SBI MaxGain Loan – OD account Outstanding Principal not adjusted

POSTED BY M ILANGO ON August 8, 2012 6:49 pm COMMENTS (26)

Dear Ashal,

First let me thank you and appreciate the efforts you take in clarifying various queries on the SBI MaxGain home loan. I learnt about your site today.

I have MaxGain loan for last 3+ years. I moved my Home loan from HSBC SmartHome Loan which is similar to MaxGain. One big difference I find in MaxGain is that the monthly interest is not calculated on the outstanding principle by adjusting the ‘extra’ principal from the EMI amount month-on-month. As I keep surplus money in my OD a/c, the every month interest varies and is debited by SBI on the last day of the calendar month by DEBIT INTEREST. My EMI date is 15th of the month. 

SBI adjusts the surplus money I park in the account for calcluating interest but not the benefit in Extra Principal that results out of reduced Interest. Could you clarify if SBI adjusts the Principal amount every month and subtracts the extra Principal amount before it calculates the next month interest. I used to get this benefit in HSBC’s SmartHome loan,  on daily outstanding which is also followed in SBI. But I don’t find SBI giving me the benefit of reducing the outstanding principal by extra principal amount from the EMI (due to lower monthly INTEREST, as result of surplus money in my OD a/c)

I can send snapshot of my DP Limit, Debit interest, EMI, if you want..

Thanks in advance,

26 replies on this article “SBI MaxGain Loan – OD account Outstanding Principal not adjusted”

  1. Amish says:

    SBI max gain account is a total fraud and most of the frauds in India are originating or linked to SBI. Interest certificate and repayments and principal outstanding do not match. Next bigest scam if investigated would be from SBI home loan departments.

  2. Ashish says:


    I was checking my interest paid certificate and found some discrepancy in repayment figures
    My EMI is 43722, so total repayment per year = 5,24,664
    Interest certificate for the year shows:
    Total principal repayment = 1,50,271
    Total interest repayment = 3,28,719
    Total repayment = 4,78,990

    However total of all EMIs = 5,24,664 !!!!
    Where is the difference amount (5,24,664 – 4,78,990) = 45,674 ???

    Any idea?

    Note: I have no money in MaxGain

    1. I guess only the bank will be able to trace down the exact issue for showing the different numbers.

  3. Vivek says:

    I have SBI maxgain amount. I pay an EMI of 37963 per month which amounts to an annual payment of 455556 Rs.
    But in my annual intrest certificate it shows that I paid an Intrest of 96000 and Principal of 68425 Rs. These two do not add up to 455556 Rs. I always park some amount in my Maxgain account. can somebody please explain why the EMI paid does not add up to the sum of Principal and Intrest.

    1. Sid says:

      I just calculated the same for my Max gain Account. I found that the Principal paid remains constant no matter what you put in your max gain account. This principal is subtracted every month from your Total Balance amount. Anything excess paid by you is accumulated in the OD account. Interest is only paid on outstanding.

  4. Naresh says:


    i have max gain account and in the last month i have paid seven lakhs to reduce the limit. It reflected in DP but in Interest certificate seven lakhs has not been considered for Principal repayment. Why is that?

    1. Hi Naresh

      This is very specific query which you should follow up with the concerned authority only. We wont be able to comment on that


  5. Amit says:

    Hi Ashal

    I have max gain account in the month of feb i switch to MCLR rate since there i’m seeing some discrepancies in my account….my drawing power was 34,40,233.00 and my emi got deducted as 36363( 25,832.00 as interest and 11,396.54(do not go into why emi is not = int + principle as my roi got changed) as principle ) but 11,396.54 came to available balance and did not reduce my drawing power it is still as 34,40,233.00. please help

    1. Hi Amit

      I am not clear on what is your question. Please repeat it with more clarity


    2. Dinesh says:

      Same happening with me.
      I will make this query bit simple.
      Debit interest each month is say Rs.20000 and EMI is Rs. 30000. That means we are paying Rs. 10000 extra. So in my opinion it should be adjusted in Principle(Drawing Pointer) but thats not happening. Drawing pointer remains same irrespective what amount you adds in OD account.

  6. Madan says:

    Hi Ashal,

    I wanted to know my outstanding principle for my Maxgain account, how to calculate this? Also I am not sure if my bank is crediting the amount to principle or not as the remaining amount after subtracting intrest from EMI is getting added in available balance.

  7. Venkat says:

    I took the SBI MaxGain Loan, After login into SBI net banking showing two types of account OD and Loan . If i want to repay the amount in net banking whether i have to transfer OD account or Loan account.

    Paying of OD account, the Interest will reduce ?

  8. Arun Gupta says:


    I have a question with regards to the monthly repayment of PRINCIPAL component, under SBIMaxGain. (I am unsure if this is the right thread for that though.)

    I took a loan of 30 Lacs. The full amount of Loan was disbursed at once in May-2013.

    I understand that on 12th of every month, the OD Limit of my MaxGain Account gets decreased; and the same amount is taken from the account. However, I am not able to understand how that principal amount for the month is calculated.

    For your reference, I have prepared a summary of principal repayment for the FY 2014-15, which is as under:

    Date Principal Amount Repaid
    12-Apr-2014: 7,413/-
    12-May-2014: 8,268/-
    12-Jun-2014: 7,545/-
    12-Jul-2014: 8,398/-
    12-Aug-2014: 7,680/-
    12-Sep-2014: 7,745/-
    12-Oct-2014: 8,592/-
    12-Nov-2014 : 7,883/-
    12-Dec-2014: 8,727/-
    12-Jan-2015: 8,023/-
    12-Feb-2015: 8,091/-
    12-Mar-2015 : 10,472/-

    Now, as you can see that the Principal Amount repaid is goes up & down for subsequent month, I am not able to understand the formula behind it.

