How to maximize the gains in SBI MaxGain homeloan account?

POSTED BY Kulkarni P ON January 23, 2012 3:11 pm COMMENTS (986)

H all,

I have taken SBI MaxGain housing loan couple of years back but mt using it to maximum extent. Does anyone taking benefit of Overdraft facility of this type of account to reduce the interest? Please share some tips to save interest amount on the hosing loan. I plan to use following technique :

1. Transfer additional amount from my salary account to OD account.

2. Get ATM card for OD account and start using OD ATM card rather than savings account ATM card.

3. All short term amount will be transferred to OD account.

4. As and when needed, use OD cheque book to transfer the money to savings account or even to third party payments(I did not see any option online to transfer money from OD account back to savings account)

Any help will be greatly appeciated if you can help me understand these queries on SBI MaxGain.

Thanks,

Kulkarni

 

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  1. theash says:

    Should I invest money in PPF or keep in OD account. Which will give me better returns?

    1. PPF would be a better choice !

  2. Rusty says:

    I have query for MG A/C. My EMI ECS bounced for this month due to some cross issue of cheques and online scheduled transfers. Say my EMI is 59000/- . However, I maintain around Rs 8 Lac in my MG OD A/C.
    On calling the branch as well as RACPC, they are saying nohing to worry as you have more than the EMI amount in your OD A/C.
    I read somewhere that any unpaid EMI will attract interest of 2% pa after 30 days of non-payment of EMI.

    Now, what I am not able to understand is whether this EMI due will be added to my loan records and at sometime in future they will ask for some insane charges or whether interest and principal adjustment will happen this month from my available balance and issue is closed there itself.
    Any help or any experience in this regard would be helpful
    Thanks,
    rusty

    1. Hi Rusty

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

      Manish

  3. Vinod says:

    Need Help
    I have taken the Maxgain SBI home loan along with home loan insurance, in SBI online (net banking) I can see 3 account
    1 is for Home loan account
    2 is for Insurance account
    3 is for Saving account.

    for Home loan account the account type showing as “Cash Credit” when I checked with my other friends for them for home loan account it is showing as “OD” (Over Draft) Account.
    for Insurance account the account type showing as “OD”.
    I went to Bank and asked why “Cash Credit” showing for Loan Account instead of “OD” , Bank people saying both are same only product name is different.

    My question is whether it should be OD for Loan Account or it’s ok for “Cash Credit”.
    For Insurance Account the account type is “OD” it’s ok or it should be something. please suggest.

    Regards,
    Vinod

    1. Gyanadutta says:

      Hi Vinod,
      I too have the same problem. Its showing cash credit AC instead of OD account. Any leads here would be helpful.

    2. Shipra Aggarwal says:

      Practically, the extra amount that you deposit in this account is treated to be deposited in your home loan account resulting in lowering the principal amount resulting in lowering the interest chargeable on the home loan. The only difference is that it is not considered to be permanent home loan repayment but as a temporary deposit. This amount deposited is treated as an add on overdraft account. You can use it as an ordinary account. You are given a checkbook which can be used like in case of a saving account or current account checkbook. You can use for transferring to any third party account including your own saving account. However as far as its ATM is concerned, it must be noted that when you use this ATM card in your own Bank ATM it will be treated as normal ATM of Saving account but when it is used in another bank’s ATM, it will be charged as an overdraft account and not as a savings account.

  4. Amit says:

    Hi,
    I have loan from LIC which I want to shift to SBI MaxGain, with wife as first owner and me second owner.
    I had below queries:
    1. Savings account is mandatory as per what I read. Will this Savings account and MaxGain account be linked together and have single Online Login? Also, will NetBanking be free?
    2. What will be the charges for NEFT to other banks say HDFC?
    3. No. of Free cheques per year?
    4. Is ATM card given for MaxGain account? If yes, the annual fees for it? Also charges for withdrawal at SBI and non-SBI ATMs?
    5. I have two seperate PPF accounts in my name and wife’s name (just PPF didnt opt for savings account that time). Can I transfer those two PPF accoounts and get it linked to this Joint Savings account?

    1. Jay says:

      1. Yes, the savings account and the maxgain account will be linked. If you get netbanking activated for your maxgain and your savings account then you can see both the accounts under the same login.
      2. Normal NEFT charges apply (same as any other bank)
      3. From what I know they have stopped Cheque and atm for maxgain; you can have it for savings account though. However, netbanking is available for Maxgain, you have to ask them to get it activated by putting an application. Its not activated by default.
      4. Not anymore from what I know. You will have atm for savings account and transfer of funds withing your own accounts is free and Instant.
      5. This you will need to check with Bank.

  5. Parag Kumar says:

    What is MCLR spread? When i approached the bank, they said my existing rate of 9.65 will be converted to 8.8% after paying 0.46 +service tax for outstanding loan amount. When i asked why not 8.3 or 8.2, they said your interest rate is converted to ‘MCLR+spread’ and not ‘MCLR’. I didn’t get if this spread remains constant throughout loan tenure as we had a ‘base rate +x ‘ formula previously where ‘x’ remained constant throughout. Can anyone throw light on this?

    1. Sorry, we are not clear on this at the moment !

    2. rahul says:

      which bank is this ?

  6. Arup says:

    I have a home loan( home saver account) with flexible interest rate of 9.35%. There is a linked current account to it and idle money can be perked there to reduce the share of interest from the emi I am paying. The following dilemma I have

    1) I am keeping money in the home saver account( which doesn’t give me any interest earning) which gives me a savings of 9.35% of the idle money and hence, not able to invest fresh funds into either Mutual fund or trading account. What should be the strategy going forward so that I can finish off the home loan at the earliest and also, can take advantages of investing in the stock market?

  7. tarun Pahuja says:

    Is there an process where an old loan will automatically get converted from base rate to mclr regime without any switching fees?

    1. No, there is nothing like that

      1. Ramnath Gokul says:

        Hi Manish,

        If the outstanding loan amount is lets say 35 lakhs and there is already a balance on 20 Lakhs in the over draft (max gain) account, how is the conversion fee from base rate to mclr calculated? Is the calculated on the total outstanding amount OR on (Outstanding amnt – OD balance)?

        Thank you.

        1. Sorry I am not clear about SBI maxgain that much.

          1. abc says:

            yes, it will be on outstanding amount

  8. SRINIVAS says:

    I took Max gain account with loan amount is 26,10,000 with interest rate 9.4 %
    Tenure is 12 years with emi around 30,300.
    If we keep paying emi starting fom this month ie., sep 2016, the loan will be closed on sep 2028.

    I have downloaded a max gain calculator , In the calculator What i see is
    if I keep adding 10,000 every month as surplus deposit to OD account starting from Jan 2017. The loan tenure is reduced to july 2024. My understanding is that loan will be closed in around 8 years.

    But in some articles, I see that though we keep adding surplus deposit to OD account, neither EMI nor loan tenure gets reduced. If this is correct, then where am I getting benefit here.

    Please correct me if any of my understanding is wrong. Any example with some explanation would be helpful to me.

    1. Jay says:

      Hi Srinivas, I am also a current OD account holder in SBi under maxgain.

      In response to “But in some articles, I see that though we keep adding surplus deposit to OD account, neither EMI nor loan tenure gets reduced. If this is correct, then where am I getting benefit here.”
      SO all that surplus amount you are adding is getting added directly to your principal and hence you are paying the interest rate of 9.4% only on the remaining (ie. outstanding-surplus).

      you are right when you say “neither the emi reduces nor the tenure” BUT, since you are adding surplus everymonth.. a greater portion of ur emi now goes to the principal and less in interest and the interest reduces. Also..in ur case..after 2024 if you continue with EMI and surplus..that will be like adding money to the OD (which now you must be seeing as negative). Anyways..after 2024 you can approach the bank and ask them to close the loan as the book balance wud be the same as the outstanding amount.

      1. Ritesh Kumar Sinha says:

        I would like to comment on this statement:

        “BUT, since you are adding surplus everymonth.. a greater portion of ur emi now goes to the principal and less in interest and the interest reduces.”

        It doesn’t work this way.

        The way it works is like this:

        1. EMI is fixed.
        2. Principal Portion of EMI is fixed.
        3. Interest Portion of EMI is levied only on the BOOK BALANCE which is = (Principal – surplus money parked – savings on interest). To understand “savings on interest”, refer Point 4 below.
        4. EMI (which is fixed) – Principal Portion (which is fixed) – Interest (which varies based on book balance) = X. This X is the Savings on interest. This X gets added to your Book Balance to increase it and therefore reducing your Interest outgo.
        6. So, eventually Book Balance = Outstanding Principal – Surplus money parked – Savings on Interest

  9. pavan says:

    Hi,

    i have taken housing loan from SBI under Maxgain, i had asked for zero moratorium period that means amount to be deducted towards both interest and principal from the day of sanction of the loan. But after 6 months i do observe that the amount is credited towards interest only and the rest is parked in loan account. can this be changed to include payment towards principal as well. if so what is the procedure.

    Thanks,
    pavan

  10. Divyashree says:

    Hi Manish,

    We have taken a home loan from SBP for 20L for 20 years with 8 months moratorium in Nov 2014. During the moratorium period we have paid only interest. Later the EMI started. But the whole amount got disbursed only in march 2016. Now the bank is telling we have to pay some due amount. I am not understanding whether there is any due amount to be paid from our side and the bank people are not responding properly. I can attach the statement for clarity from starting. Can you please help me and let me know if i have to pay any due amount to bank.

    Thanks,
    Divyashree

    1. Its not a straight forward calculation here. Please ask them for explaination on how the dues exist and why ?

      1. Divyashree says:

        Thanks for your reply Manish. But the bank officials are giving a explanation that their system has some fault so it does not show proper numbers hence whatever they are telling is correct. But they are not able to explain any of the numbers.
        Every month on 30th / 31st the Debit interest is put on the account along with some transaction “OD PNLTY INT TXN” for which amount between 100 to 500 is charged every month.

        I am in helpless situation as i don’t know whom can i contact to get everything cleared. I am also thinking will transfer the loan to some other bank as they are not helping.

        Any help would be appreciated.

        Thanks,
        Divyashree

        1. This looks like Overdraft penalty. Did you take any overdraft ?

          ALso bank cant say that “system is showing something …” , They are bound to find out and share about it. Check with their customer care about it and also tell them that you will use RTI etc for this.

          Manish

  11. Tarun says:

    When exemption under 80 C is taken for Stamp duty exemption ,whether stamp duty certificate is to be submitted with it for approval.

    1. No , but you need to keep it at your end, because you might require it later if there is any tax enquiry !

      1. Tarun says:

        Just few more query please, Will be thankfull to you:
        1) the payment of stamp duty was made from my wife account to Builders ACCOUNT from cheque, and from that builder purchase the stamp duty for us . Now can we claim exemption for Stamp duty as final payment to Registrar office was done from builder not us.

        2) i also contribute to my wife account continuously in terms of payment of which i have proof as bank statement of both of us. Can i also take the benefit of the same.

        3) whether the exemption of stamp duty is to be taken in ratio of ownership of property. and can we three of us with mutual agreement endorse on stamp paper that the property is equally divided among three of us, so that we all can take stamp duty exemption.

        1. Tarun says:

          the stamp duty and property is on the name of three people me , my wife and father

        2. 1. Yes, you can claim the stamp duty payment from your side.

          2. NO

          3. Only the person who paid (cheque) it can claim it

  12. Tarun says:

    Supposing 3 people have taken loan jointly on property owned by three of them. But only 2 of them are actually paying EMI, so the income tax benefits for principaland interest payment will have to be shared by all three or if possible only two people can gain benefit of EMI payment.
    IN CASE ONLY TWO PEOPLE want to claim benefit as third is not interested what declaration have to be made.

    1. The claim benefits can be used only by people who are paying it. If one is not paying it, then how will he claim it ?

      1. Tarun says:

        the matter is such that , the complete EMI payment is from my wife account which is almost equal to her salary and as husband and wife living together, we were in a impression that we can equally divide the principle and interest benefit. Is it possible with a certificate or some affidavit

        1. No , unless the EMI is paid from the account and the house is in name of the person, the person cant claim tax benefits

          1. Tarun says:

            Thanks for all the replies , I want to ask that if EMI is not paid from my account that is only paid from my wife account, but i am also the co-owner in the property. In that case, Will I be able to take the benefit of 80 C and 24 C of Income Tax act.

            1. No , unless you pay from your pocket, how can you claim it … ?

            2. Msl says:

              Yes, you can claim tax benefit. you will hv to just giv a declaration that both of you are sharing the EMI, say 50-50 or watevr ratio u prefer.

  13. Tarun says:

    In Maxgain loan, do we get Principal amount payment exemption from Income tax under 80 C for the compulsory principal amount deducted along with the EMI . Supposing my EMI is of 25,000 in which interest amount is 20,000 and principal amount payment is 5,000. So, Will I get 5,000*12=60,000 exemption of Principal payment under Section 80 C.

  14. Prashant says:

    I learned that we can make min 20% pre-payment, that too only 2-3 times during tenure. Now to get full income tax benefit, I need to pay additional principle amount each year. For this i was thinking of contacting SBI to reduce tenure of my loan, so that EMI and effectively principle payment per year increases.

    Will SBI honour request to reduce loan tenure to increase EMI?

  15. SRNM says:

    Hai
    Pl let me Know about the IT Exemption for Interest portion and Principle In SBI Maxigain Home loan

    1. What exactly you want to know in that?

  16. Amit says:

    Hi ,

    I have taken Home Loan from SBI Max Gain, i have around 4 lakh balance in OD account. I will get possession of the flat within this week. Can i withdraw the remaining money from OD account after that ?

  17. Rakesh says:

    Hello,

    property is under construction it will take 1 more year for completion. Maxgain loan of 35L is sanctioned and I am having currently 15L. I am in doubt
    1)in construction period I ask bank for complete disbursement (35L), 15 L i will deposit in OD account to save interest OR partial disbursement (35-15= 20L), 15 L I will pay directly to builder?
    2) it good to start full EMI construction period onwards OR should be pre-EMI (in contruction) then full EMI (after construction) ?
    3)could you please share your view on 10.70.10.10 scheme. How it works and does the bank pay interest for the construction period?
    Thanks

  18. Tax on resale Flat

    if i want save long term property gain on resale flat, then as per my understanding I have to invest the amount in new home within three years from sale date
    or purchase the new flat one year before sailing
    is this correct understating?

    if new flat is under construction and it takes 2 years to complete then how do we consider the date
    new flat booking date or government registration date ?
    example booking date is 25 April 2014 and registration date 15 Jan 2016

  19. Ajeet says:

    if I take home loan by 10 March 2016 then as per Tax rule when possession should be done to take advantage of income tax debate on home loan

    possession should be before 31March 2019 or 31March 20 20?

  20. Vinayak says:

    I have recently took loan and opted SBI Max gain, in Bangalore, I have enquired with the bank that they are not providing ATM to the OD account only cheque book will be issued. Is that so? Can you confirm with latest info.

    I have opted for ECS, Every 10th of he month EMI will be deducted from ICICI bank as my salary acount is ICICI.
    Can I change the OD account to salary account?

    1. Hi Vinayak

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

      Manish

  21. Patil says:

    Will it be beneficial to claim tax benefit and use surplus amount as Fixed Deposit especially for second house wherein you can claim tax benefit for entire interest and claiming tax benefit also reduces tax slab from 30% to 20%

  22. Naveen says:

    Hi,

    In Max gain home loan if I have opted for full EMI payment ( Pay full EMI even when full loan has not be disbursed) . Where extra amount that I am paying in each EMI is settled against ?

