6 replies on this article “SBI Home loan – maxgain : Linkage with Base Rate over the tenor of the loan”

1. ashish says:

   September 9, 2012 at 11:10 am

   Dear Ashal,

   that’s great, now I’m clear.

   One direct question.. Do you think it is good idea to take SBI maxgain home loan as Interest rate is 0.25% above Base Rate. Do we have something better ?

   Also, I understand old SBI customers are paying higher interest rate than 10.25%.. how true is this and if yes why ?

   I’ve seen many reply of you about maxgain advantage.. so I’m mostly aware f it.

   Regards
   ashish

   Reply
2. ashish says:

   September 9, 2012 at 11:09 am

   Dear Ashal,

   that’s great, now I’m clear.

   One direct question.. Do you think it is good idea to take SBI maxgain home loan as Interest rate is 0.25% above Base Rate. Do we have something better ?

   Also, I understand old SBI customers are paying higher interest rate than 10.25%.. how true is this and if yes why ?

   I’ve seen many reply of you about its advantage.. so I’m mostly aware f it.

   Regards
   ashish

   Reply
   1. Ashal Jauhari says:

      September 9, 2012 at 4:01 pm

      Dear Ashish, here is the answer for your query.

      The current spread of 0.25% above base rate is the least possible spread. so it’s the right time to lock this spread in our favor. As & when SBI ‘ll start reducing it’s base rate, you ‘ll get the benefit of reduction in interest.

      The old customers are paying higher rate due to higher spread from base rate. The same spread can be converted to current 0.25% spread by paying a one time conversion fee of 1% of loan amount + service tax there on.

      Thanks

      Ashal

      Reply
3. ashish says:

   September 8, 2012 at 7:14 pm

   Dear Ashal,

   thanks for clearing my doubt.

   may i know what is relation between base rate & RBI lending rate(or something related)..

   what happens when we hear RBI has reduces interest rate ? (say if RBI cut interest rate by 1%, what will be new base rate ?.. is it only a decision of SBI to change base rate or not ?

   I came to know, Banks do not reduce interest rate for existing customer in case of RBI rate cut by same amount. However for new customer, they give loans on lower rate..

   Regards
   ashish

   Reply
   1. Ashal Jauhari says:

      September 8, 2012 at 10:27 pm

      Dear Ashish, the RBI rate, you are referring to are given below.

      1. Repo Rate – It’s the rate at which banks in India borrow money from RBI.
      2. Reverse Repo Rate – It’s the rate at which, banks park their surplus money with RBI.

      Any reduction by RBI in the above rates, indicates that the over all rates in the economy are going downwards.

      So in a correlation, as & when RBI ‘ll reduce it’s rate, other banks ‘ll follow the path & ‘ll reduce it’s Base Rate.

      Thanks

      Ashal

      Reply
4. Ashal Jauhari says:

   September 8, 2012 at 5:43 pm

   Dear Ashish, The base rate is fixed by SBI. In future, this Base rate may go either way, Up as well as down. We do not know precisely which way it may go but looking at the present situation, upward movements seems unlikely & downward one moves very likely (just 2 days ago, deposit rates were slashed by SBI).

   All over the term of your loan, this spread ‘ll remain there i.e. base rate + 0.25% ‘ll be your actual loan rate.

   SBI may change Base rate but can’t change this spread with out your consent.

   RBI does not fix this base rate.

   Thanks

   Ashal

   Reply

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