SBI maxgain how to reduce EMI amount by partly prepaying some amount ?

POSTED BY ympaithankar ON September 13, 2012 2:28 pm COMMENTS (36)

I have obtained SBI home loan of ~37 lakhs and I am having EMI of 41879k per month for 15 year’s.
I am thinking of how to reduce my EMI. I will have 6+ Lakh’s with me(in next 4-5 months) which I can deposit in OD(after completion of 1 years in march 2013) and ask bank to get that amount permanently deducted.As I don’t want to withdraw it. So my net principal amount will reduce to below 30L. If I freshly restructure/reprocess the LOAN for 30L in SBI MAX Gain only (paying 15,000K of fees if required) my EMI will come down to 33,000K per month. My question – Is that possible ??

SBI will allow it ? how to proceed ? what are other option as i dont want to change the bank.

Monthly burden of 40+K is too much. and Interest paying on higher amount surely will be high instead reducing principle amount will be good idea along with reduction in EMI keeping years to 14 years (instead of 15 years).


in simple work pay some lump-some amount and dont reduce tenure will it reduce  EMI?

36 replies on this article “SBI maxgain how to reduce EMI amount by partly prepaying some amount ?”

  1. Sumit Malhotra says:

    hi, evryone, i have taken 15 LK in jan 2014, now in dec 17 i want to repay of min amount of 2.5lk, is it good idea, or i should invest somewhere elese.

  2. Udayan Guha says:

    Hi Nitin,

    I’ve taken SBI Max gain HL on 2013 June for Rs. 12 L for the duration of 20 years whose EMI is Rs. 15997. Its interest was 9.95% floating then. There is a goof up by the bank official on the tenure of loan as the calculation of EMI is done based on 10 years while actual tenure is of 20 years. I recently discovered this. Today, I owe bank around Rs. 8L while I have a extra around Rs. 5L as my savings to spare and wondering whether or not to pay back.

    Few queries –
    Firstly, whether I should ask the bank to make the correction on tenure? If yes, how should I approach the bank ? If not, why not ?
    Secondly, how much should I pay back to the bank considering, I’m a salaried employee who is in 30% tax bracket and Home Loan is one of the ways to save IT ๐Ÿ™‚

    Thirdly, should I pay back entire 5 L to bank and try to get the interest rate reduced ? Or should I pay back a portion of HL, say 2.5 L and remaining 2.5L should I invest to save for my future?

    Could you please share your opinion here ?

  3. Shwetha says:


    I also have a Housing loan with SBI.Even I am not clear on the way it has been handled.
    1.If I park some amount in my Max gain account my interest gets calculated i.e Total Loan Amount less the amount in the OD Account and this in turn will reduce my interest?But I will end up paying same amount every month.
    2.I havea surplus amount and I do not want to keep in OD account and just want to pay off my housing loan how do I do?If I park the amount in my OD account it just reduces the interest amount and not the total EMI.
    Please help.


  4. vikas Rana says:

    can i reduce loan tenure under SBI max gain HL or can i fixed my surplus ammount of repayment directly in loan account if i never want to withdraw surplus amount.

    1. Your loan tenure will come down if you prepay the loan by some amount !

      1. Vipul says:

        Hi .. I have an SBI MG loan account .. and I am paying extra 12K EMI to reduce principle. Now I have accumulated some funds in OD account and want to part pay towards principle to bring down the overall outstanding principle amount (Limit or Drawing Power amount)

        What is the procedure to do this? I checked with SBI branch and was advised to do NEFT to OD account .. so I told the branch officer that I am doing NEFT every month which is going to Available Balance and not reducing the Limit. Then he asked to write a cheque toward my loan account and drop it in drop box. I donโ€™t think this is the right way. Can you please suggest how to go with this? Also I want to reduce EMI amount when making the part payment.

        1. Sorry we are not clear of this

  5. roshan says:

    I have some doubt related to SBI Max Gain prepayment. In SBI Max Gain account we can park our surplus amount and get benefit on interest calculation. Suppose I have some amount in my account say 1Lakh rupees and I don\\\’t need that amount and want to submit the amount against the Principle amount. How many times does SBI allows this? On some forums I came to know that it is allowed MAX 3 times during entire home loan tenure, is it correct? If you have any link which points to SBI official site to clarification on this would help better. I tried to look for it on SBI site but could not get satisfactory answer, hope you can help.

  6. Priyanka says:

    Is it better to prepay home loan in maxgain SBI or keep in OD if I have surplus funds?

    1. There is no straight answer to this. If you have cash crunch, then better park it in OD , else prepay

      1. Arvind says:

        Dear Manish Sir,
        Can You please explain this by taking some numbers to get clear idea for SBI Max gain home loan and its payment options , to reduce it better ways .

  7. preeti says:

    Do you mean to say that in letter we have to say that we are paying to reduce balance and they will do it? How many times will they allow? What is the minimum amount acceptable?
    Please reply.

  8. Preeti says:

    Hello Pankaj,
    Do we have to mention in the letter to use that surplus amount for reducing balance and then they will reduce the EMII? What is the minimum amount they will accept? 2 lacs is OK?
    what are the possible mistakes that we may do if we don’t communicate properly to them?
    Please reply.

