Query regarding SBI MAX Gain and pre EMI interest

POSTED BY sanjeevc ON December 31, 2012 1:36 am COMMENTS (5)

Hi,

I am planning for a loan from SBI upto 30L under max gain scheme,
The person concerned at the site informed me that EMI payment shall start after 18 months, before which I shall have to pay only interest (pre emi Interest) on the demand cleared by the bank.
So
if 5L is the amount cleared by SBI as per demand, will I pay only 4150/- month as interest ? and after 18 months actual EMI 28951 (Principle + Interest)

Is this understanding correct ?
Wont I end up paying extra interest for 18 months than I would have actually paid if EMI’s had started ?

Also he explained me the benefit of MAX Gain of parking of surplus amount, now shall I park surplus amount as soon as the 1st demand is cleared and I have to pay the 1st interest ??, If yes ? Kindly tell how will this benefit ?

OR I can only park surplus amount once actual EMI start after 18 months.

5 replies on this article “Query regarding SBI MAX Gain and pre EMI interest”

  1. agarg says:

    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 And before completing 2 years, I will ensure that I pay maximum of loan disbursed, so after 2 years, If I had withdrawn 22 L, I would have repaid 10L and will need to repay back 22-10=12 L. And I won’t need further 8 L disbursement as expect long gap in last few demands from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.

  2. sanjeevc says:

    Thanks a ton, that helped clearing lot of doubts

  3. Credexpert says:

    Dear Sanjeev,

    Yes, your understanding is correct and No, you will not end up paying extra interest for 18 months. Banks usually charge Pre – EMI for the period where the full loan amount is not disbursed. However, if your cash flows allow you to start repaying the EMI instead of the Pre – EMI, then you can approach the bank and check if they allow the same.

    About parking the surplus amount, check with the bank if you are allowed to do that before your actual EMI starts. The advantage of this would be that you would pay a Pre – EMI on a lower amount since you have temporarily reduced the outstanding balance.

    Regards,
    Credexpert

  4. sanjeevc says:

    Thanks Ashal
    But Paying a Pre-Emi Interest is that an extra interest I am paying ?
    Also please let me know if my understanding is correct regarding the pre interest which I have to pay
    if 5L is the amount cleared by SBI as per demand, will I pay only 4150/- month as interest ? and after 18 months actual EMI 28951 (Principle + Interest)

  5. Dear Sanjeev, it’s your own interest, if you start paying full EMi from day one. In case it’s not possible due to any reason either from your side (your cashflow position) or from bank’s side due to moratorium, please opt for a top up into Max Gain for the amount which you do not require in between. this ‘ll help you to bring down your interest outgo.

    thanks

    Ashal

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