    1. It should be settled against Principle !

  23. leanprateek says:

    Kindly help me understand this

    Description SBI H L MAXGAIN OD (DEC13)
    Name Mr. PRATEEK KAPOOR
    Book Balance -15,36,415.00
    Available Balance 7,13,585.00
    Limit 22,50,000.00
    Uncleared balance 0.00
    Drawing Power 22,50,000.00
    Currency INR
    Rate of Interest (% p.a.) 9.45%
    Lien Amount 0.00

  24. Amit says:

    Hello,

    If SBI reduces the interest rate, for SBI MG account holder, has to pay certain amount to get adjusted to the newly reduced interest rate, why this payment is required and is it advisable to pay that amount and get the reduced interest rate..Also how the amount to pay is determined..Can you please advise.

    Regards
    Amit

    1. Hi Amit

      Its a complicated calculation, you need to contact SBI only for this

      1. Amit says:

        Ok thanks. I have one more query please.

        My EMI goes via my another SB account in SBI to MG OD account on 5th of every month. Can I transfer on say 3rd of every month the amt (surplus amt?) same as EMI from OD A/C to SB A/C which ultimately will be used as EMI (on 5th it will again get transferred to OD A/C). Will this be beneficial in anyway..

        1. I think you should not complicate it to this level

          1. I am not sure what help you need ?

        2. Ankur says:

          Yes, this is a very nice way to extract the maximum benefit out of the Maxgain account. You should do this asap.

  25. Vivekanand says:

    Hello,
    I have MG in SBI, Many times I use to transfer small amounts balance in SB account to OD account. After possetion and full disbursement by Bank to Builder I am able to transfer amount from OD account to SB account. But now I am unable to transfer small amount from SB account to OD account. I have contacted bank and also shows demo on my mobile but they are unable to resolve. Kindly advice what to do or to whom I should approach?

    1. Hi Vivekanand

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

      Manish

  26. Gagan says:

    Hi,
    CAn anybody explain when transfer option will be available in my maxgain od account. I have withdrawn all the money from the account. Will it be enabled automatically or should i contact sbi branch for the same

    Thanks

  27. NIKHIL says:

    HI,

    I have taken 15L loan from SBI in MAx Gain Account. I have started to pay EMI from Last yest September 2015. Now after end of financial year I recevied interest certificate for account as below :

    Repayment towards Principal Rs. : 30816.00
    Repayment towards Interest Rs. : 82005.00
    Repayment towards Charges Rs. : 0.00
    ————————————
    Total Repayment Rs. : 112821.00

    But if we count from September to April I have Paid (16300 x 8 month) = Rs. 1,30,400.00
    So there is gap of Rs.17579
    Can you explain me what is this?
    Or is Bank has make mistake

    1. Kamlesh says:

      Please check your Maxgain Suraksha account details as well. May be the amount transferred to your MXGAIN Suraksha account.

    2. Srsabat says:

      The gap of the gap of 17k must be some kind of charges. Like stamp duty, service tax or insurance added to ur account. Better talk to manager of the branch u have sb account or the loan ac.

  28. Krish says:

    Hi,

    This topic could be beaten to death, but search didn’t get answer to my below question. So, pardon me if it’s already answered somewhere – would appreciate a pointer.

    Is SBI Maxgain beneficial for buying 2nd home for investment to use the maximum “interest” portion of loan in tax deduction?

    In SBI Maxgain, if I put surplus amount in the OD account (assuming it is pre-payment and not parking), the interest outgo is minimum and goes against my wish of getting maximum tax deduction for “interest”.

    In these cases where I want to pre-pay instead of parking the amount, does a normal home loan account work better than Max gain account?

    Thanks,
    Krish

  29. Nilesh says:

    I am getting Funds transfer failure error as “Transaction result into closure of loan account. Please contact your branch.” when I transfer funds from my SBI saving account to Maxgain OD account. I tried to contact branch many times, but they are unable to resolve this problem. Even I paid the due of Maxgain suraksha account then also same problem occurs. Please suggest.

  30. Devender says:

    Hello Sir, I took max gain home loan of 30 Lakhs 15 thousand i.e 3015000 Rs. @ 9.85%. I want to close this loan as soon as possible.

    How much amount i need to deposit into max gain account monthly to close this in 3 years. pls reply.

    Thanks.

  31. kumar says:

    HI…….
    I have SBI HL I want know whether my HL a/c is maxgain or term loan how found about it,

  32. Hi ,

    I Took a MG Loan for 36 L and opted for 12 months pre EMI, but entire loan a got disbursed within 6 months and I got registered my Flat in My name.

    So My question is even though I opted for 12 months PRE EMI, since full disbursement is done within in 6 months , will my EMI start from 7th month on-words or I need to Pay the pre EMI till 12 months

    Thanks
    Manu

  33. investwise says:

    Hi Manish/Atul,
    I have a question relating to early home loan payment and I have never been able to get this clear. Can you help me understand to make a wise decision?
    I took a home loan of 33L for 15 years tenure for which I started paying EMI from 2012. I plan to close the home loan by end of 2016. By doing this, I would have roughly paid 10L in interest in 4 years to close the home loan. I met an LIC agent yesterday who said its a bad idea to close the home loan so fast as its like paying 33% interest annually to close the loan (in 4 years) as against 10.15% in 15 years. Moreover I will be losing tax benefits for the 1.5L interest component. I am convinced that prepaying is good enough, but not able to do the math. Will you be able to guide me?

  34. sumantgupta says:

    I am already SBI Maxgain home loan borrower,following are the details:

    Home Loan : SBI Maxgain
    Loan Outstanding: 28 .5 Lacs
    Current rate : 10.1 %
    Loan duration left: 17 years

    Should i go for loan conversion to 9.9 % by paying 0.56% of Outstanding?
    As per my calculation:
    If my loan continues for 17 years total interest i pay would be if interest rate is 10.1:
    Rs : 31,24,174 (A)
    If my loan continues for 17 years total interest i pay would be if interest rate is 9.9:
    Rs : 30,50,564 (B)

    Total difference b/w interest is: approx ((A-B) is Rs 75000.
    If i pay conversion fees of (0.56 * Outstanding loan of 28.5 ) = Rs 16000.
    Seems there is benefit. Should i go for it or no or am i missing something?

  35. Hi Ashalamshu,
    I went through the earlier posts and I feel that my query can be resolved on this post only.
    Recently I have taken Home Loan from SBI with Max gain feature.
    Loan amount is: 32,60,000 with Interest rate as: 10.15% and Tenure is: 20 yrs.
    I have gone for: Full EMI option.
    I am expecting possession by Dec 2015.
    Only one disbursement is done to builder of Rs: 27,01,987.00 (done on 24th Feb 2015 by SBI bank from OD account)
    EMI will be: 32,217 and starting from 10th April 2015
    I have following query:
    1. On what basis EMI is calculated to be 32217?

    2. How can I see the Principal and Interest component for each EMI?

    3. What are following two entries in my statement :
    DEBIT INTEREST (Debited) on 28th Feb 2015 for 3757
    DEBIT INTEREST (Debited) on 31st March 2015 for 23324

    4. Will my first EMI (on 10th April) be same as told by bank manager or it will change?

    5. Will EMI deduction from my Saving Account revert any of the above transactions (related to DEBIT Interest)?

    I am really hoping for the clarification on this as things are confusing me and need to plan it in better way.

    Thanks in advance.

  36. msreddy says:

    Hi Ashal,

    Please provide me guidance on the below.

    I have taken a home loan from SBI with max gain policy. Every month end an amount is getting deducted from my OD account saying “DEBIT INTEREST”. The amount is my savings money transferred to this account for utilising the max gain policy. Again an EMI is getting deducted from my salary account every 5th of the month. So, am I ending up paying two times a month, since both the cases its my savings money only. Please clarify and let me know if you need further details. Thanks in advance.

    Thanks.

    1. nsabhyankar says:

      Dear Msreddy,

      The EMI deducted from salary account is deposited in the MaxGain (MG) account. It adds to your credit balance. In the MG AC, search for an entry like this: ‘BULK POSTING ECS DT 05/03/2015’. It will show a credit entry for an amount equal to the EMI.

      The bank deducts the interest on the month-end and the entry is marked as ‘debit interest’. This is the interest that you pay on the home loan. The interest debit will happen irrespective of whether you have any surplus in MG or not. The EMI that is transferred from salary AC to MG AC covers this.

      You are not paying two times. The EMI amount gets added to your balance in MG. The interest is debited as you observed. The principle reduction is shown by a reduction in the drawing power.

      In a normal home loan, your EMI is debited from your salary AC and goes directly to the bank. However, in the MG scheme, you need a separate loan AC where you can deposit your surplus. The same AC is used by the bank for EMI deposit and interest debit. This is causing the confusion.

  37. nsabhyankar says:

    Thanks Manish,

    I had sent a mail to the bank and they refunded the amount.

  38. nsabhyankar says:

    I have a MaxGain loan AC with SBI. I had a debit card linked to this AC. However, it does not work anymore. The loan branch says that debit cards were closed for MaxGain AC’s. Is that true? Can anyone confirm?

    Also, the bank has deducted card maintenance fees from my MaxGain AC. Is this allowed?
    Has anyone else been charged for this canceled card?

    1. Hi Nikhil

      Seems like the answer for this can be given by bank only !

  39. Loganathan says:

    Dear Ashal,

    I am holding max gain account, i started paying full EMI from beginning. At present i have left out around 4 lakhs. available balance in my account. Now i am planning to buy a car, were i am in short 3 lakhs, could you please suggest whether i can go for car loan offering at (10.75%) or to utilize the balance amount in Max gain account(10.5%) which will be more benefit.

    Loan Amount: 30 lakhs.
    Tenure: 25 yrs
    EMI: 29,000
    According to my calculation if i go for car loan at 10.75% total interest payable will be Rs/- 34,741.
    In case if i utilize available balance in Max gain account i will loose interest saving around Rs/-69,766.
    Kindly advise whether my understanding is correct, if it wrong please give your opinion.

    Thanks

  40. nsabhyankar says:

    Should the partial pre-paid amount be included in the ‘principle repaid amount’ on the interest certificate?

    I have an MG loan account. I had made partial pre-payment in the last FY (2013-14) I requested for an interest certificate for the same period. The principle repaid amount mentioned in the certificate does not include the pre-paid amount. It only includes the regular principle parts of the EMI for the year. is this correct?

    If the pre-paid amount reduces the principle, why is it not included in the principal amount on the certificate? Does it make any difference if the MG account has a credit balance (i.e. the balance = loan outstanding and thus no interest charged)?

  41. VivekMumbai says:

    Hi Ashal, thank you for running this forum. Glad to see so many people satisfied, appreciate if you could help with some guidance.

    Situation: If I take max gain (loan with OD) and plan to pay full emi for a under construction property of 1cr.

    Q1 – If the project goes on hold or gets into a litigation, I’m sure bank will continue to ask full EMI until I close by full loan payment irrespective of how much is disbursed. a) Is this right? b) Is there any safeguard for a consumer?

    Q2 – I need 50 lakhs for a property of 1cr (as I have 50lakhs from another resale for upfront payment now). I need financing immediately to cover slab payments.
    I dont want to finance more than 30 lakhs because
    – I can arrange 10-20 lakhs additionally through savings in the next 2-3 yrs of construction period but not right now.
    – I want to keep current and future emi wrt 30 lakhs as MG OD will only reduce my interest amt for a 50L loan and still deduct huge principal every month (affecting my future savings)
    – Not sure but the interest to recover a 50L loan unlike for a 30L loan will be higher, again affecting the savings.

    a) Is my understanding listed above right?

    Q3 – What approach would you recommend if none of mine listed below are relevant? I had some thoughts about approach, but not sure if these work, please can you guide?

    Approach 1 – can I ask the bank to not disburse some of the demands as I may have savings to do so on my own. But will the bank sanction loan for a part of the remaining payment to the builder (e.g. 50L = 30L bank+20L me). I want SBI to release some for initial slab payments (atleast 75% of 30L) and then I can cover in the interim, remaining 25% for the final slabs from bank.

    Approach 2 – If I finance 30 lakhs and xfer 10-20 lakhs partly during the 2-3yrs construction period, apart from saving the interest through these xfers (as you’ve kindly made us understand), will the disbursement capacity get reset to a new value everytime I xfer to OD.
    Illustration: Assume 30L loan emi 30k (5+25); then 10L xferd to OD will reduce next months interest component (e.g. 2+28) …..but will my loan capacity get reset to 40L (30+10)

    What this will mean is that the bank will have more than 30 lakhs in the OD to disburse as I would have continued to add during the constrution period. So the bank will end up disbursing 50lakhs even though I am financing only 30 lakhs from them, since I would have added that remaining 20 lakhs in the OD account before 30 lakhs burns out.

    Thanks
    Vivek

  42. sreekanth101 says:

    Dear Ashal,

    This is by far the best article and discussion on Maxgain that I have come across.
    Really appreciate your patience and contributions.

    Would be great if you could respond to my queries as well (kindly bear with me for the longish question):

    Background:
    – SBI MG HL sanctioned in 2013 Nov
    – Total sanctioned amount – INR 99 lakhs
    – Amount disbursed till date – INR 42 lakhs
    – Pending amount to be paid to the builder: INR 40 lakhs
    – Expected possession: Dec 2015 – March 2016
    – EMI starts from – May 2015 ( EMI Amount : INR 101, 264)

    Q1:
    When can I start using the MG account as an OD account – Is it post disbursement of INR 99 Lakhs or only on the possession of the flat?
    Got 2 conflicting replies from the bank on this one

    Q2:
    Can EMI be deducted from the MG account itself?
    E.g. I park additional amount in the MG account and on the EMI date the amount is deducted from that account. Is this possible?

    Q3: Can the limit be reduced
    Is it possible to reduce the limit to say arnd 60 lakhs, since I feel that by the time I get possession I will have the remaining equity ( of 24 lakhs).
    The idea is to reduce the limit to INR 60 lakhs.. by march – april this amount would be disbursed, at which point I could start using the MG as an OD acct

    Many thanks in advance for your assistance.

    Best Regards,
    Sree

  43. Reji m says:

    Thanks Ashal!

  44. Reji m says:

    Hi Ashal,

    I’ve a doubt: Consider I’ve started the EMI from day 1 and the registration of the property is another 8-12 months away.
    If my understanding is correct SBI will charge interest amount only for the amount released. So what will happen to the excess portion of EMI?
    Does it go towards principal or it will remain parked in the MAX gain account.

    For example, I am using a 50 L loan. The EMI would be 48583 (20 yrs, 10.1%).
    Consider 35 L released so far. Then 29458 will get deducted as the interest from the EMI, so what will happen to 19125?

    1. ashalanshu says:

      Dear Reji, the unused interest amount ‘ll become part of Available balance and ‘ll help to bring down the interest outgo next month.

      Thanks

      ashal

  45. Ashwani says:

    Thanks for nice article…I have queries regarding the same. I got MaxGain sanctioned in Apr’13 for 38,00,000 Rs, with Moratorium period of 18 months. Initial demand by builder was 14.25L, hence I calculated and started paying the EMI of Rs 15,000 from May’13 onwards, next builder demand was Rs 7.25L in Oct’13, hence I got my EMI increased to 21,000 Rs and so on for next demands. As of today, my moratorium period of 18 months is over while I haven’t taken full disbursement of Rs 38,00,000 and SBI officials have asked me to pay full EMI of Rs 38,620 starting today. As of today, Book balance is -29,93,338 and whole disbursement will take another 18-24 months as builder demands every 6 months. I recently asked SBI officials to increase my EMI to Rs 31,000, they state they gonna do it, but that might show your account going irregular. Is that the case? If its true, any suggestions on this. Please suggest, your valuable inputs might help me.

