Query on SBI Maxgain surplus amount

POSTED BY MILIND SARAF ON February 6, 2014 4:19 pm COMMENTS (8)


Dear Ashal

As you told me earlier that,

if after  2/3 years of loan repayment , if i park the surplus amount in maxgain which is equal to my outstanding loan amount, then

1) whether my EMI will be same or will it get reduced?

2) If surplus amount = outstanding loan amount  then  whether 100% emi will go to towards principal amount ? in this case my tenure should be reduced.

kindly advice



8 replies on this article “Query on SBI Maxgain surplus amount”

  1. ashalanshu says:

    Dear Nsabhayankar, many a times branch staff says few things either due to ignorance or some times due to no interest to help you or do your job. Please do note in case of Max Gain, once the AB is equal to DP, merely the interest payment becomes zero. It does not mean that provisional and final certificate mentioning just the principal repayment can not be given. Practical solution to this problem – transfer few hundred or just a thousand Rs. from Available Balance into a SB account. Now as per the branch staff, loan is not repaid,hence demand your certificate. Once the certificate in your hand, put back the amount into Max Gain. As simple as that.



  2. nsabhyankar says:

    It gets interesting if you park surplus amount equal to the loan outstanding!

    The bank says that the loan is closed so you won’t get an interest and principle certificate. However, the drawing power (DP) is supposed to reduce each month as the EMI is paid. So, the EMI continues, reduction in principle (DP in case of MaxGain) continues but not the loan!

    I can understand the interest paid being zero but how come they say no to mentioning the principle component in the certificate?

    If the customer can anytime withdraw the surplus amount, how can the loan be treated as closed? The bank doesn’t provide a closure certificate for sure!
    Is the surplus amount treated at par with partial pre-payment?

    As Mr. Viren has mentioned, the credit in MaxGain has nothing to do with the principle component. It just saves you money on the interest outflow. In that case, the loan should not be closed. it is being serviced only with no interest being charged.

  3. ashalanshu says:

    Dear Viren, valid point. SBI ‘ll not allow withdrawal during partial disbursed state of loan.



  4. ashalanshu says:

    Dear Milind, let’s say your as on date DP is 22L Rs. and your Available balance is also 22L Rs. In this case, your interest outgo ‘ll become zero but the interest part of your EMI ‘ll not be adjusted towards DP. it ‘ll add up into your existing AB and thus your AB ‘ll cross the DP amount. Your loan term ‘ll also remain same.



  5. Credexpert says:

    Dear Mr. Saraf,

    If after 2-3 years of loan repayment you park a surplus amount which is equal or exceeding your outstanding loan amount, then effectively your loan will stand closed, unless you withdraw funds again.


  6. Viren Phansalkar says:

    Hello Milind,

    For your query:
    1. If the loan is completely disbursed, why wait for 2-3 years? You can start parking excess amount immediately. I did that.
    2. EMI will never reduce if you park excess money in OD account
    3. If surplus amount = loan amount, your principle component still remains same. The excess amount would be credited to your OD account.

    The equation could be represented like this:
    EMI = Principle + Interest + OD account credit

    In above equation, EMI and Principle component remains same. If you park surplus in your OD account, your Interest component would go down. However, to balance the equation, your OD account credit would increase.

    In short, the amount you save from interest out go to bank, would be credited to your OD account and principle and EMI or for that matter duration of loan would remain same.

    Ashal can correct me if I am wrong.

    Viren Phansalkar

    1. MILIND SARAF says:

      Dear Viren
      thanks a lot for simple elaboration. My loan is not fully disbursed, mine is under construction site in pirangut pune

      1. Viren Phansalkar says:

        Hello Milind,

        If your loan is not yet completely disbursed, you have to be little careful while parking extra money in OD account.
        In this moratoriam (or pre-full disbursement period), SBI would accept excess amount and would deposit it in OD account, however, they would not allow you to remove the excess cash unless there is full disbursement of loan. So better deposit only that much amount, which you are sure you would not need until full disbursement of you loan.

        Note: I have not done this. Mine was complete disbursement at go. So I am not 100% sure. You have to ask someone specific to this way.

        Viren Phansalkar

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