Is it worth converting to present spread in SBI MaxGain ?

POSTED BY Prashant Cool ON October 13, 2012 3:03 pm COMMENTS (10)

Dear All,

I have taken SBI MaxGain Home Loan of Rs. 28 Lacs.

My present ROI is 10.25% (9.75 + 0.50%) whereas current effective ROI is 10% (9.75 + 0.25%)

Is it worth to go for conversion to current spread of 0.25% instead of my spread of 0.50% by paying approximately Rs.12,000/- which is 0.56% of my outstanding amount of 22L ?

I can see that there will be difference of Rs.400/- in EMI if I opt for current rate.

Thanks in Advance.

10 replies on this article “Is it worth converting to present spread in SBI MaxGain ?”

  1. Sundar says:

    the conversion fee for maxgain loan account is 0.56% or 1% of outstanding principle ? And wat is the procedure to make this conversion.?

    1. Sundar says:

      Guys yesterday, i converted to new interst rate by paying 0.56% of Drawing power amount. And this can be done as many times in future also if interest base rate goes down again. Also i requested to take the surplus amount 1 lac out of 1.5 lacs parked in OD account and credit it to the Principal/DP amount. It means 1 lac gone to principle and you cant withdraw it from OD account. Only 50k can be used for withdrawing.

    2. Hi Sundar

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

      Manish

  2. Dear Raja, drawing power in Max Gain loan is the actual outstading loan amount, so the conversion fee ‘ll be charged only on that amount.

    Drawing power ‘ll not reduce but the applicable interest rate ‘ll reduce & accordingly your EMI ‘ll be recalculated. that’s it.

    thanks

    Ashal

  3. raja says:

    I need clarification on the following:
    1. Drawing power will be same as the loan amount. Is this true?
    2. Are they reducing the drawing power after this conversion?
    If so, why? how do they decide this amount?

    thanks,
    Raja

  4. Manoj Kumar says:

    Dear Prashant,

    Thanks a lot for this valuable information !

  5. Manoj Kumar says:

    Hi Prashant,

    As I am aware the conversion fee would be 1% of the outstanding loan. However, you have mentioned 0.56%….

    “by paying approximately Rs.12,000/- which is 0.56% of my outstanding amount of 22L ?”

    Have you got any discount in conversion fee from SBI?

    Thanks.

    Manoj Kumar

    1. Prashant Cool says:

      Dear Manoj Kumbar,

      0.56% is clearly written on http://www.sbi.co.in announcement on the front-page right hand side.

      It says:

      Home Loan customers with floating/fixed interest rates higher than current rates can switch over to current rates after paying 0.56% fee, contact your nearest branch for details

      Regards,
      Prashant

      1. Praveen says:

        Prashanth,

        Q1 ) Are you sure it is 0.56% fee? Because when I contacted my SBI branch, they told me it is 1%.

        Q2) In the case of Maxigain home loan it is 1% of Drawing power for Maxgain Account not the out standing amount.

        Regards
        Praveen

        1. Prashant Cool says:

          Praveen,

          Q1 ) Are you sure it is 0.56% fee? Because when I contacted my SBI branch, they told me it is 1%.

          –> See the SBI website announcement section on front page itself and show the same to them. 🙂

          Q2) In the case of Maxigain home loan it is 1% of Drawing power for Maxgain Account not the out standing amount.

          –> This I am not aware.

          Anyways, Thanks to all for the replies. I got answer for my quesion from Ashal.

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