    1. ashalanshu says:

      Dear Ashwani, as your moratorium period was just 18 months and your builder has not withdrawn the full loan amount, you do not have option now to pay partial EMIs. Please start paying full EMIs now.

      Thanks

      Ashal

      1. Ashwani says:

        Thanks Ashal. Is there any wayout I can get the moratorium period extended? Also, wanted to check if full EMI on 38,00,000 would be calculated on basis of 240 months or 222 months.

        1. ashalanshu says:

          Dear Ashwani, the full EMI ‘ll be calculated for remaining 222 months. For extension of moratorium period, you should approach the AGM Loans, RACPC of your city.

          Thanks

          Ashal

          1. Ashwani says:

            Thanks Ashal for your prompt response and advice, will try to get MP extended.

  46. saj says:

    Hi Ashal,

    This discussion has been very informative. Have gone through most of the comments above and have a couple of questions-

    I am buying an under construction property and has decided to go for the max gain loan.
    But should I go for full-emi from beginning or pre-emi? I have read from the comments above that we should go with full-emi, but I do not understand the benefit of full-emi with maxgain. With maxgain, we can always park the surplus amount in the maxbain account, right?. So going with pre-emi and parking money in max gain will be as good as going for full-emi. Is this right or I am not understanding something here?.
    Also, I understand from the above discussion that the period of loan is of not much importance with maxgain. We can go for a 15 years term even though I am planning to close the loan in 10 years. Is this right?

    Thanks a lot for the help.
    Regards,
    Saj

    1. ashalanshu says:

      Dear Saj, in case of Pre EMI, you ‘ll not be closing the loan although saving ‘ll be there in terms of paid interest if you put excess amount directly (EMI- Pre EMI). In case of full EMI from day one, the principal ‘ll also be paid and hence more benefit for you in interest outgo on the loan amount.

      Yes you may even opt for 20-25-30Y period in Max Gain as you can actually control your interest outgo.

      Thanks

      Ashal

  47. ashalanshu says:

    Dear Rita, if your interest outgo is 1.5L Rs. and your tax slab is 30% than resultant tax saving is around 45K Rs.

    Thanks

    Ashal

  48. ritasrik says:

    Hi Ashal,
    The tax saving would be around Rs.45000 while (if I m not wrong) the saving on the interest would be around Rs. 1,00,000/-. Am I doing the calculations right? Is there any clause that I need to be aware of?
    Thanks.
    Ritasri.

  49. ritasrik says:

    Hi Ashal,

    I have a SBI Max Gain home loan with drawing power Rs. 30,00,000.
    As I have parked around 25 lacs in the OD account the total interest charged till date for the 2014-2015 financial year is at around Rs. 23,000.
    My query is, would it be better for me to keep the amount in the account and avail the benefit in the interest charged OR withdraw the amount and avail tax benefit .

    Many thanks.
    Ritasri.

    1. Krishna says:

      Dear Rita,

      If you haven’t parked 25L in OD, you saved int 2.5L for 10% int. if you not parked, you will get the tax benefit 45000 only when you are in 30% slab.

  50. ashalanshu says:

    Dear Chandan, in few cases SLOP has been applied by SBI. Why it’s selective and not common across the board for all borrowers, I do not know.

    Thanks

    Ashal

  51. chandan blr says:

    Hi Ashal,
    I got SBI max-gain loan sanctioned in June 2013 , have been paying EMI’s since then.
    In sep 2014 , my loan account is debited with 1000/- saying “Supplementary Legal Opinion Charges” . I had submitted legal opinion from SBI endorsed lawyer when I applied for loan and they had taken that with all other documents. DO you know why this debit gain , is that yearly ?

  52. parvinder13jun says:

    Hi All,

    I have taken SBI YUVA HL MAXGAIN home loan for 57 lacs and disbursed around 31 lacs. I have transferred my saving in Loan account and now out standing amount is around 7 lacs.

    But I need to make payment to builder but as per my discussion with SBI, they will disbursed only Rs 57 lacs – Rs 31 lacs = 26 lacs.

    Book Balance -6,22,568.00
    Available Balance 50,77,432.00
    Limit 57,00,000.00
    Uncleared balance 0.00
    Drawing Power 57,00,000.00
    Currency INR
    Rate of Interest (% p.a.) 11.0%
    Lien Amount 0.00
    Now my questions are.

    1. How do I pay Rs 40 lacs to builder now as i have already transfer my savings to OD Account??
    2. What is the use of OD account if they will not disburse the requested amount?
    3. Can I transfer my saving back to Saving account from OD?
    4. How OD amount will be transfer back to Saving account?

    Please suggest me.

    Regards
    Parvinder

    1. ashalanshu says:

      Dear Parvinder, it has been told many times to not park your savings in MG account till final disbursal of your loan amount. To get back your own amount, please contact AGM loans in your RACPC.

      Thanks

      Ashal

  53. sarkarsk says:

    I have a query on restructuring the home loan, please advice.

    I have taken a home loan of Rs 18 Lac (property price of 29 Lac) on May, 2012 from SBI (Maxgain). The tenure is 8 years.
    With regular EMI and pre-payments, as of Sep, 2014, Rs 5 Lac is outstanding.
    Now I want to purchase a second property.
    My plan is to pull up Rs 5 Lac from SBI Maxgain a/c (which is my capital parked in to reduce loan interest component).
    I will use this 5 Lac as downpayment for the second property.
    Total down payment requirement is 10 Lac for the second property.
    I will arrange another 5 Lac from relatives/friends.

    Coming back to SBI Maxgain loan of my first property; now my present loan outstanding will be 10 Lac.
    I want to restructure this loan amount as 20 year tenure.
    Emi for 10 Lac having tenure of 20 years will be approx 10K per month.
    If I buy my second flat, the existing flat will be on 10K per month rent (ball park figure).
    So this way, rent will offset the EMI for the first property.

    Now can I apply for 40 Lac loan with 20 year tenure, which is under my loan eligibility?
    The second property is RTM and price is 50 Lac.

    Experts, what do you think? Will my bank, SBI accepts this proposal ?

    1. I think this is a very good idea . Go ahead .

  54. hima says:

    Hi, This forum was very helpful. However, I still have issues in my Maxgain loan.
    I have a home loan SBI Maxgain for 35 lakhs. EMI is around 35000 pm. The moratorium period got over in May 2014. I have started paying EMI from Sep 2013.
    I do not see my principal amount of EMI debited since June 2014. Nor my Drawing power has reduced with that amount. When will the bank start debiting the Principal part. I have handed over the completion certificate of flat and the loan is fully disbursed.
    Pl find the details as shown in the account as of now
    Book Balance -34,79,325.00
    Available Balance 20,675.00
    Limit 35,00,000.00
    Uncleared balance 0.00
    Drawing Power 35,00,000.00

    Who should i approach to get the principal deducted every month?

    1. ashalanshu says:

      Dear Hima, please approach to your loan serving branch for the same.

      Thanks

      Ashal

  55. Reji m says:

    Hi Ashal,

    I would like to know the procedure or points to keep in mind while loan closure:
    1) Obtain No Object Certificate
    2) Get back all the original documents ( make sure all pages are there)

    Anything else I need to do know?

    1. ashalanshu says:

      Dear Reji, yes NOC as well as all the original docs are the things you need to check.

      Thanks

      Ashal

  56. htumesh says:

    Hi,

    This site was very helpful for me. After seeing this site I transferred my home loan from other bank to SBI in Apr-2013. Thanks a lot, I am sure I have saved money.

    From the day I took loan I am entering the details in an excel sheet and following up. I have formulas in excel sheet for “Book Balance” and “Available Balance” I just have to update debit, credit and other details. My formula works for “Book Balance” whereas for “Available Balance” it doesn’t work whenever there is “Debit Interest”. I do not know why. It works for other transactions (other than Debit Interest) Here are the details:

    For example on 26th Aug online web showed be below details:
    Book Balance: -3917192 (my formula is “Previous Book Balance”+Credit-Debit)
    Available Balance: 1239492 (formula “Previous Available Balance”+Credit +Debit)
    Limit: 5156584

    On 31 Aug:
    Debit Interest: 37649
    Book Balance: -3954841 (-3917192+0-37649 = -3954841, which is correct)
    Available Balance: 1195007 as shown in my account
    As per calculation: 1239492 +0-37649 = 1201843
    So my Available Balance is reduced by Rs 6836/-
    Am doing anything wrong in my calculations? Why I am getting this Rs 6836/- difference? If I download the statement I will not get “Available Balance” for each day.

    Could you help me to understand this? I have another home loan taken recently, even in that loan I see similar difference.

    Regards,
    Umesh

    1. ashalanshu says:

      Dear Umesh, can you mailme your account statement in exl. format?

      Thanks

      Ashal

  57. ashalanshu says:

    Dear Pushkar, the Processing fee is your usual home loan processing fee. The Cersai fee is meant for some certification related charge done for you by SBI.

    Thanks

    Ashal

    1. Pushkr says:

      Thanks for clarification Ahsalanshu. But at the time of signing and finalizing home loan, my power of attorney paid these fees via separate checks. So SBI deducted these fees twice so far. I email RACPC branch and the local branch where my loan account is processed, but none of them replied so far.

      1. ashalanshu says:

        Dear Pushkr, if you have paid already these fee, please visit your loan serving branch with a written application for reversal of these debit entries.

        Thanks

        Ashal

  58. Pushkr says:

    Hi All,

    This is extremely useful forum I have seen on SBI maxgain. Specially great contribution my Ashalanshu. Kudos!

    My question is – I recently purchased SBi MG home loan of 30lkh on underconstruction property. Out of 30lkh , 10lkh are disbursed to builder. Now on the day on opening OD account, I could see OD account details along with my saving account as –

    Description SBI H L MAXGAIN OD (DEC13)
    Name XXXXXXXXXXXXX
    Book Balance -10,00,000.00
    Available Balance 20,00,000.00
    Limit 30,00,000.00
    Uncleared balance 0.00
    Drawing Power 30,00,000.00
    Currency INR
    Rate of Interest (% p.a.) 10.15%

    I had some surplus amount that I transferred to OD account. Now day after transferring the amount to OD, I see that SBI has charged me TWO DIFFERENT FEES. I am unable to understand what those fees are and why they charged me if there was not suppose to be any fees for transaction OD account.
    Below are the description of those fees –

    DEBIT CERSAI – 562.00 Rs
    DEBIT PROC FEE = 6,500 Rs

    Can anybody help me understand what going on here??

  59. tarun says:

    Hi All,

    Plz help me in understand the transactions related to SBI Max Gain home loan account:

    I was having 54253.35 Rs. as my Available balance till 31st July 2014. But when I checked on 1st Augaust 2014, Available Balance showing was 37436.35 Rs. i.e. less by 16817 Rs. On 10th of every month, an amount of 16810 Rs is getting deducted from my savings account as an EMI.

    Now, my account looks like this as on 4th Aug 2014:

    Book Balance – 17,38,780.65

    Available Balance – 37436.35

    Limit – 17,762,17

    Uncleared Balance – 0.00

    Drawing Power – 17,762,17

    Plz find below the recent transactions on my OD account:

    31-Jul 2014 (31-Jul-2014)

    DEBIT INTEREST

    15,192.00

    11-Jul-2014 (11-Jul-2014)

    BY TRANSFER
    INB 4253.35_50000_11-14-2014

    II16063214 TRANSFER FROM 20158347433 Mr. TARUN SHARMA

    50,000.00

    11-Jul-2014 (11-Jul-2014)

    BULK POSTING
    BY E.M.I. TRF FROM 05491610063548

    16,810.00

    30-Jun-2014 (30-Jun-2014)

    DEBIT INTEREST

    15,004.00

    11-Jun-2014 (11-Jun-2014)

    BULK POSTING
    BY E.M.I. TRF FROM 05491610063548

    16,810.00

    02-Jun-2014 (02-Jun-2014)

    BY TRANSFER
    INB loan

    II15422391 TRANSFER FROM 20158347433 Mr. TARUN SHARMA

    113.00

    31-May-2014 (31-May-2014)

    DEBIT INTEREST

    15,522.00

    As per my understanding, whatever is interest saved will be added to the Available Balance. but here, I have paid EMI as well as 16817 Rs. got deducted from my Available Balance.

    Plz help me understand this.

    Thanks,

    Tarun

    1. ashalanshu says:

      Dear Tarun, can you mail me your account statement over my personal mail id?

      Thanks

      Ashal

  60. rahulmunjal says:

    Team,

    I have a pre-approved loan from SBI for 55 Lkh for a property of value 65 lkh (possession next year). I have some surplus money that I might need in near future (before the possession of the current flat). So I am planning to take loan between 30 to 40 lakh.

    1. Should I take loan for 40 lkh and put the surplus in maxgain?

    2. How much extra processing fee (stamp duty, assessment, etc) will be incurred for the extra 10Lkh loan??

    Thanks.

    1. ashalanshu says:

      Dear Rahul, please opt for maximum possible loan and then park your own money in Max Gain to keep liquidity of your money open to you.

      Thanks

      Ashal

  61. nsabhyankar says:

    @Anshudeep

    1. Part pre-payment can not be done by NEFT from savings to MaxGain. That would be just parking the surplus into MaxGain.

    It will not reduce the drawing power. You need to approach the RACPC and submit an application asking them to accept the pre-payment and reduce EMI. The DP will reduce once this happens.

    2. EMI can be reduced. I have done it for my MaxGain loan.

    However, as per RACPC Pune official, this can be done only twice in the entire tenure. So, make sure you are pre-paying a substantial amount as per your scenario.

    A very small amount won’t change the EMI much and you will use up one of the two chances you have.

    3. Better option depends on why you want to do it.

    I was looking for another loan and thus wanted the EMI to come down. This helped in increasing the eligibility for the second loan.

    If you are only looking for saving on interest, just park the surplus in MaxGain.

  62. anshudeep says:

    Hi,

    I had taken 28 lakhs of Home Loan from SBI and its a Max Gain account (EMI effective from march 2013) and paying full EMI from Day 1.

    I would like to make a part payment (instead of parking Surplus funds in OD) of some amount so that my EMI gets reduced. But as per the SBI officials the EMI can never be reduced. So what happens in this case? the tenure gets decreased? Also, I have following questions:

    1. My SBI savings account is linked with my OD account. For doing part payment is it possible to make an NEFT funds transfer from this SBI savings account to OD account?

    2. Is it actually correct that the EMI can never be reduced or is there a way?

    3. Which is a better option considering the EMI can never be reduced, a) parking surplus funds in OD which can be withdrawn any time OR b) making part payment which will never come back to you?

    Regards,
    Anshudeep

  63. sathis.venugopal says:

    Hi Ashal,

    I took my housing loan with SBI and its a Max Gain account and curretly my 1st Loan disbursement is happened for Rs.267999 and i opted for paying Full EMI and for me the sanctioned loan amount is Rs.3538000 with interest rate of 10.15 and being my wife as primary and im secondary and when saw the same in online linked to my SB Account the limit is showing as Rs.3527232 instead of 3538000 and interest is 10.1 (in my sale agreement my name was 1st and my wife name is 2nd applicant so the sanction letter shows 10.15 as interest). Now my question is
    1.why in online it is showing wrongly
    2. Do i need to get seperate internet banking for the OD Account
    3. Since im opting for Full EMI and the house is under construction can i opt for tax emption (expecting ill get the house in the month of Jan/Feb’15)
    4. The sanctioned loan amount is Rs.3538000 but i require only Rs.2450000 when can i ask the bank to change the same.

