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POSTED BY ON February 6, 2013 7:15 pm COMMENTS (5)
I took a max gain home loan account in SBI for 30L in Mar’09(teaser loan). The ROI for the first 3 years is 8.5% which is getting over by Mar’13 after which i will have to pay a higher ROI.I have the following questions
1.I beleive the interest rate after 3 years starting Apr’13 would be >11% (2.75% less than the current SBAR as per the sanction letter),I found response in this thread that i can get the ROI convereted to existing rate which is 10% by paying a conversion fee of 0.57% on outstanding. I am not sure what does outstanding mean here in case of max gain account.My loan amount is 30L and i have deposited around 13L in the OD account and hence paying interest only for 17L currently. Now if the outstanding in this case is 17L, then is it ok if i deposit another 10 lakhs from other sources just to reduce the conversion fee. Once the conversion is done, i can take back the 10L from my OD account ? Please help me understand this
2. Also, once the conversion is done, if there is subsequent reduction in ROI in 2013, will the ROI be applicable for me as well. I beleive when the ROI comes down, only new applicants are benefited and not old customers. So if this is the case, should the old customer move to the new reduced ROI (which is expected to happen in near future) everytime the ROI comes down by paying conversion fee ?
3.The first disbursement of 20L was done on 23-Feb’10 and the final one on 24th-May’10. So if the ROI of 8.5% is applicable for 3 years after which ROI will be 11%, how will the ROI be calculated for 20L and 10L as the amounts were disbursed on different dates ?
How can i get to know when ROI change (from 8.5% for 3 years to 11% starting 3rd year) at the beginning of the month so that i can place a request for conversion as i don’t want to end up moving to current ROI (9.75% after conversion) which is higher than 8.5% that am paying currently before the ROI takes effect (11%) ?
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Dear raj, in your case the spread is 0.5% & that’s how the base rate 9.7% + 0.5% = 10.2% your effective ROI. Yes if you do pay the conversion fee, the new ROI for you ‘ll be 9.95%, a reduction of just 0.25% in your ROI. Please calculate your profit & loss & decide accordingly.
Thanks
Ashal
Dear Vasudevan, let me answer your query. first of all. please contact your loan branch & ask for your loan to be converted from PLR (SBAR in SBI terminology) to a Base rate linked.
After that, please wait till the EMI deduction of Feb 2013 or March 2013, whenever your exact 36 months are completing. Please fill up the ROI conversion form & along with that, please pay the conversion fee to get new ROI which ‘ll be 9.95% as per current status.
This 0.57% ‘ll be aplicable on your drawing power which is your actual loan O/S amount as on date. As & when base rate ‘ll move, you ‘ll get the efect of movement in your home loan immediately.
thanks
Ashal
Hi Ashal,
I have one question on maxgain ROI conversion. I took maxgain home loan of 26L in April 2012 for my under construction flat and I’m paying pre-EMI. when I took the loan, the base rate was 10.00 and ROI was 10.75%. With recent changes in interest rates, now my ROI showing 10.2%.
1) In my case, is it advisable to convert to the new ROI 9.95% by paying 0.56%? With this can I see the change in base rate which is 9.70%?
2) I read some where that there are two components of a home loan interest rate, the PLR (Prime Lending Rate) and the other is Spread. And ‘Spread’ part is constant. In my case, is spread is 0.75%?
Thanks in advance!
Raj
Have a look at this thread: http://localhost/jagoforum2/how-to-know-the-principal-paid-till-date-for-sbi-maxgain/6630/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+jagoinvestorforum+%28JagoInvestor+Forum%29
1. The drawing power in your loan a/c is the outstanding principal balance. Your shortcut idea is not possible. 0.575 will be calculated on this outstanding balance.
2. When ROI changes, it is applicable for everyone. Current customers pay base rate + some differential. The difference between SBAR and the base rate of SBI will always be constant i.e., when base rate comes down, SBAR moves down by an equal amount. Hence you are benefited.
3. It will be 8.5% till 3 years from date of loan sanction irrespetive of disbursal dates. You can call up the customer care and find out.
Thanks shankaranand
2 Once i get the conversion done, i beleive i will also move to base rate (10% currently) form SBAR. I want to know if there is further reduction in base rate will it be applicable for me (old customer) as well or only for new customers only
3 The loan was sanctioned in Dec’09 and the first disbursement was done on 23rd Mar’10 and last was on 24th May’10. Till date the ROI shows 8.5% when i checked it online.So i beleive 3 years is not calculated from sanction date. I contacted the RACPC and they are not able to tell me when the SBAR ROI will take effect (>11%) , which will help me in doing the conversion at the right time as current rate that i am paying is 8.5% which is less than the prevaling floating rate 10%. The RACPC guys are asking me to wait till the interest reflects online and then to come to them for the conversion. When i asked them if the ROI will be displayed at the beginning of the month or at the end online they don’t have an answer. If the ROI reflects at the end of the month i will lose considerable amount. The officer was angry when i queried further and said what would i do if there is no option for conversion and have to pay11.75% for 16 years 🙁