS A LOT ASHAL. I WILL APPROACH RACPC CENTER FOR THIS AND WILL CONTACT YOU IF ANY
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…:-)
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
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
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
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
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
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
Dear Ram, please go for switch over to SBI MG.
Thanks
Ashal
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.
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
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?
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
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
Dear Amitbhole, I’m not an SBI staff member, so please follow the info provided to you by SBI people.
Thanks
Ashal
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.
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
Hi Ashal,
As per my knowledge to claim for the principle amount in 80C we need possession certificate. Am I correct?
Amit Bhole
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
Ashal,
I think possession of house is pre condition even for 80C claiming Principal repayment benefit.
Can somebody else pls confirm?
Thanks,
Viswa
Dear Viswa, please check the official website of Income Tax of India.
Thanks
Ashal
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.
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
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.
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
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
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
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
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.
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
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.
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?
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
Hi,
To access Max gain account online, do we need SBI savings account?
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
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