    Account Number 00000000000000000
    Description SBI HL MAXGAIN OD(WOMEN-DEC13
    Name Mrs.
    Book Balance -2,67,999.00
    Available Balance 32,59,233.00
    Limit 35,27,232.00
    Uncleared balance 0.00
    Drawing Power 35,27,232.00
    Currency INR
    Rate of Interest (% p.a.) 10.1%
    Lien Amount 0.00

    1. ashalanshu says:

      Dear Venugopal, let me try to answer your queries.

      1. It’s not wrong. the DP has been reduced due to start of your regular EMIs.

      2. Please wait for final disbursal to avail transaction rights.

      3. If house possession comes to you in Jan/Feb 15, you can claim full FY’s Interest as well as principal for tax benefit.

      4. Once your requirement is over, inform the bank about the same to reduce the loan amount.

      Thanks

      Ashal

      1. sathis.venugopal says:

        Hi ,

        Thanks for your reply, Another Doubt i have incase if i got delayed possession consider after Mar’15 then for this year i cant able to use the IT Exemption on 80C for the principal amount but consider the registration i can do before getting the property in such case can i claim for the IT Exemption (if i do registration by this year itself) on 80C for stamp duty and registrtion cost.

        1. ashalanshu says:

          Dear Venugopal, yes Stamp duty and registration charges paid in the year of registration are available for section 80C benefit.

          Thanks

          Ashal

  64. parit says:

    Hi Ashal/Jagoinvestor forum members ,

    I have been following this thread for quite a while . It has helped me in taking right decision to avail SBI homeloan . My loan is of amount 35 lakhs and house is worth 50 lakhs . My loan was sanctioned in June 2014 , so far 10 lakhs have been dispersed to builder .
    Now yesterday new RBI guidelines have come under which my housing loan comes under priority sector lending . My questions are as follows :-
    1. Will my loan be eleigible under this and consequently will i see a drop in my interest rate ?
    2. When and how do I negotiate with SBI regarding this ?
    3. if the bank insist that it is only for new loans what is the recourse available to me ?

    Thanks in advance for your reply .
    Paritosh

    1. ashalanshu says:

      Dear Parit, the ROI on your SBI Max Gain is already low.

      Thanks

      Ashal

  65. Vaninath says:

    Hi Ashal,

    I took SBI Maxgain Home Loan in 2009.
    I have been utilizing overdraft facility to maximum extent and reduced Interest out go considerably by parking surplus money in Overdraft account.

    Now my interest out go is just around 1 Lakh per annum.
    My home loan interest rate is 10.25%
    My query is regarding raise in exemption limit of income tax on Home Loan interest which is 2 Lakhs in recent budget.

    Which one of below is beneficiary ?

    1. I continue to park surplus amount in Over Draft SBI Max gain account. Pay an interest of around 1 Lakh and also pay around 30% extra Income Tax since my Home Loan Interest out go is less than 2 Lakhs.

    2. Withdraw surplus amount from Over draft SBI Max Gain account. Invest in say Fixed Deposit for 9% interest. This will increase my Home Loan Interest per annum to 2+ Lakhs and take advantage of paying less Income Tax.

    Please let me know which one is beneficial.

    Kindly get back to me in case of any queries.

    Regards
    Vaninath

    1. ashalanshu says:

      What about income tax liability on FD interest?

      Thanks

      Ashal

  66. Venkata says:

    Dear Ashal Sir,

    Thank you for the wonderful guidance. Its immensely helpful.

    Our builder is pushing for registration, at the time of which the final disbursal 5% is to be released by SBI. Before registration itself, I parked about 8 lakhs amount into MAXgain account, which I am not able to access now for the obvious reasons. If I go for the registration now and final disbursal is done, can I expect the transaction rights ”immediately” so that I can access that 8 lakhs for my important needs. Are there Only two conditions: 1. Final disbursal 2. registration or More…!?

    I am asking this because, the builder can give for possession only after 3-months; Not now as water & sanitary connections are not yet given. Is possession and possession letter are mandatory for transaction rights. I could not find any official document for this from SBI.

    I am not able to postpone the registration for 3-more months till possession due to the pressure from builder, as he is not allowing us to do woodwork without registration.

    Please help.

    Thank you,
    Venkat

    1. ashalanshu says:

      Dear Venkata, possession letter is not necessary from builder. Yes registration and final payment receipt from builder is required for transaction rights activation. After the final 5% disbursal, contact your builder to provide receipt and issue a covering letter that all the money have been recieved against the property (details ofnthe property in question). Contact now your loan serving branch for transaction rights.

      Thanks

      Ashal

  67. Parag Kumar says:

    Hi Kulkarri Sir,

    You have to pay 0.56% of outstanding loan amount(outstanding Principal) to SBI to get the loan rate reduced from 11.35 to 10.1.

    You need not go to RACPC. You can do it through your branch.

    Thanks,
    Parag

  68. chandan blr says:

    Hi Ashal
    Have two questions – if you can help me with

    1) wrt to “DEBIT INTEREST” entry in my OD account , I understand that this money is the interest I pay on Balance (Book balance) and it reduce if I put surplus into OD account, the doubt I have is when I pay EMI , part of the EMI will be principal amount and part of it is for the interest , so here I am paying interest in 2 parts (one is in-side EMI and one is taken on last day of the month) , is that true ?
    if EMI is fixed , will principal part of EMI increase to the extent of “debited interest” – a bit confusing for me ( I know this is the standard practice in SBI but trying to understand the economics behind)

    2) when I signed SBI maxgain loan , interest show there (on papers) was 9.95% (one year back) , but when I login to account/online , it show interest rate in 10.25% , how does this work

    Regards

    1. ashalanshu says:

      Dear Chandan, in case of Max Gain, interest is not debited from your account on EMi date. it’s actually debited on last day of the month. So from EMI datwe till last day of the month, this interest part of EMI remains as available balance and thus also help a bit to save on interest outgo.

      When you applied and availed home loan the base rate was 9.7% which has been increased to 10% and thus your own loan being Base Rate + 0.25% spread, has become 10.25%.

      Thanks

      Ashal

  69. Kulkarni P says:

    Ashal,

    My current Maxgain interest rate is 11.35% which is I think on higher side compared to new loan rate of 10.1%

    How can I reduce the interest rate? Do I need to visit RACPC office for the same?

    Thanks.

    1. ashalanshu says:

      Dear Kulkarni, please contact your loan serving branch to get reduced ROI. You w’d have to pay a conversion fee for the same. Around 0.56% of your as on date DP.

      Thanks

      Ashal

  70. kapil1004 says:

    Hi Ashal,

    I have couple of queries below. Appreciate your suggestions:

    I have takeb SBI Maxgain loan amount 18 lacs @ 10.15% ROI. I have some suplus fund of 5 lacs which I kept separate and don’t wish to touch them
    1) Which is better option from returns point of view? Investing this 5 lac in Fixed deposit @ 9.5% or put this amount in OD?
    2) In Maxigain type home loans for Income tax benefit do we need Provisional certificate at start of FY or Actual Certificate from bank at end of FY? As there can be a lot diff between Provisional and Actual certificate on Interest paid.

    Regards,
    Kapil

    1. ashalanshu says:

      Dear Kapil, due to positive compounding, the FD option ‘ll be better in the long run. to keep the matter simple from your employer’s point, please demand the provisional letter only in Dec Jan so that 9-10 months interest ‘ll be factored in already and very little ‘ll change.

      Thanks

      Ashal

  71. Sudarshan B says:

    Hi Ashal,

    I have already availed a loan from SBI. how can I get to know my cibil score?

    1. ashalanshu says:

      Dear Sudarshan, please go to CIBIL site, fill in your details. Pay the fee and the cibil report and score ‘ll be there in your e-mail id.

      Thanks

      Ashal

  72. sunnyvijay says:

    Hi,

    In the above discussions it has been claimed that the home loan interest paid on Max Gain loan is fully exempt from tax, if the property is let out and not self occupied and adhering to other conditions as applicable.

    When I try to file my IT Return online (via taxsmile) they provide exemption of home loan interest only up to 150000 though its a let out property.

    Can others tell me how do they file their IT return ? anybody can suggest a good site which supports for claiming the full home loan interest instead of the 150000 ?

    Or doing it manually is the option ?

    Thanks

    1. ashalanshu says:

      Dear Sunny,how about filing on your own?

      Thanks

      Ashal

  73. Reji m says:

    Hi Ashal,

    I’ve 2 dounts:
    1. Is it possible to interchange the “primary” and “secondary” applicants. I heard SBI offers a discounted rate if a woman is the primary applicant. (At present I am the primary applicant and my wife is secondary)
    2. My current interest rate is 10.4, but the current rate is 10.15, is it possible to shift to this new rate with or without any fees (My loan amount is not fully released to the builder, it will take another 9-12 months for completion)

    Thanks
    Reji

    1. ashalanshu says:

      Dear Reji, no you can not interchange primary and secondary applicants. To get a lower ROI, please apply with your loan serving branch for rate reduction. You w’d have to pay a conversion fee to get lower ROI.

      Thanks

      Ashal

      1. Reji m says:

        Thanks Ashal! I changed my ROI, it is not possible to this from the branch. You have to visit RACPC.

        1. ashalanshu says:

          Dear Reji, in my personal case, the ROI was changed at my home loan serving branch itself. To add – I did not even go there on my own. As I was out of India, hence my friend went there for me and got it done.

          Thanks

          Ashal

  74. chandan blr says:

    Hi ,
    I missed telling that , its a self constructed independent house (Got the construction done by hiring labours/labour contractors ).

    1. ashalanshu says:

      Dear Chandan, please file a demand note to SBI to release the remaining amount to pay out to your contractors.

      Thanks

      Ashal

  75. ashalanshu says:

    Dear Chandan, your builder should raise the demand for final disbursal if construction is over.

    Thanks

    Ashal

  76. chandan blr says:

    Dear Ashalanshu,
    Is there any specific thing I should do to get my last disbursement (have already got 12 lakhs in 3 installment , remaining is 6 lakhs).

    What is that I need to get my last disbursement and active transaction ( so that I can put/get money into OD account) , is there a need for completion certificate or ?

    Regards

  77. ashalanshu says:

    Dear Prateek, your loan is partially disbursed or fully disbursed?

    Thanks

    Ashal

    1. leanprateek says:

      My Loan is partially disbursed . I have started my EMI also .

      MY EMI is Rs 20, 685. I am putting my extra saving in OD account .

      What is debit interest ?
      Please help me explain below as well…

      Description SBI H L MAXGAIN OD (DEC13)
      Name Mr. PRATEEK KAPOOR
      Book Balance -12,11,706.00
      Available Balance 10,38,294.00
      Limit 22,50,000.00
      Uncleared balance 0.00
      Drawing Power 22,50,000.00
      Currency INR
      Rate of Interest (% p.a.) 10.1%
      Lien Amount 0.00

      1. ashalanshu says:

        Dear Prateek, debit interest is the interest charged on you on the disbursed loan amount with the adjustment of surplus money parked by you.

        How much loan amount is disbursed as on date?

        Thanks

        Ashal

          1. ashalanshu says:

            Dear Prateek, the interest is charged on 15L Rs. amount. the extra amount paid by you in your regular EMI is becoming part of your available balance.

            Thanks

            Ashal

  78. leanprateek says:

    Account Number 00000033628318971
    Description SBI H L MAXGAIN OD (DEC13)
    Name Mr. PRATEEK KAPOOR
    Book Balance -10,52,490.00
    Available Balance 11,97,510.00
    Limit 22,50,000.00
    Uncleared balance 0.00
    Drawing Power 22,50,000.00
    Currency INR
    Rate of Interest (% p.a.) 10.15%
    Lien Amount 0.00

    PLEASE HELP me explain

  79. Reji m says:

    Hi Ashal,

    Does the interest amount charged vary from month to month? From my sbi max account Rs 40,00,000/ was issued to the builder as on 20 Dec 2013. After this no payment is given to the builder ( next payment is another 2 months away). When I checked the interest outgo, each month it varies! Why is it happening?

    Jan 14 I paid 37,106.00 as interest
    Fed 14: 33,299.00
    Mar 14: 36,526
    Is it calculation error?

    1. roshan says:

      On a quick glance it appears proper. Please note that interest is calculated as follows

      (outstanding principal * no.of days in month * rate of hundred) / (365 *100)

      Jan has 31 days,Feb has 28 days,March has 31 days.Hence the variance.

      1. roshan says:

        *In above it should be rate of interest & not rate of hundred

        1. Reji m says:

          Thanks Roshan!

    2. ashalanshu says:

      Dear Reji, any more query?

      Dear Roshan, thanks for answering it.

      Thanks

      Ashal

  80. ashalanshu says:

    Dear Pankaj, in your case, the SBI’s software has erred and wrongly adjusted money towards drawing power from your undisbursed loan amount. Please contact your loan serving branch to get it rectified. In the mean time, you may park your EMI amount on your own.

    Thanks

    Ashal

    1. pankajgaud80 says:

      Hi Ashal,

      As per your Suggestion I have parked the EMI amount on 12th Apr. The a latest data account statement is as below
      Description SBI HL MAXGAIN OD(WOMEN-DEC13
      Book Balance -15,07,189.00
      Available Balance 14,64,540.00
      Limit 29,71,729.00
      Drawing Power 29,71,729.00

      I have asked SBI about the change in my loan limit the answer is “Since, you have opted for EMI option, the limit gets reduced to the extent of EMI payable every month. Hence, the limit with not remain constant throughout, it gets reduced every month” and I ask again for the limit was 30 lack and the answer is “Your total limit is 30.00 lacs only. In the system it gets reduced as the loan is Maxgain scheme. Hence, need not worry about the system details as I have explained you already.”

      I am still not able to understand the account details.
      Is somthing wrong in my account?

      1. ashalanshu says:

        Dear Pankaj, the drawing power should come down from EMI repayment not from undisbursed loan amount.

        Thanks

        Ashal

        1. pankajgaud80 says:

          Please tell me what to do?

          1. ashalanshu says:

            Dear Pankaj, contact AGM retail Loans of your RACPC and discuss your issue with him/her.

            Thanks

            Ashal

  81. pankajgaud80 says:

    Hi Ashal,
    Can you help me in understanding the SBI Max gain account details?
    Book Balance -15,39,611.00
    Available Balance 14,32,118.00
    Limit 29,71,729.00
    Uncleared balance 0.00
    Drawing Power 29,71,729.00
    Currency INR
    Rate of Interest (% p.a.) 10.1%

    My loan section limit was 30,00,000. First loan amount disbursement was on 28th Mar 2014 Rs. 15, 39,611. My EMI start date 5th Apr 2014 (32422, Full emi from day 1). I have paid the March interest Rs. 1704 transfer through SB account
    I opt for EMI repayment through ECS from my salary account. This month EMI is not debited from my bank. I inquired about this so bank told that it will take 15 days.
    I checked my account today so the limit is changed to 29,71,729 from 30,00,000.
    Is this due to EMI is not debated from my bank?

  82. ashalanshu says:

    Dear Mehul, what’s your 2nd question?

    Thanks

    Ashal

  83. ashokkms says:

    Hi

    I took a SBI Max Gain Loan(40L) of Jan 2013. I have SBI OD account and Saving account to repay the loan EMI. I do have online access for those accounts.

    (1) I can transfer money from Savings to OD account. But the reverse is not possible. The SBI online system doesn’t give me the option for OD to Saving account transfer. Do i need to do fill some forms to get this option enabled?

    (2) I want to pre-pay some amount of the loan (5L). Is that good enough to just transfer the pre-payment amt to the OD account? Or do i need to do something else?

    Thanks
    Ashok

    1. ashalanshu says:

      Dear Ashok, has your loan been fully disbursed or partial disbursed? In case it’s fully disbursed, please ask for transaction rights for your OD account from the loan serving branch.

      Please park the 5L Rs. amount into OD account to get the benefit of lower interest outgo. Once transaction rights are there with you, this 5L Rs. can be redeem in case of need.

