POSTED BY January 11, 2013 7:50 am COMMENTS (7)

ONHi

I have max gain and my outstanding loan amount is 8 L. I have accrued some cash to close th loan. But, Currently I am outside India and hence, personally go there to branch and close the loan. Is it possible to park outstanding amount in Max gain and request the bank not to take EMI everymonth. ?

Thanks in Advance,

Kumar

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Dear Ashal,

Now I am confused.

Consider this:

I have an outstanding loan of 10 lakhs. I suddenly get 10 lakhs in cash and deposit that in my OD account. My EMI is 50,000 every month. EMI usually gets deducted from my salary account in XYZ bank.

Now that I have deposited 10 L in the OD account, I expect the EMI to be deducted as usual i.e., 50,000. And since there will be no interest component, this 50,000 is to be adjusted against the outstanding principal. Hence after this EMI deduction my outstanding principal should be 9.5L right? Am I missing something here?

And once my principal outstanding becomes 9.5L, is there any difference if I maintain 10L in my OD account or withdraw 50,000 and maintain 9.5L in the OD account? As long as my a/c balance in the OD a/c is more than or equal to the outstanding principal, it should be the same, right?

Kindly clarify.

Thanks,

Shankar

Dear shankaranand, if your surplus amount is equal to outstanding loana balance, your interest outgo ‘ll become zero. Now this does not mean that ful EMI ‘ll go for principal adjustment. Principal adjustment ‘ll be done as per your loan amortization schedule. the remaining part of EMI which is effectively the interest part ‘ll remain as surplus & you are free to withdraw this surplus on mly basis.

Thanks

Ashal

Ashal,

An extension to Mr.Kumar’s question

If my outstanding is 6L and my OD a/c has 6L as of today and my EMI is 50,000. After the next EMI my outstanding would be 5.5L. So it doesn’t matter if I have 5.5L or 6L in my OD a/c right? It’s the same as long my OD balance is equal to or more than the outstanding loan balance?

Thanks,

Shankar

Dear Kumar, let me answer it. Once you matched the surplus amount to your O/s loan amount into Max Gain. the interest outgo ‘ll become zero. The EMI” ‘ll continue as usual. The interest part of your EMI ‘ll be available to you as surplus. Why do you want to close the max Gain account?

After transferring the surplus amount to match with your existing o/s loan amount, you can withdraw that surplus interest every month, that’s it.

Thanks

Ashal

That’s what my answer was too. Why should they stop taking EMIs? They will take the same EMI amount, but the whole EMI amount will be principal and there won’t be any interest component.

f your EMI is Rs.50,000, your outstanding loan amount after the next EMI will be Rs.6.5L. It will be Rs.6L next month, 5.5L the month after and so on.

hi

my outstanding loan is 7 lakh. if I move 7 lakh to my max gain account will the bank still take emi s every month? that was my question.

I don’t understand this. Why should the bank not take the EMI? I believe they will take the EMI and reduce the outstanding loan amount by the same amount. Just that they will charge you no interest since you have the amount equivalent to the outstanding loan amount in the OD account.

If your EMI is Rs.50,000, your outstanding loan amount after the next EMI will be Rs.7.5L. It will be Rs.7L next month, 6.5L the month after and so on.

Am I missing something? Experts correct me please, if I am wrong.