  9. ympaithankar says:

    Guys I asked SBI officials infact had two three time gone to different SBI branches so that I get clear aunswer and the reply I got –
    ” SBI never reduces the EMI .. We will not reduce EMI at any cost . period ”

    ” Even if the base rapo rate cut by RBI and by SBI Home loans get restructure. Means they will reduce tenure and when crr increases they increase the loan tenure not changing the EMI.” They said it will difficult for them to keep changing the EMI amount every time crr is changes for each and every customer . I told them that in agreement its mentioned that tenure or EMI amount is subject to change with respect to base rate. Still those guys were rude and not ready to entertain me.

    They said I am free to switch to different bank but they will not reduce EMI. PERIOD.

    Monthly higher burden is something psychological and I just want to reduce that by paying 5- or 6L and reducing EMI and keeping tenure as it is.

    Can anyone tell me what to do ? anyone did that ? any better solution ? why they are reluctant to reduce EMI even though its mentioned in agreement.

    1. Rashmi says:

      SBI is telling different stories to different people based on what they are requesting. I requested them to reduce tenure and they started telling me that they can reduce emi and not tenure.

      By far they are great, only you will have to circle back with them patiently for a while and they will help you out. Dont lose your patience ๐Ÿ™‚

    2. Vivek says:

      Fully agree. I also interacted with SBI on this and had same replies ๐Ÿ™
      I think it’s unethical business!

  10. milin d says:

    i agree..
    as the point of closing nears, we may withdraw back from max gain to delay the tenure.

    “..the interest part of your Emi, โ€˜ll keep adding up into your surplus.”
    If it is so, even after the balance becomes zero, then it is further beneficial.

    one of my friend -employee of another bank (non-sbi), told me about closure.
    Need to check with SBI. If you/anyone else has already checked then fine.

    had read the ‘longest thread’ sometime back.

    To exactly understand & measure the benefit of re-structuring for EMI reduction (original question of this thread) compared to what i suggested (paying EMI from surplus funds), i’ll make two amortization tables and decide accordingly for my own loan’s decision.

    you already know it, it seems.

    1. Dear Milin, the restructuring of EMI ‘ll be possible only after adjusting a part of your surplus towards loan amount. This adjustment ‘ll kill your liquidity for that adjusted amount. If you are comfortable for let go of liquidity, you may avail the EMI reduction option.



  11. Dear Milin, if you are still in doubt, please read the largest & longest thread in the forum.




  12. Dear Milin, there is a marked difference between can be closed & actually closed. In case of MG home loan, if you have kept surplus balance matched with your drawing power, the EMI payment ‘ll continue & The loan ‘ll run to it’s full term. Yes in this case the interest part of your Emi, ‘ll keep adding up into your surplus.

    Yes as per your own understanding, if you want to close the loan at this stage, you can do so but in this case, your liquidity of the surplus amount ‘ll also be gone to adjust the outstanding loan balance.



  13. milin d says:

    “The money deposit or withdraw only impacts interest out go.”

    The interest is added every month end from the balance (outstanding amount increases).

    This means the balance of max gain account (the outstanding loan amount) will reduce faster as we keep depositing extra amount in Max gain a/c.

    Hence it will be zero sooner than earlier loan term, and at that time loan a/c can be closed.

    I have made above observations from my loan a/c statements.

    1. neha says:

      In case of Max gain HL, we can reduce loan term by prepaying loan amount? how many times we can prepay in Max gain if we continue to paying same EMI?

  14. Dear Milind, in case of Max gain the term
    remains same. The money deposit or withdraw only impacts interest out go.



    1. neha says:


      how can term remain same if your loan will be closed. i mean if i paying same EMI continuously, prepay some amount and ofcourse if it is Max gain, i can put some amount in my account to reduce interest. so all of above will help me to reduce my loan term/ tanuar?? m i correect???

      1. Yes, if you keep the same EMI !

  15. Dear YMPaithankar, in case you do not want to have liquidity of your money. Well it’s your choice. To bring down your EMI, just park those 6L Rs. in your Max Gain OD account. Then write an application, to your bank branch to adjust this surplus & recalculate your EMI for the remaining period. SBI people ‘ll do the remaining job.



    1. milin d says:

      you need not ‘pay some lump-some amount’, you can just keep the same amount in maxgain account.

      Since in maxgain the interest is charged only on outstanding amount it has same effect.

      To reduce EMI – you can withdraw some amount from maxgain a/c for some portion of EMI and pay the remaining.

      This will also fulfill your wish to to ‘not reducing the tenure’.

      Whenever you withdraw back from the surplus amount in maxgain, the tenure increase correspondingly.

    1. ympaithankar says:

      Akhtar i saw that link earlier but it doesnot say how to reduce EMI. (All they say is about benefits of OD and reducing principal amount and reducing interest on it ) . I want to reduce EMI from 41 K to 33K how to do that ? without switching bank and without increasing tenure from 15 to 20 or something like that

      1. Sethu says:


        why dont you do a part-payment and bring down the emi?

        1. srikanth says:

          if user pays part-payment, it will bring down loan tenure not an emi.
          @ympaithankar i am also finding ways to reduce my EMI of SBI MG account.

          1. Pankaj says:

            You can reduce EMI by giving written application @sbi branch. I hv done 2-3 times

            1. Chandan says:

              Hi Pankaj,

              Can you please let me know what kind of application we need to produce,

            2. Mehak says:

              What did you finally do? I am fed up understanding this loan

            3. Sai says:

              Is there a way to reduce interest rate by pre payment?

            4. You cant control interest rate !

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