      Thanks

      Ashal

      1. mehulhirpara says:

        Dear Ashalanshu,

        I was having same two questions and you have resolved first one. Could you also provide some comment on second question on pre-pay option.

        Thanks,
        Mehul

  84. roshan says:

    Dear Ashal,
    Assuming that best practices discussed in forum are mentioned above does it make any difference if EMI date is 5,15 or 25 ?

    My thought is that the date should not matter if we create a SI to move emi amount from MG to SB one day before emi due date

    Is my assumption proper or there any benefits of choosing an early date or later date?

    Thanks
    Roshan

    1. ashalanshu says:

      Dear Roshan, this EMI date benefit ‘ll be in the first month only after that, it does not matter but due to this first month, there ‘ll be a bit more interest saving and it ‘ll create a Gap in over all interest payment. This Gap is small, may not look meaningful for few people but Gap is Gap. 🙂

      Thanks

      Ashal

      1. roshan says:

        Hello Ashal,

        I am not clear on how there will be EMI date benefit for first month if i park all surplus funds from day 1 in MG ?

        Thanks,
        Roshan

        1. ashalanshu says:

          Dear Roshan, do you have Drawing power equal amount to park into your MG account? If the answer is yes, no impact ‘ll be there on interest due to your EMI date. But if you are parking only partial amount, the EMI amount deposited on a earlier date means the interest part of EMI ‘ll remain as part of surplus amount for few extra days and it ‘ll impact the interest calculation and ultimately a bit less interest ‘ll be paid.

          Thanks

          Ashal

          1. roshan says:

            Hello Ashal,
            I have a basic question. Let us assume that my emi date is 10th of every month. Now interest to be deducted at end of the month will be calculated from 1st to end of the month or from 10th of previous month to 10th of current month?

            Thanks,
            Roshan

            1. ashalanshu says:

              Dear Roshan, the interest is calculated on daily basis from 1st to last day of the month in question.

              Thanks

              Ashal

      2. coolrohitlad@gmail.com says:

        Hi Ashalanshu,

        First of all thank you for putting this extremly helpful information here.

        I have home loan of 34 Lakh in ICICI bank at ROI 10.65%. My current outstanding balance 33 Lakh. Right now SBI have ROI 10.15%.

        If I transfer my current loan to SBI then Balance transfer cost will be approx 38,000 Rs. (16,000 processing fee + 18,000 mortgage charge + 4,000 other charge).
        Following is my questions.

        1. Should I transfer my loan to SBI? I am hasitating becasuse I need to pay extra 38,000 Rs.
        2. Is there de-mortguage charges applicable when loan is closed?
        3. If I decide to transfer my loan to SBI Maxgain then,
        a. Which one is preferable? Invest 2 Lakh Rs. in FD for 2 years at 9.5% ROI OR parking 2 Lakh in Maxgain OD account?

        b. can I continue my ICICI lombard Insurance policy after transfering loan to SBI.

        c. Is general home insurance is compulsory to take from SBI. I already have home insurance from ICICI bank.

        Please advise.

        Thanks,
        Rohit

        1. ashalanshu says:

          Dear Rohit, in my personal view, if merely the ROI is the main pain point, please opt for ROI conversion within ICICI by paying a conversion fee of 0.56% of your outstanding balance amount.

          Your take please.

          Thanks

          Ashal

          1. coolrohitlad@gmail.com says:

            Hi Ashalanshu,

            Thanks for your reply.

            1. ROI is one of major point but in addition to that I also concerned about maintaining liquidity of my money. Because I don’t have much saving which I can use in some emergency, I think Maxgain will allow me to withdraw the money anytime I want. ICICI does not have this facility.
            I also come to know that for March month processing fee of SBI will 1000+service tax fix. So in my case transfer cost will be approx 20,000.
            So do you think it is still not advisable to transfer.

            2. Is there de-mortguage charges applicable when loan is closed?
            3. If I decide to transfer my loan to SBI Maxgain then,
            a. Which one is preferable? Invest 2 Lakh Rs. in FD for 2 years at 9.5% ROI OR parking 2 Lakh in Maxgain OD account?

            Thanks,
            Rohit

            1. ashalanshu says:

              Dear Rohit, OK. Go ahead.

              No there are no demortgage charges. As you want to use money for emergency also, park it in Max Gain.

              Thanks

              Ashal

            2. coolrohitlad@gmail.com says:

              Thank you Ashal for your useful guidance.

              Rohit

  85. ashalanshu says:

    Dear Roshan, in case of Max Gain, loan term becomes insignificant as interest outgo changes based upon your surplus amount. So 15-20 or 25 or even 30Y loan can be taken for Max Gain.

    thanks

    Ashal

  86. roshan says:

    Dear Ashal,
    Correct me if i am wrong here. In a normal home loan scheme taking a shorter tenure loan makes more sense as you would be paying lesser interest overall at end of the tenure compared to a higher tenure loan . (assuming that borrower can afford emi difference between a 15 year and 20 year loan with their current take home salary)

    However in case of Maxgain the interest savings will be same irrespective of tenure if a borrower follows all recommendations mentioned in this discussion( i,e park surplus funds in MG account,use credit card to pay bills,transfer salary to MG account on day of credit,Create SI to move funds from SG to Savings a/c 1 day before emi date etc ) . Is this assumption proper? Or does it still make sense to go for a lower tenure loan?

    Thanks
    Roshan

  87. ashalanshu says:

    Dear Roshan, it’s overdraft.

    Thanks

    Ashal

  88. roshan says:

    Dear Ashal,

    when adding maxgain account as 3rd party account in HDFC which option should i choose

    a) Current
    b) Overdraft
    c) Loan

    Thanks,
    Roshan

  89. Bala says:

    Dear Ashal,

    Looks like when I got my regular home loan converted to Maxgain, the Insurance cover policy premium (that was unused ) also added to the Limit and drawing power. This affects in finding what is actually the Available Balance or the exact surplus I have in my account.

    I am sending the statements of my account to your email

    Kindly review and give your comments so that I can understand the statement better

    1. ashalanshu says:

      Dear Bala, thanks for the update. Let me check my personal mail and ‘ll answer you there.

      Thanks

      Ashal

      1. Bala says:

        Thanks Ashal for your help and guidance over email

        I will contact SBI RACPC tomorrow as I am on travel from Wednesday

        If something useful for everyone comes up I will post details.

        Regards
        Bala

        1. Bala says:

          Dear Ashal,

          The branch is completely ignorant about the details

          I contacted RACPC on the issue of DP and Limit being higher in my Maxgain. As there are too many details I had sent you a personal mail instead of posting here. (Sorry for a long mail)

          If you can clarify them it would be great.
          Regards
          Bala

          1. ashalanshu says:

            Dear Bala, I confirm the receipt of the personal mail. Please wait for my personal reply. 🙂

            Thanks

            Ashal

  90. icoshikhar says:

    Hi,

    I have recently take home loan from SBI. It got sanctioned on Jan 25, 2014. I have not yet paid an EMI. They have provided me Term Loan account under the Yuva Loan scheme. Is it possible to convert it to Max Gain account now? Please help.

    I went to SBI RACPC. They said it is not possible as I have YUVA Loan.

    Requesting prompt response,

    With Regards,

    Shikhar Maheshwari

    1. ashalanshu says:

      Dear Shikhar, please contact your AGM in RACPC for clarification on the matter.

      Thanks

      Ashal

  91. ashalanshu says:

    Dear Rohit, what’s your drawing power on both dates? Can you share your account statement with me in exl. sheet over my personal mail id?

    Thanks

    Ashal

    1. rohit says:

      Hi Ashal,

      I have shared excel. Please help on this.

      Thanks,

      1. ashalanshu says:

        Dear Rohit, I confirm the receipt of your mail. Please wait for my detailed reply over e-mail.

        Thanks

        Ashal

  92. rohit says:

    Hi,

    I have loan of 32,50,000 + 1,14,000 sbi life shield. Total is 33,64,000 with ROI 10.4%.My final disbursment is done on 20th Jan and EMI is 29,867. In jan the Book Balance was -32,68,264 and Available balance was 1,87,059(which includes my saving money as well).
    On 1st feb the Book balance was -31,68,424 and debit interest is 23,027 and Available balance is 1,93,152.
    Can you please explain how this is calculated. How the difference of 99840 in book balance and 6093 in avalable balance is calculated.
    Thanks.

  93. ashalanshu says:

    Dear Jatin, please opt for rate switch over post final disbursal.

    Thanks

    Ashal

  94. jatin says:

    Subject: How to calculate, should I switch interest rate or not?

    Hi,

    SBI Maxgain gives an option to switch interest rate one in life time to existing user. This will be liable to .59 of limit/drawing power.

    Drawing power/limit can’t be reduce until builder handover the property & get registration.

    As of today, I have limit of 22L. Current book balance ( of -6.75L).
    I will required additional 6.5L for registration & make remaining payment to the builder. Which means I’m going to use only 13.25L out of 22L.
    I’m expecting to get position within 3 months.

    I’m in dilemma, should I switch interest rate today or I should wait for another 3 months to get the position & switch.
    How to calculate the EMI difference for both the interest rate to know I will gain/lose money by switching interest rate (consider .59 penalty need to pay + interest on that over a period)?

  95. ashalanshu says:

    Dear Rohit, the EMI credit is called Deposit transfer.

    Thanks

    Ashal

  96. rohit says:

    What is DEPOSIT TRANSFER in max gain

  97. luckyr18 says:

    i m giving info because i have two max gain accounts

  98. luckyr18 says:

    i m giving info.

  99. luckyr18 says:

    interest in od account is counted on per day basis.

    1. ashalanshu says:

      Dear Lucky, are you asking or giving info? Yes the home loan in Max Gain is on daily reducing balance.

      Thanks

      Ashal

      1. luckyr18 says:

        i m giving info because i have two max gain accounts

  100. Parag Kumar says:

    Hi Ashal,

    I had a small doubt. Whenever the EMI is deducted from our account, the same gets credited to OD account and from that, the interest gets deducted on the last day of the month. Does our OD account earn interest for the EMI amount credited to the OD account from the day its deducted till the last day of the month?

    Means suppose i have a EMI of 30k which is deducted on 10th of every month. This EMI amount gets deducted from my savings amount and gets credited to my OD account on the 10th of every month. This 30k remains in my OD account upto month end i.e for almost 20 days. So my question is does this amount of 30k in OD account for 20 days every month contribute in reducing the interest amount deducted at the end of every month.

    Thanks,
    Parag Kumar

    1. ashalanshu says:

      Dear Parag, NO, there is no interest earning in OD account. The thing is if there is any surplus parked by you, it ‘ll bring down your book balance and thus the calculated interest ‘ll be lower and accordingly this lower interest ‘ll be debited on the last day of the month. Remaining interest ‘ll be there in OD account as it is becomeing part of your already available surplus.

      Thanks

      Ashal

  101. ashalanshu says:

    Dear Hitesh, can you share your loan account statemwnt in exl. with me?

    Thanks

    Ashal

  102. ashalanshu says:

    Dear Rajesh, you are not paying interest twice. On EMI date, the interest part of EMI is merely credited into your OD account after it’s transferred from your SB account. On the last day of the month, the actual calculation of interest takes place and accordingly the calculated interest is debited from the OD account not the one you paid through your EMI.

    The 12.25% ROI is due to old loan, you have the option to convert it to a lower ROI by paying a conversion fee of 0.56% of your as on date drawing power.

    Thanks

    Ashal

  103. rajeshaggy says:

    I have a home loan of Rs 40 Lakhs taken in 2009 alongwith MG acct facility. Currently my balance in max gain is about (-) 18,14,245 and available balance is 20,49,971. Drawing power is 38,64,216. The rate of interest being charged is 12.25%. The interest per month is working out to the tune of 18-19000 per month. In addition an EMI of 34830.00 is being transferred from my SB to OD every month after a moratorium of 18 months. I keep on putting surplus funds in OD acct as and when avail to me.

    Now my question is

    (a) Why is the interest at the rate of 12.25% is being charged again monthly as I believe that the EMI which I am paying contains the interest and principal component both for the entire loan amount for the entire loan period. So why is the double charging of interest??
    (b) If double interest is being charged where is it being adjusted??
    (c) The entire EMI gets deducted against Rs 40 Lakhs Principal?? Does this mean that interest component of EMI is treated as zero and the interest is levied at the end of the month??
    Please reply ASAP

    Thanks

  104. hiteshpanchal says:

    Dear Ashal,
    Thanks for the tips on using SBI Maxgain acount. I have a SBI MG acccount with a total loan of Rs. 22,25000. The account started in Sep 2011. Today I just parked a surplus amount of Rs 2000 from my salary acccount to the SBI MG account to check the netbanking transaction. But after the transaction aslo I could see the Available balance as Zero. Instead the amount got reduced from Book Balance . Previously the Book Balance was -21,43,032.00 which has now become as -21,41,032.00.. Does that mean that I have done a pre-payment of Rs 2000 which I cannot withdraw again.
    Also I tried to add my salary account as beneficiary into the OD account, but couldn’t find any option to do so.
    Note: My SBI MaxGain Account is linked with another SBI Joint account an I have a single user-Id for both.

  105. ashalanshu says:

    Dear Sunnyvijay, thanks for the praising words. Regarding your query, If all the down payment money for the house is paid by you and your wife’s name is only for operation purpose and the fact that she is a home maker, you can claim full interest for yourself. Please do note, if the house is self occupied, the maximum interest ‘ll be limited to 1.5L Rs.

    Thanks

    Ashal

    1. rajeshaggy says:

      I have a home loan of Rs 40 Lakhs taken in 2009 alongwith MG acct facility. Currently my balance in max gain is about (-) 19 lakhs and available balance is 19 lakhs. The rate of interest being charged is 12.25%. accordingly the interest per month is working out to the tune of 18-19000 per month. In addition an EMI of 34830.00 is being transferred from my SB to OD every month. I keep on putting surplus funds in OD acct as and when avail to me.

      Now my question is

      (a) why is the interest at the rate of 12.25% is being charged again monthly as I believe that the EMI which I am paying contains the interest and principal component both for the entire loan amount for the entire loan period. So why is the double charging of interest?? Please reply ASAP

      Thanks

  106. sunnyvijay says:

    Dear Ashal,

    Never in history of internet I have seen anyone answering queries for the benefit of others and their enlightenment like what you are doing on this forum. Great Job.

    One quick query:
    House owned jointly in my and my wife`s name
    Max gain loan with my name and my wife`s name
    However my wife is not working and a home maker.

    In that case can I claim 100% of interest paid (whatever applicable within limits) or I can claim only 50% of interest paid ?

  107. ashalanshu says:

    Dear Dr Kishan, thanks for your praising words. For your understanding – Bank is not maintaining 2 separate accounts. There is only one account which is Max Gain or OD account. Yes in the system, the loan amortization schedule is fed to calculate the principal part that’s to be recovered from each EMI. So reduction in Drawing Power happens only on the basis of this loan amortization schedule. Basic calculation of OD account, interest is done as per a routine OD account.

    If you want to use the section 80C benefit, over and above the routine EMI repayment. you w’d have to contact your loan serving branch to adjust the principal as per your need from the available surplus.

    You can withdraw only available balance. If it’s 5L, your maximum limit is 5L. You can not withdraw 10-15L from your account. So Available balance is key here to look out for.

    This 1Rs. thing may be due to some software related problem (back end job in SBI). So contact loan serving branch to get the job done.

