SBI Maxgain interest rate issue

POSTED BY asra_ankit ON September 25, 2014 7:42 pm ONE COMMENT

I have taken a SBI Max gain home loan of Rs 35L in Jan 2013 at a interest rate of 10.15%. After that base rate got increased and my current interest rate hiked to 10.4.

SBI later declared that its home loan rates for up to Rs 75 lakhs have been reduced to 10.1% p.a if there is a woman borrower involved and for other borrowers it should be 10.15 % p.a. with effect from 20 Dec 2013.

As I understand SBI maxgain is floating interest rate and they charge 15 bps above the current base rate which is 10%. If this is correct then they should reduce my interest rate from 10.4 to 10.15 % (10% -base rate + 15 BPS) with effect from 20 Dec 2013 as max gain is floating one and their current base rate is 10%.

Regarding this I made a complaint to RACPC, Pune and I got the below ans:

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Dear Sir,

State Bank of India has declared new interest rates for home loans sanctioned on or after 20.12.2013. The option now available to you is to avail our one time switch over option on payment of fee of 0.56%of the Drawing Power. i.e.Rs.19364/-.

If you propose to avail this option your interest rate will be @10.15 p.a.and if the coborrower is woman and her name is at first place in the agreement for sale or sale deed then the interest rate will be 10.10% p.a..

The option letter is attached here with.

You need to submit

1. Copy of Index II in case woman borrower at first place in the said agreement.

2. Your no objection to deduct switch over fee from your home loan account.

Regards,

Asstt General Manager

RACPC II PUNE

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I am not convinced with his reply because of 2 reasons:-

– I am not asking for a switch its them only who has reduced the base rate. So why should I pay switch over fee.

– Floating means “If base rate increases , interest rate will increase and if base rate decreases interest rate will decrease.

Please let correct me if misunderstood anything.

One reply on this article “SBI Maxgain interest rate issue”

  1. shankaranand says:

    Your home loan agreement was for base rate + o.4%. Base rate was 9.75% when you availed the loan. Hence your rate was 10.15% when you took the loan.

    Base rate today is 10%. Hence your rate today is base rate+0.4% = 10.4%

    SBI is offering loans today at base rate + 0.1% for women and base rate + 0.15% for men.

    Your home loan rate is according to the terms and condition under which you got the loan, which is base rate + 0.4%. Today it is base rate + 0.1 or 0.15. Thats all.

    Your rate will reduce or increase only if base rate changes. But it will always be base rate + 0.4%.

    If you want to switch over to new scheme, you need to pay 0.56% of the outstanding principal.

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