    Kindly advice if you have a clue around it.


    1. Ankit says:

      Hi Arun ,
      Did you get answer to your question. I am having the same concern.

      1. Jegatheesan says:

        Guys, I have the same concern. Is this resolved now?

  9. Dear Alok, sorry for replying late.

    1. As you do not have any Term Plan, please purchase this policy.

    2. It’s true as the poliocy in question is a mortgage term cover with limited prem. payment option for full term of loan.

    3. Yes you can & there ‘ll be no impact on your loan. Please contact SBI Life if you want to cancel it.



  10. Alok says:

    HI Ashal,

    I have taken a home loan of 30L from SBI under SBI Max Gain . During the documentation process in RACPC i was told of RIN Raksha policy where in the premium paid yearly comes out to be 12500. I was told that i need to pay this premium for 5 years and will be covered for loan tenure ( 16 years). I was also told that that if i preclose the loan anytime after 5 years 45 % of premiulm amount would be refunded on surrender of the policy. I have few questions ..

    i) Is it good to have this policy .( I have no term plans as of now)
    ii) This 45 % return of premium value on surrender is true or is some catch there?
    iii) After i receive the policy ( which I have been told that I would get the policy 1 month after loan disbursal) can I cancel it ? Will it have any effect on the Loan amount which has already been paid ? If I want to cancel it what is the process and what reason should be stated ?

    Please advice


  11. sunil tamras says:

    Hi Ashal,
    First of all thank u ver much for ur valuable inputs n ur time spent in answering our queries. U r the one who had helped me stayaway from Jeevan Saral policy wherein due to ur help i had acancelled the policy in freelook period.
    Here i come again with a query.
    I have a maxgain home loan a/c where in i had takena loan of 34 lacs in jan 2008.
    My emi is 34269.I started the loan with int. rate of 10.25% tenure 20 yrs. it reduced to 9.5 % n now its 12%.
    As of july 31st 2012 outstanding is 14,18,761.
    I have prepaid 4laks/yr in 2010,2011 and 3 lakhs in 2012.
    I have recently opted for paying 1% of outstanding amt n get my interest rate reduced to 10.5%.
    On consulting the racpc manager he said tht i,ll hv to pay 1% of the outstanding of the DP
    (drawing power) amount which is 31,83,432 n not outstanding amt 14,18,761.
    I plan to finish off the loan in nxt 4-5 yrs .
    would it be prudent to pay 31,834 and reudce the interest rate or should i continue the way it is now??
    How is the DP amount calculated??
    My loan amount was 34 lacs approx.Now my DP is 31,83,432.
    Why this difference ?? i think in max gain my DP should be equal to my loan amount.
    Also when i look at the a/c statement i notice tht interest debited is different for each month
    inspite of the outstanding amount being same. i understand it,ll be more for a month of 31 days than for a 30 day month but even for alternate months the amount varies for same outstanding.why so??
    I asked this to the bank manager but the manager was confused and couldnt answer the question to my satisfaction.
    Kindly answer my queries.

    1. Dear Sunil, Welcome back. I’m also happy for the fact that I were able to help you. Here goes the answer for this Max Gain query.

      For a moment, just forget that your home loan is Max Gain & now answer me what’s your actual home loan outstanding amount as on date? The answer is 3183432. so the conversion charge is to be paid on this 31.83L figure. In case of this Max Gain, the O/S loan amount is called or known as Drawing Power (DP). Sprite….. Clear hai!!!!!!!!!!!! 🙂

      The interest may vary if you are pulling out money in between even if for 1 day. Over all if you are not withdrawing any amount, the interest should drop steadily for all 31 days months.



      1. sunil tamras says:

        Ashal ,
        So why does my DP and loan amount doesnt match??
        If loan amount reduces in due course as we start paying emi as i read before in the posts do u hv any idea how it reduces??(DP=3183432, Loan amt= 34 lacs).
        The bank manager told me he feels that my DP should hv been less as i am paying emis from feb 2008 and he’ll check the same and get back to me.
        Also plz ans if possible my question in earlier post whether it is prudent to pay 31834 and reduce my ROI or continue the same wasy since i plan to repay back and close the loan in nxt 4-5 yrs.

        1. Dear Sunil, in my opinion, you should pay that 32K conversion fee & switch to a lower ROI.

          Regarding the existing O/S loan amount (DP in terms of Max Gain), I feel it’s right due to increase in ROI, the lesser principal repayment was there in these years.



          1. sunil tamras says:

            thank u ashal once again 4 ur valued advice.
            i,ll be back soon with sm more questions… :):)

          2. Dear Sunil, please feel free to ask. I’ll be happy to help you.



            1. mansi says:

              Dear Ashal,

              I am also showing the same D/P for last 1.5 years.
              I think it should get decreased every month as principle amount getting deducted.
              Please make me understand how it will remain the same

  12. Dear M Ilango, the answer is already given to you in reply of your personal mail. I w’d like you to please carry on the queries in the old discussion (which is also the most replied one here in the forum). Why? your queries in an ongoing discussion ‘ll improve the over all discussed points in that one & you ‘ll also feel comfortable to look back for old queries at a single discussion.



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