    Thanks

    Ashal

  108. kishanm77 says:

    Dear Ashal,
    Hats off to you. Your patience in answering each query pointwise and clarifying each doubt is phenomenal. If only some more experts like you were available then the situation would be quite different in the financial world.
    About the working of Maxgain, does the bank maintain two accounts or two sections in the same account so as to identify the principal repayment component of EMI and the surplus amount kept parked there by the customer. Because as you said there is no relief in income tax for the amount parked as surplus but there is surely a relief on the principal repaid as part of emi. That simply means the bank must keep a track of both heads separately or else they would not be able to give the interest certificate at the end of the financial year.
    Secondly is there any system of part prepayment in Maxgain as there is in the classic home loans. As you know whenever we make a small payment in the classical loans, although the money is gone forever, it is considered as principal repaid and thus is countable for the income tax savings under section 80c (max 1 lac). This, as I understand is not available in Maxgain system since there is no part prepayment. If we put extra amount in MG account it is treated as surplus and not as principal repaid and thus will not be countable towards 80c savings. Am I correct? If I am correct then it means that people having loans with total scheduled yearly principal repayment of less than Rs 1 lac may be at a disadvantage in Maxgain system since the option of part prepayment of home loan and using it for reducing income tax is not available in Maxgain system
    Thirdly, suppose I am NOT making any surplus parking in the MG account and am just paying the normal monthly EMI can I still withdraw a part of the repaid principal (as a part of EMI)? In other words can i withdraw more than the surplus amount parked in that account? Like if my loan outstanding is Rs 25 lacs and I park 5 lacs for decreasing interest outgo, then if need arises, can I withdraw something like 10-15 lacs for some other purpose and use this money for my personal requirement instead of getting some personal loan as the ROI of personal loan is anyways higher than Home loan ROI. If yes then what is upperlimit upto which I can withdraw again? If it could be done then there is a big advantage of maxgain system.

    I recently shifted from SBI easy home loan (also called term loan) to SBI maxgain system. As I understood from the bank officials at RACPC this has been made possible only after August 2012 and is described in SBI MASTER CIRCULAR HOME LOAN PART 3 PAGE 40. The processing fees they took for this purpose is RS 1000. The ROI, term of the loan etc remain the same as in the original loan. They do this by opening a new OD account and debit the OD a/c and repay the original home loan account(the loan account no. changes and therefore there is a requirement of re-doing the ECS process altogether) i.e. as good as a balance transfer from SBI to SBI. But one strange point was that they did not close the original loan account completely. They left Re 1 as remaining and asked me to foreclose the original loan account in the concerned branch. I wonder why they couldn’t the fore close the original account themselves.

    Thanks in anticipation
    Dr KISHAN

  109. ashalanshu says:

    Dear Tutun, in wordings of section 24 (b), there is no mentioing that home loan should be only a term loan and Over nDraft kind thing is not eligible. Please ask the commissioner to provide you in writen that OD/Current account is not eligible for 24(b) benefit.

    Alternatively you may approach to higher ups in Income Tax department.

    Thanks

    Ashal

  110. tutun says:

    During a tax audit (scrutiny case U/S 142(1) )by Deputy Commissioner of Income Tax at Kolkata, I was questioned regarding my MaxGain loan.
    I paid 1.73 lac as interest for a particular FY for my MaxGain home loan and had taken the tax benefit of 1.5 lac.
    The officer claimed that this loan is not eligible for the tax break and he will charge me tax on it. His reasoning was that this was not a term loan and my bank statement shows that I have used it as a current account.
    I am totally at a loss, and need supporting material to show the officer. I have called SBI and they are yet to get back to me.
    Can anyone help please with some pointers to tax laws?
    Thanks in advance.

  111. ashalanshu says:

    Dear Bhavin, please contact your loan serving branch for actual principal adjustment from your EMI.
    thanks

    Ashal

  112. bhavin says:

    Dear Ashal,

    Thanks a lot for putting this article. By reading your article I made a decision to change my loan from Private bank to SBI Max gain. Now my home loan is transferred to SBI Max gain. I have few doubts. before that let me give you the details of my loan. I got loan sanctioned as Rs. 19,41,000 (Somewhere in jul-2012) based on the balance of my Previous bank loan amount. By the time i got disbursment (7th Oct -2013) from SBI, it got reduce to 19,12,151. SO SBI Disbursed Rs. 19,12,151. But my limit was not changed and accordingly i was not given the transaction rights on my OD account. I asked them to reduce the limit and the transaction rights which i was given yesterday (i.e. 11th Nov-2013). I have paid first EMI of 18667 on 01st nov -2013. Account shows debit interest of 13163 on 31st oct 2013. Even after paying the first EMI, my drawing power is still as 19,12,151.

    Question:Should not Drawing Power be reduced to the principal amount paid of one EMI?

    Thanks,
    Bhavin

  113. msherikar says:

    Hi,
    My question is about the MaxGain Account with SBI.
    1) How to add SBI Max gain Home Loan Account in ICICI Bank Net Banking??
    I have added My SBI Maxgain Account as Loan Account in 3rd party Transfer.. Is that correct??
    Should i add it as Current Account or loan Account while adding in my ICICI 3rd party Transfer??
    Please do clarify me on this issue..
    – See more at: http://sohamfp.com/sbi-maxgain/#comment-20061

    1. ashalanshu says:

      Dear Msherikar, please opt current account in ICICI netbanking.

      Thanks

      Ashal

  114. Aarav says:

    Hi Ashal ,

    Could you please let me know which would be better investment(home loan is in name of my wife and me and both are paying EMI’s jointly)

    1. SBI maxgain at 10.05 %.With this i get income tax rebate @30% on interest part so the effective yield is 10.05- 3%=7%

    2. Fixed deposit at 9%.On this income my wife is not eligible for income tax as my wife left the job and is currently income-less and all the FD would be in her name(Since before she left the job she contibuted 5 Lacs in SBI maxgain account and now she can transfer that amount to her normal bank account and create a fixed deposit out of it).So effetive uield remains as 9%

    Is my calculation correct ot is investing in FD a bad idea ?

    Regards

    Sumant

    1. Aarav says:

      help…Please answer …my above query

      1. ashalanshu says:

        Dear Aarav, due to positive compounding, FD ‘ll provide better return over Max Gain in the long run.

        Thanks

        Ashal

  115. ashalanshu says:

    Dear Ramp, HSBC, CITI, Standard & Chartered, IDBI are offering similar product. PNB is also offering a combo product where 80% loan amount remains as normal home loan and remaining 20% as OD. Please check on your own also, if any other bank which is available but not included by me.

    ICICI was earlier offering this product under the brand name, Money Saver Home Loan, but withdrew for new customers.

    Thanks

    Ashal

  116. ramp says:

    Thanks for the Quick Response Ashal.
    So it looks like there is no need of SB Account, as we can pretty much use OD account to transfer funds/pay bills/misc usage.
    Please confirm once.
    Is any other bank providing such facility apart from SBI?

  117. ashalanshu says:

    Dear Ramp, let me try to answer your queries.

    1. Can I be the main applicant for home loan process? I am inclined to do this, otherwise the money transfer and misc processes will need my wife’s presence/signtature.
    Yes. actually both of you should be co-owner and co-applicant to be eligible to claim tax benefit individually from the property.

    2. I am planning to park small amount for surplus account(OD) as just now initial disbursement happened. But I do not have SBI SB account.
    Are they providing SB account as part of this complete Max gain loan process?
    You may open a brand new Sb account in your loan serving branch. You ‘ll get netbaking rights immediately on this new SB account.

    3. After the final disbursement happens if needed, will I be allowed to transfer money from OD to different bank SB account online?
    Yes.

    4. From the thread, I saw that you suggesting transferring complete salary to OD account and using SB credit card from daily expense usage.
    This means, for credit card bill payment I need to transfer required amount from OD, is that can be done online? or need to transfer to SB account through OD Cheque and then usenet banking for credit card payment. Also, please let me know OD account is as good as normal account, in the sense i will be able to do Third party transfer from any other bank account to this account online?
    I’m paying my own Insurance prem., railway and airline ticket booking, online shopping, all Crdit card bills other bank acount transfer from my own OD account.

    5. From the above thread, it clearly evident that eventhough you have parked surplus amount, you will be paying same EMI/Interest just that whatever will be the saving due to surplus will get added to your OD account each month and you can make use/transfer only once the final disbursement happens.
    EMi ‘ll remain same but the interest saving ‘ll be available to you as surplus. Yes till final disbursal, you can not withdraw this added surplus (saved interest).

    Thanks

    Ashal

  118. ramp says:

    Hi Ashal,

    I must say this forum/blog has got very valuable informations. Appreciate the initiative that you have taken.
    I have recently purchased property worth around 88 lakhs. So I will be taking loan of 70 lakhs from SBI Max gain.
    My wife is main applicant for the Property and I am co. Possession/final disbursement will happen in 2016.
    My queries:
    1. Can I be the main applicant for home loan process? I am inclined to do this, otherwise the money transfer and misc processes will need my wife’s presence/signtature.
    That might make the process more lengthier.
    2. I am planning to park small amount for surplus account(OD) as just now initial disbursement happened. But I do not have SBI SB account.
    Are they providing SB account as part of this complete Max gain loan process?
    3. After the final disbursement happens if needed, will I be allowed to transfer money from OD to different bank SB account online?
    4. From the thread, I saw that you suggesting transferring complete salary to OD account and using SB credit card from daily expense usage.
    This means, for credit card bill payment I need to transfer required amount from OD, is that can be done online? or need to transfer to SB account through OD Cheque and then use
    net banking for credit card payment.
    Also, please let me know OD account is as good as normal account, in the sense i will be able to do Third party transfer from any other bank account to this account online?
    5. From the above thread, it clearly evident that eventhough you have parked surplus amount, you will be paying same EMI/Interest just that whatever will be the saving due to surplus will
    get added to your OD account each month and you can make use/transfer only once the final disbursement happens.

    Eagerly awaiting for your reply.
    Thanks Ashal.

  119. Santosh Mahajan says:

    Thanks a lot Ashal!

  120. ashalanshu says:

    Dear Santosh, first of all congratulations to you for getting the possession of your house. Regarding transaction rights, if final disbursal is done, contact your loan serving branch and you ‘ll get it immediately.

    Regarding Tax benefit for past years’ interest, it ‘ll be available to you within the over all limit of 1.5L Rs. @ 20% in 5 successive FY starting from 2013-2014, if the house in question is self occupied. If the house is on rent, There ‘ll be no limit of 1.5L Rs.

    thanks

    Ashal

  121. Santosh Mahajan says:

    Dear All,

    Finally after almost 2.5 years of wait time, I got the possession of my home.
    I have SBI maxgain account with 1Lac available balance. Now I want transaction rights on that account. I know that we need to contact the base branch to get that. But do I need to produce any documents to get transaction rights.
    On the other hand how can I claim the interest in my IT returns for all these 2.5 years?

    Thanks in advance,
    Santosh.

  122. rohit says:

    What is debit interest in SBI Max gain

    1. ashalanshu says:

      Dear Rohit, the Debit Interest means the interest amount is debited as per calculation on the last day of the month. Whenever you are depositing any amount be it your EMI or surplus fund parkingit’s a credit entry.

      Thanks

      Ashal

  123. ashalanshu says:

    Dear Dhruv, Relax. I do have several examples with me for parking money in MG account before final disbursal.

    Thanks

    Ashal

  124. dhruvbudhwar says:

    Hi Ashal

    I Happen to speak with a bank representative on this same issue. They say it is not allowed to put any money in the Max Gain Account before possession of the property. They say this can lead to the closing of the loan account.

    Can you please throw some more light on this.

    Thanks.
    Regards
    Dhruv

  125. dhruvbudhwar says:

    Thanks Ashal.

  126. ashalanshu says:

    Dear Dhruv, yes the surplus parked by you ‘ll help to save interest outgo. So you may park the extra money.

    thanks

    Ashal

  127. dhruvbudhwar says:

    Hi Ashal,

    I had opted for the 18 month moratorium period , but now i can manage paying the full EMI amount 40K a month. Is it advisable for me to start putting money equivalent to my EMI amount in the MaxGain Account?

    The property i have invested is under construction and i am expected to get possession around June 2015.

    I do understand that i will not be able to withdraw any money from the account till possession.

    Regards Dhruv

  128. Dear Deepak, Please wait for my reply again as usual. 🙂

    thanks

    Ashal

    1. knssiva says:

      Hi Ashal,

      I have SBI maxgain account and SBI general insurance.

      Is any of the above products cover the EMIs incase of jobloss. Please advise.

      Regards,
      Siva

      1. ashalanshu says:

        Dear Knssiva, no jobloss is not covered.

        thanks

        Ashal

  129. Dear Kulkarni, thanks to you that a lot of people got benefited from this thread.

    thanks

    Ashal

  130. Dear Bala, in first case – parking only & no adjustment towards loan, you saved interest but loan ‘ll run for 12Y term & liquidity is there with you for this 5L Rs.

    For 2nd case, as the 5L Rs. is adjusted towards the basic loan. immediately the principal repayment share in your EMI ‘ll increase & your loan ‘ll be over early.But liquidity of 5L Rs. is not here.

    So take your pick.

    thanks

    Ashal

    1. Bala says:

      Thanks a ton Ashal

      I was just trying to work out whether I will save any amount
      – by keeping the surplus in SBI Maxgain
      – or by prepaying the principal

      I looked at a hypothetical situation. Please clarify whether it is correct?

      Loan Amount = 30 L
      term remaining 12 years
      Surplus available in hand = 30 L

      I just worked out the excel sheet for SBI Maxgain for this situation. I found that every month I get an additional interest surplus equal to the EMI amount – over and above the outstanding principal – which I need to withdraw – since that amount will not gain any interest in the Maxgain account.

      Every month I should draw this amount to keep
      the surplus in the account = outstanding Loan principal

      and pay it back as the EMI for that month.

      Hence can we say that – under the remote situation that we do not need the liquidity of the amount

      – paying back the loan amount and foreclosing the loan
      AND
      -starting with the 30L and keep drawing the amount equal to the EMI to keep surplus equal to outstanding principal every month

      will both be SAME in terms of interest out go for the account holder?

      Basically by keeping surplus in the MAxgaininstead of foreclosing, you end up having access to the funds equal to Principal during the entire tenure – liquidity.
      Am I correct?

      1. ashalanshu says:

        Dear Bala, yes your understanding is correct.

        thanks

        Ashal

  131. Dear Deepak, it seems I have answered all your queries in personal mail. Do you want me to repost the same here or is it OK to you?

    thanks

    Ashal

    1. Deepak says:

      Thanks Ashal. I don’t think it is required to paste your replies to my email here. However, could you pls have a look at your mail. I had a few follow-up questions, if you could kindly respond.
      Regards,
      Deepak

  132. Deepak says:

    Dear Ashal,

    I am new to this forum, and have recently purchased a flat in Mumbai. I am going through all your posts and must-say, they are all very informative. Appreciate all the kind effort. A few questions from my side, if you could pls help with, at your convenience:

    Can the Stamp duty, Registration, Service Tax & VAT charges be claimed under Section 80C for an Under Construction flat in Mumbai?
    If yes, will this all be a part of the combined maximum limit of Rs 1 lac under section 80C or will this 4 charges be considered over and above the Rs 1 lac limit?

    Property insurance:
    I understand from your earlier posts that property insurance is mandatory for taking a loan from SBI. However, do i have to take this property insurance now (when the flat is under construction) or would it be required to be taken only once I get the possession?
    Is taking a property insurance a pre-requisite for loan disbursal from SBI even for an Under construction flat? I have applied for SBI loan with all documents, but no property insurance. What will happen in this case?
    Also, which is the best choice (cost-wise and considering other paramters) for property insurance: SBI or some other option?

    Loan insurance:
    I understand from your earlier posts that this is not mandatory for SBI home loan. Am I correct in my understanding?
    However, also, considering that I do not have any real dependants on me, is it necessary for me to take a loan insurance or atleast some life insurance (Pls note that I am basically totally uninsured, except for the employer insrance). Pls share your opinion.

    New rule for 1% TDS for House purchase:
    Does the TDS calculation include only Flat price on ST & VAT also?
    Will SBI deduct the TDS at every disbursal OR Should i deduct the Total TDS (on my payment + loan payment from Bank) from my amount only?

    I currently stay in a rented flat in Mumbai. After getting the possession of the flat purchased by me (in the same city, Mumbai), is it possible for me to claim both HRA benefits as well as Loan benefits for taxation purposes?
    Is it necessary for me to have a justifiable reason for me continuing to stay on rent even though I have a owned house here? Is it also necessary that the rented flat should be closer to my office than my owned flat? What (if any) are the criteria?
    Also, assuming my loan payment is done for 6 months for FY 13-14 (Oct 2013 to Mar 2014) and I get the possession in FY 13-14 say on 1st Jan 2014:
    • Can I claim 6 months full interest this year (Oct 2013 to Mar 2014), since during the year the flat was partly under construction.
    • Regarding the Rent income from the flat for 3 months (Jan 2014 – Mar 2014), if I show Deemed rent, will there be any proof required for this? Is there some method to calculate this deemed rent per month?

    Thanks a ton, and appreciate the effort.

    Regards,
    Deepak

  133. Bala V says:

    Hello Ashal,

    Hats off to you for clarifying the doubts of several people in this forum regarding SBI Maxgain account

    I was also “assuming” that if we park some surplus in the Maxgain OD account,
    the principal portion will get increased in the monthly EMI and tenure will automatically come down. But that is wrong as you said.

    As per your explanations, the interest saved is added to the parked surplus in the account every month and interest is again calculated next month on this enhanced surplus. When I checked the Maxgain account as per your explanations I find the that the amounts match. Thanks.

    I was jut trying to understand the Maxgain from another perspective too.. Hope you can help me here

    Let me say I have a SBI Maxgain loan of 30L (final disbursements done and EMIs are being paid already) and the reamining term is 12 years.

    If I have got some money say 5 lakhs now and I do not really need the flexibility to keep that 5 lakhs liquid through the OD account
    Then
    – is it wise to deposit in the OD account and keep saving interest until outstanding principal becomes 5L?
    – or is it wise to make the prepayment of 5 lakhs principal to the maxgain account today itself and reduce the outstanding principal?

    Which will be better or will both be the same exactly – from interest charged point of view?
    Except that the first method will give you additional liquidity for the 5 lakhs?

    Regards
    Bala

  134. Kulkarni P says:

    Wow. I created this thread to get some answers for my SBI Max gain account. Looks like quite a few people benefited by this thread. Total 722 responses 🙂

    All thanks to Ashal sir.

    Padmanabh Kulkarni

  135. Dear Kariyan, Parked money does not earn any interest. The interest part coming from your EMI is saved as per your parked amount & gets added into your existing surplus amount.

    Thanks

    Ashal

  136. Dear Parag, this is the classic mistake for Max Gain, people like you do. In case of Max Gain, the principal is adjusted as per your loan amortization schedule. Any benefit due to parked surplus ‘ll be there in the form of lower interest deduction & accordingly the saved interest ‘ll get added up into your existing available balance (parked surplus).

    Interest is deducted on the last day of the month after calculating each day’s end balance & applicable interest for that day.

    thanks

    Ashal

    1. Kariyan says:

      Just to confirm. Parked money gets interest and made as available balance to withdraw. No effect on Principal part.

  137. Parag Kumar says:

    Hi Ashal,

    Consider that the final disbursement has already happened.
    & i have some accumulated amount in the OD account.

    As a result of it, the principal should keep on reducing somewhat more than it would have originally. My question is that where does the excess principal amount we have repaid show up? Does it show up in the Available balance, Book balance or Drawing Power?

    In my case, the amount of principal repaid (known from Debit Interest)is not matching the amount by which Drawing Power reduces.

    Last month just before the Debit interest happened,

    Book Balance: -31,59,502
    Available Balance: 4,07,863
    Limit: 35,67,365
    Drawing Power: 35,67,365

    After Debit interest of Rs. 26464 happened on 31st (EMI is 42385)

    Book Balance: -31,85,966
    Available Balance: 3,72,579
    Limit: 35,58,545
    Drawing Power: 35,58,545

    I am not getting why the deductions is happening like this.
    Can you please help me analyze this?

    Parag Kumar

  138. Dear Bunty, yes, you w’ds have to sell at guidance value at that time, which ‘ll be higher than your own guidance value as on date. So the Long Term capital gain ‘ll be more to you & thus your tax liability ‘ll be higher.

    Thanks

    Ashal

  139. Bunty Raja says:

    Thanks for replying..You mean i will have to sell on guidance value :(..or buyer should not take the loan from SBI.. 🙂

  140. Dear Bunty, the taxation point ‘ll come into angle when you ‘ll sell it. 🙂

    thanks

    Ashal

  141. Dear Bunty Raja, from taxation point, it’s advisable to register on 41L Rs. in your case, but to opt it or not ‘ll be your personal call.

    thanks

    Ashal

    1. Bunty Raja says:

      I did not understood properly “from taxation point, it’s advisable to register on 41L Rs”..does it mean that all the other banks are doing it wrongly..

  142. Bunty Raja says:

    Property Value : 41 lacs

    Down payment : 4 lacs (for now i can afford this much only )

    I want to avail the benefit of interest rate of 9.95% for loan up to 30 lacks.

    Down Payment for 30l –> 6 lacs (2 l shortage as i have 4 lacs only) which i can pay in between. I went through your answers in the forum and got to know that it can be done i.e.(20:80 ratio).

    but i heard that the reg + stamp they wont charge on guidance value they will charge on purchasing value.

    so it comes around 7% of 41 lacs —> 2.81 lacs

    but for other banks according to guidance value it will come around half of it — > 1.4 lacs

    So here we are loosing 1.4 lacs.

    So you still think that its the right way to go for SBI Maxgain or is there any way that we can avoid this.

  143. Dear Nsabhayankar, the ECs bounce may invite penal interest as well as penalty for each individual bounced ECS. If this hapens too many times (normally 3 times in a year), the same can impact your CIBIL score also. Please make sure that you are able to pay your ECs amount on time.

    thanks

    Ashal

  144. Dear Parag, please check for Moratorium period if any with the loan serving branch. Technology wise, I already answered your basic query. 🙂

    thanks

    Ashal

  145. Parag Kumar says:

    Thanks Ashal. I am not being greedy. But was just trying to take advantage in case its technically possible. Regarding moratorium, my 100% disbursement is already done and i am doing full EMI payment from day 1. I have not paid any pre-emi also.

  146. nsabhyankar@gmail.com says:

    what happens if an ECS bounces for a month?

    I have signed an ECS mandate for the transfer of EMI from my salary account to MaxGain account. I had a few FD’s in my salary account and was under the impression that they were linked to the account and will be broken to honour the ECS. However, that did not happen and the ECS bounced due to low balance.

    However, there was a deposit equal to the EMI amount on the ECS date in my MaxGain account. The description reads ‘CEMTEX deposit’. This amount was later withdrawn.

    Is this an arrangement by SBI in case the ECS bounces? Anyone has had this kind of experience?

  147. Dear PARAG, looking to maximize the profit is a good thing but one should not be greedy to lose qall the HONEY. In case you are going to make SI from OD to SB on the same day i.e. EMI, the EMI ‘ll bounce & rest you know already, I hope.

    The end of the day balance is considered for calculation.

    For not reduction in drawing power, I can not comment with out getting into details. In all probability, there may be a moratorium period on your loan.

    thanks

    Ashal

  148. Parag Kumar says:

    Also i have one more question. When i see my account statement, i notice that
    Drawing power = -Book Balance + Available Balance. But drawing power is not getting reduced every month. Also, according to the interest outgo which is calculated every month end, i calculated principal repaid uptill now. But that figure is not matching disbursed amount – Drawing power. Is something wrong with my principal repayment?

    Thanks,
    Parag

  149. Parag Kumar says:

    Hi all,

    I have two questions related to SBI Maxgain.

    1) My EMI is deducted from my SBI savings account on 15th of evey month. I have a standing instruction set which transfer the EMI amount from OD to savings account one day before the EMI date i.e on 14th. Is it possible to set the standing instruction on 15th itself so that the maxgain benifit can be maximised i.e i can keep the same amount in OD for one more day thus resulting in more gain.

    2) SBI Maxgain is a daily balance reducing type of loan which means our interest outgo will depend on what amount was there in the OD account on each day of the month. I wanted to know at what time of the day is the balance taken into consideration. Is it end of the day or start of the day?

    Thanks,
    Parag

  150. Reji m says:

    Thanks Ashal.

  151. Dear Reji, actually it’s not RBI but the internal circular of SBI. So as per that circular, yes you can not avail Max Gain if you are already holding 2 properties.

    thanks

    Ashal

  152. Dear Subhojit, instead of paying 5L Rs. please contact SBI for base rate linking & rate of interest conversion fee. you ‘ll get the new ROI by paying 0.56% of your outstanding loan amount. Please invest this 5L Rs. elsewhere to earn better return.

    thanks

    Ashal

  153. Reji m says:

    Hi Ashal,

    Are you aware of any restriction on availing Max Gain account? Today I visited SBI to collect the loan application. The officer said, if you own 2 properties, as per RBI order Max Gain facility won’t be available. This is irrespective of whether we have availed MAX gain facility in the past or not.

  154. subhojit ganguly says:

    How to reduce EMI in SBI Easy Home Loans ?
    I have the said loan (teaser rate for first 3 years – 8,9,9) and the third year will be over by mid Sep 13
    I have outstanding loan amount of 19.23 lacs.
    I also have 5 lacs in my savings

    Will I be able to reduce my home loan EMI after prepaying 5 lacs
    What is the process of doing so and what will be my EMI post teaser rate period

  155. Dear Vimal, from the calculation of interest point, this thing is not impacting you. Still if you want to rectify this, please contact your loan serving branch.

    thanks

    Ashal

  156. vimal says:

    Hi,

    I have started paying my regular EMI for my home loan. My EMI debit happens on 5th of every month. But the drawing power is reduced only on 25th of every month. This means my principal repayment happens only on 25th of every month. From 5th to 25th, the principal repayment is shown as available balance. Is this approach advisable?

    Thanks and Regards,
    Vimal

  157. Kariyan says:

    Hi,

    I did not see such problem with RACPC Koramangala.

    As Ashal was mentioning, ask them to show the copy of RBI circular

    -Kariyan

  158. Dear Bin, please demand the copy of the RBI circular from RACPC staff. As far as I know there is no such circular.

    Thanks

    Ashal

  159. Dear Santosh, yes if there is no balance in SB account, the EMI ‘ll be treated as bounce one & continuous bouncing ‘ll impact your CI|BIL record.

    thanks

    Ashal

  160. bin says:

    Hi Kariyan,

    RACPC Basavanagudi Branch, Banagalore. Already contacted bangalore AGM, but no avail. What can I do next? Awaiting your suggestions.

  161. Kariyan says:

    Which RACPC branch is doing like this?

  162. bin says:

    Hi Ashal,

    My RACPC team not agreeing to debit the EMI from my SBI savings account. They are telling that RBI mandates to debit the EMI only from salary account. Is it correct? My salary account is with another bank.
    Also they are giving the ECS dates only on 5th, 15th and 25th. Reason given is RBI mandate. I am not convinced with their explanation. Awaiting your response.

  163. Santosh Mahajan says:

    Hi,

    I have available balance of 63K in my maxgain account and my EMI goes from SBI saving account. Suppose I do not keep any balance in my saving account will that affect my CIBIL score? I mean will that be considered as EMI miss?

    Thanks and best regards,
    Santosh Mahajan.

  164. Sudarshan B says:

    Hi Ashal,

    My loan is fully disbursed and i have submitted my sale deed to racpc but my transaction rights are not yet activated its been a month now. If I ask my branch to give me transaction right they are asking for a full arrangement letter from racpc. Will this letter be sent by racpc people or should I have to go and collect.
    Appreciate your help.

    1. Dear sudarshan, the branch staff is making fool of you. there is no such requirement of full disbursal letter to be issued by RACPC to confirm & then only getting transaction rights. You should ask them in reverse, show me the circular which says that branch staff needs such lstter from RACPC.

      thanks

      Ashal

  165. Dear Hemant, that you w’d have to calculate on your own in a simple exl. sheet. Please prepare your own Masx Gain sheet for the job. Please do not rely upon any online Max Gain sheet as all are flawed for the same reason that reduction in loan term is considered there against your parked amount which is not the case in actual.

    thanks

    Ashal

  166. Hemant says:

    Thanks Ashal – Pls could you give me an example and overall idea how many years (Long Term) of FD return will be more than Max Gain advantage.

    Thanks so much in advance

  167. Dear Hemant, please check why the DP is not reducing? It should reduce. Regarding the max Gain v/s Fd, the Fd ‘ll score over long term due to fwd compounding where as home loan is reverse or negative compounding.

    Thanks

    Ashal

  168. Dear Vimal, please contact bank branch immediately. it seems originally a moratorium period was given which has not been updated in the calculation & thus all the EMIs are getting accumulated as available balance.

    Thanks

    Ashal

    1. Hemant says:

      Dear Ashal Sir –

      Thanks so much for your help and response on this forum; really great. I have two questions.

      1. Even Drawing power remains constant in my SBI Max Gain loan case. I thought it is intentional from bank as I can withdraw this money whenever I need and utilize these funds somewhere else. (Personal loan interest rate is approx 12.5%) so I thought this is as per bank policy and I didn’t highlight this issue with bank.
      Is there any harm if drawing power is not reducing on monthly basis?

      2. SBI Branch manager told me that it is good to park surplus funds in FD rather than in MaxGain. Reason being; interest is calculated on daily reducing principal and effective interest rate is approx 6-7% for home loan while FD provides approx 8.5%. My home loan interest rate is 9.95%. He even showed me some calculations which I didn’t understand much so what should I do. Should I withdraw funds from Max Gain and go for FD/RD?

      Pls advice. Your help is much appreciated

      Regards,
      Hemant

  169. Dear Vimal, what;s the status of your loan? Fully disbursed or part disbbursed. In case of part disbursed loan, the reduction in DP ‘MAY’ not happen & you w’d have to request SBI for the same.

    thanks

    Ashal

    1. vimal says:

      Dear Ashal,

      It is fully disbursed in the month of Jan. Book Balance amount is decreasing whereas the DP remains the same as my total loan amount.

      Thanks and Regards,
      Vimal

  170. Dear Senthil, here are the answers.

    1. Actual amount your property registrar office ‘ll tell.

    2. Yes it’s mandatory.

    3. The property insurance is mandatory, possible prem. for 20Y ‘ll be around 20-25K.

    thanks

    Ashal

    1. vimal says:

      Hi,

      I have a SBI Max gain HL and I have started paying regular EMI for past 6 months. But I dont see my Limit and Drawing Power going down after 6 EMI payment.Based on the discussion in the forum, I understood that it has to go down based on my principal prepayment.

      When I checked with the bank, I was informed to concentrate only on Book Balance alone which will give my loan outstanding. How will I come to know about my Principal repayment? I checked with forum replies but everywhere it is mentioned that the drawing will reduce.

      Please correct me the above statement is true.

  171. Dear Hemank, please contact your loan serving branch to get ‘view only’ netbanking rights.

    thanks

    Ashal

  172. Hemank Chheda says:

    Hi Ashal,

    My First EMI got deducted few days back and its been more than a month since my agreement was done with bank for Home Loan, yet i have not received any Home Loan kit from SBI with my online User ID’s and Password that enables me to see the home loan account online.

    My property is under construction and only partial amount has been disbursed, Is it so that i will receive the user ID to log in, only when my home loan amount is completely disbursed ???

    I understand that the Transaction rights will only be enabled, when my entire amount is disbursed but i am only talking about logging online and viewing my home loan account.

    Thanks,
    Hemank

    1. senthil kumar says:

      Hi guys,

      Few queries I have and I listed them below.

      I have recently taken a loan from SBI and its a max gain. First cheque payment they have released during property registration.

      Now house is registered in my name and SBI has asked me to do the following things for releasing the second cheque to my builder.

      1.create a mortgage (MOD)
      2. one year EC in SBI name

      My questions:

      1. For doing the above mentioned two things one has to spend around 15k. And during the closure of loan, again we need to do the reversal process of the above two?? again 15k we need to spend at the registrar off at the time of loan closure??

      2. Both these are mandatory.?

      3. Is the property insurance which they say will be added to the loan is mandatory? IF yes how much would it be.. approx for a property regtd for 36L

      Thanks,
      Senthil

  173. Dear Hiren, let me try to answer your queries.

    Q1: Should I continue doing this till my book balance become 0 and then write an application to SBI to close the Home loan?
    Parking surplus in Max Gain regularly OK but when the book balance become zero, why do you want to close the loan as the interest outgo ‘ll be zero now?

    Q2: Should I do this more regularly as in every year convert surplus amount into prepayment?
    Please park regularly but do not think of prepaying or closing the loan.

    Q3: Do we earn any interest on surplus amount in maxgain account like we get in Savings account?
    No, you do not earn any interest on your surplus amount in Max Gain account.

    Thanks

    Ashal

  174. Hiren Naik says:

    Hi Ashal,

    I am using SBI Maxgain HL scheme since June 2009, however I have not utilized its benefits to the fullest. I took HL of 20L for 20 years, which was giving me EMI of 18000 per month. I have HSBC salary account which I use to pay my EMI every month. I am not parking all my other funds into my OD account, which I have learned I should do to lower the interest. But what I have been doing so far is apart from EMI every month I was parking 1L of my savings into OD account every 3 months which has brought my book balance near to half, my book balance is now -10,54,981.00/-. I am confident that surplus amount that I am parking in OD account is never going to use for other purpose.

    Q1: Should I continue doing this till my book balance become 0 and then write an application to SBI to close the Home loan?

    Q2: Should I do this more regularly as in every year convert surplus amount into prepayment?

    Q3: Do we earn any interest on surplus amount in maxgain account like we get in Savings account?

    Kindly let me know you thoughts,

    Regards,
    Hiren

  175. kathir123 says:

    Hi Ashal,

    First of all, Thank you very much for doing a fabulous job in this forum.

    I have taken HL insurance cover for Rs.83,000(as a part of my HL) along with my HL of 37 lacs. My doubt is why drawing amount and outstanding amount shows as 0 in the below descriptions. FYI, Full disbursement is not yet done. 33 lacs was disbursed in single shot in April 2013 and I have started paying my Full EMI from May2013.

    Description MAXGAIN SURAKSHA
    Limit 83,000.00
    Drawing Power 0.00
    Outstanding Amount 0.00
    Rate of Interest 10.1
    Currency INR
    C.Y.YTD Interest 0.0
    P.Y.YTD Interest 0.0

    Thanks,
    Deepak

  176. PRADIP says:

    Thanks Ashal for kind reply.

  177. Dear Pradip, Yes. The onus lies on you to make sure that money is available in OD account on the date of cheque presentation.

    Thanks

    Ashal

  178. PRADIP says:

    Dear Ashal,
    can I give post dated checks of OD account for car loan?

  179. Dear Kartik, thanks to you for asking so many queries for the benefit of others. You never know, how you are helping indirectly by asking so many questions which may help others while searching for their own queries.

    Thanks

    Ashal

  180. Dear Kartik, ratio is to be predefined between both of you & it can not change for your life. That’s why it’s an important thing to consider tax benefit.

    thanks

    Ashal

  181. Dear Kartik, if the house in question is co-owned, the interest related benefit ‘ll be available to both owners. So in your case, it ‘ll be 30% tax benefit for your part & 10% tax benefit for your wife. that’s how the combine dtax benefit calculation ‘ll change.

    Thanks

    Ashal

    1. Kartik Sudarshana says:

      Thanks Ashal, I took this point with my SBI representative. I asked them if they will give me a split of how much me and my wife can claim in our respective tax calculations. For this they responded saying SBI will only give two numbers ( Total principle paid and Total interest paid ) for the financial year. They do not care how we split this for our tax calculations.
      I think legally, total amount should remain the same and ratio is left to us. ( At-least as per my knowledge).

      So we can split it (total interest paid) 50-50, 80-20 or even 100-0. So If I claim all the Interest component, I think it will be treated as legal by tax auditors right? Or is there a minimum ratio to be maintained between the co-owners?

    2. Kartik Sudarshana says:

      Thanks Ashal,

      Looks like an agreement has to be made between co-owners for the ownership ratio of the property. This ownership ratio will decide income tax claim ratio as well. As you suggested, this cannot change..

      Even if I do the above in the ratio of say 80-20, there may be some benefits in the first few years but later on once both our salary brackets are at 30%, it won’t be of much help.
      So I am not sure if all this circus is worth the benefit for few years.. I think its probably just simple to put money in Maxgain :)..

      Thanks for all your patient responses..

  182. Dear Kartik, the tax benefit calculation on interest ‘ll change on the basis of ownership.

    Thanks

    Ashal

    1. Kartik Sudarshana says:

      Thanks Ashal. Could you please provide more detail on this.

      1) Do you mean the above calculation is valid for one type of ownership( single or joint) ? Which one?
      2) How would it affect for the other type? Would it still be less beneficial than the above calculation but still better than keeping in MaxGain?

      I have some surplus amount now with me and would like to choose a better option. Kindly help me.

  183. Kartik Sudarshana says:

    Hi Ashal,

    The registration is due in the next 3 weeks. But we have decided to jointly own it. Do you see any adv/disadv in owning it single/joint both in the above case and also in general?

  184. Dear Kartik, the property in question is jointly owned or single under your name?

    Thanks

    Ashal

  185. Kartik Sudarshana says:

    Dear Ashal,

    I am having this weird theory which makes me feel that having an FD/MOD deposit of say 1Lakh is better than parking the money in MGain account . I am sure I have missed out something. But I am not able to find it out. Kindly let me know where I am wrong in the below justification.

    Background:
    My salary is in 30% tax bracket
    My Wife’s salary is in 10% tax bracket.
    Loan taken is Joint Loan form SBI – Maxgain ( 10.1 % interest).
    Property will be rented out and hence no limit on “Interest paid on housing loan” for tax computation. ( I know I have to show rental income as well 🙂 )

    Lets say I have 1Lakh surplus amount. If I put this in my wife’s SBI MOD account which has 9% annual interest ( right now). She will get 9000 at the end of the year. She will declare this as income but since she is in 10% tax bracket, she will lose only 900. Meaning we earn 8100 Rs by end of the year. Now, because I did not park this money in Maxgain, I obviously lost 10.1% interest for this 1L which is 10,100/-. But, I will show this amount in my tax computation for “Interest towards housing loan” wherein I will save 30% tax in my salary meaning effectively I have only paid 10,100 – 3030 = 7070/-.
    So , in effect, I actually earn 8100 and spent 7070 ie. 8100 – 7070 = 1030/-

    Based on above calculation, I am actually saving 1030/- each year for every Lakh I don’t park in Maxgain but open MOD in SBI in my wife’s account.

    I am sure there is something wrong.. Kindly point it out and correct it!!

    1. Hi Kartik,

      Very interesting question which I used to ponder myself aswell. Anywayz I doubt`t whether it works that way. Can wait for other experts to comment on this.

      I think by keeping 1L in your MOD might earn you some money as you have quoted however by having the same money in your MaxGain account would save you a lot on the “total interest” that you need to pay on your home loan. Check that for yourself with any amortization tool.

  186. Dear pan, as the property is already booked by you & part disbursal of loan is also over, the property can be covered by you under an insurance policy. Regarding the policy document, please contact your loan serving branch or RACPC.

    Thanks

    Ashal

  187. pan says:

    Hi,
    I have one query. Recently i saw a debit from my Loan account as follows

    17-Apr-2013 DEBIT PROPERTY INSC BY SBI GEN INSURANCE CO LTD 38,760.00

    So this is for Property Insurance.
    The apartment is still under construction and hence registration in my name is not done yet.

    However, in some previous post, i saw reply that the property insurance is done only after registration when the property is in our name. I asked the SBI contact person of the branch about it, and he said, it happen usually earlier itself, so that any mis happening even during construction can be covered.

    a) Please let me know is it right?
    b) If an insurance(property) is done, will i be receiving any Insurance document ?

    Regards
    Pan

  188. Dear Hemank, there is no exl. sheet prepared by me for Max Gain. The situation is flaoting every month (the amount parked by you) so a fixed sheet is not possible.

    Thanks

    Ashal

  189. Dear Chandan, the interest ‘ll be chaged only on the disbursed amount i.e 3L Rs.

    Thanks

    Ashal

  190. Hemank Chheda says:

    Dear Ashal,

    Hope you are doing fine.

    Could you please send an excel sheet for max gain account in my email address hemank.c@gmail.com ?

    This would be of great help to me.

    Many Thanks in Advance,
    Hemank

  191. chandan blr says:

    I have got the first disbursement 20 days back (3 Lakhs) and have option for full EMI from next month.
    The question I have is , will I be paying interest on 20 lakhs (my total loan amount ) from now itself , or interest is calculated for only the disbursed amount ?

  192. Dear Raghav, you can transfer your salary account from HDFC to SBI. Regarding the personal loan EMi payment, HDFC should not create an issue. Still to be on safer side, please ask @ HDFC for the same thing. I do not think any charges should be there for this ECS mandate from SBI account.

    Thanks

    Ashal

  193. Raghav V says:

    Thanks Ashal for your crisp answers.

    I am also inclined towards opening a sal.account with SBI and link this to MG account.

    But currently I have a personal loan running on my hdfc sal.account for which so far I have paid just one emi last month.Will hdfc accept if I inform them that I am planning to close this sal.account and for this personal loan intrest of 5k each month they shall take ecs from my about to be SBI sal account.

    Will they allow me to do this in first place and will they levy me any charges for this? Kindly help me on this…

  194. Dear Raghav, let me try to answer your queries.

    A. Unless your ROI goes very high, the EMI ‘ll remain same.

    B. Your planning is ok with HDFC salary account. Please do not the only drawback in this case is the interbank transfer charges levied on each part of transaction from HDFC to SBI & reverse. There is more to it, some times, there may be a failure of payment of EMI amount from SBI to HDFC salary account.

    So in my personal opinion, please open a new SB account with SBI & ask RACPC to use this new account as your EMI debiting account.

    thanks

    Ashal

  195. Raghav V says:

    Hi Ashal and Other Experts,

    I have taken a sbi maxgain home loan for 22 lakhs and my current EMI is 21,150 per month for 240 months tenure.

    A couple of clarifications after reading the above threads:

    a) Assuming at any point of time if I withdraw all my Available balance or surplus from my MG account then my EMI will fall back worst case to 21, 150 or is there any scenario where there is a possible chance in my tenure(20 years) for this EMI to exceed 21,150 or I shall strongly believe that at any point of time only 21,150 will be my max emi at any point in time?

    b) Currently I am planning to park all my salary into my maxgain OD account..wanted to know instead of opening a new SBI SB A/C..shall I use my exsisting hdfc sal account and transfer my salary from hdfc to SBI maxgain account directly at the start of the month and then around 9th of every month I shall transfer around 22k back from this SBI OD to HDFC for emi deduction as I have ECS on hdfc sal.Account..is this feasible and let me know the pros and cons of this process without a SBI SB account linked with MG?

    Thanks…

  196. Dear Sunnyvijay, I’m trying to answer your queries.

    1) Can we send/transfer money directly from some other bank to SBI Maxgain OD account ?
    Yes is the answer. You can do so from any of your netbanking enabled account.

    2) If Yes, should we add this OD account details as Savings Account or Current Account ?
    As current Account.

    3) Is it possible to use sbi netbanking and use OD account for any payments over net ?
    Yes, It’s possible to use your existing SBI netbanking to payments over net from Max Gain account.

    4) Any way to see the Interest statement of SBI maxgain homeloan from sbi website ?
    NO. To see the interest you w’d have to manually note down the interest for each month debited or download the full account statement for the petriod you want to calculate your interest.

    Thanks

    Ashal

  197. Hi Ashal,

    1) Can we send/transfer money directly from some other bank to SBI Maxgain OD account ?
    2) If Yes, should we add this OD account details as Savings Account or Current Account ?
    3) Is it possible to use sbi netbanking and use OD account for any payments over net ?
    4) Any way to see the Interest statement of SBI maxgain homeloan from sbi website ?

    Thanks

  198. Dear Sudarshan, the property insurance ‘ll be done once the property is registered under your name. After the mortgage deed is over, SBI ‘ll release the remaining amount.

    Thanks

    Ashal

  199. Sudarshan B says:

    Hi Ashal,

    I am getting my property registered in few weeks from now what are the next steps to get the remaining amount to be released and when should the property insurance be done (before or after registration?). Appreciate your help.

  200. Pingback: SBI Max Gain: Some FAQs | Ideas for Wealth
  201. Dear Manubhai, the branch manager is simply ignorant. From accounting of the maxgain. there is no interest earning to you. There is merely less interest outgo. you are not getting any credit of interest. what is happening here. Please understand it from your same example.

    1.4L Rs. as interest was to be charged if no surplus is there.
    1.2L Rs. are charged as actual interest.
    Now this remaining 20K is not the interest earned. it’s merely the surplus amount parked by you in your Max Gain (the over draft account).

    Just to understand it – forget max gain, & ask the same branch manager, if you are holding a normal OD account against FD in the same bank. what ‘ll be the situation for same thing?
    I ‘ll love to hear his answer. 🙂

    Personally I feel SBI should conduct a refresher course for all it’s staff on Max Gain.

    thanks

    Ashal

  202. Manubhai P. says:

    Dear Forum Experts,

    Especially Ashal and Others who are well aware of ins and outs of MAXGAIN, the situation is as follows:

    If one is parking some surplus amount in MG OD account and thereby gets deemed interest at the same rate as that of Home Loan and so, on one side interest is earned and on the other side same amount of interest earned on PARKED amount is re-deemed back to payout the supposed to incur interest of the otherwise outstanding Loan principal amount, thereby reducing net outgo of that much Interest Amount as per my understanding.

    Say 1.2L annual interest outgo is there for one individual who also has saved 20K interest by parking appropriate amount of surplus and thereby earning 20K deemed interest on the parked amount. Effectively the interest burden which was to be 1.4L has got reduced by 20K and reached actual amount of 1.2L in the give financial year.

    Question:

    while Tax exemption is available for the 1.2L interest actually paid to the bank under loss of income, is the 20K earned deemed interest on surplus OD balance neutralized by the otherwise levible Loan Interest taxable, in par or full? Which would have definitely have happenned if it was from some other instrument. So again, any part or full of this earned/saved interest taxable for that particular year?

    Answer to this is very important to most of the forum visitors as one of the branch managers informally and un confirmedly told that any interest earned/saved through MG OD account balance is to be taxed if it exceeds 10K in a year.

  203. Dear Santosh, glad to know that now you are able to transact in full for your MG account.

    Thanks

    Ashal

  204. Dear Agarg, is you are not withdrawing your 8L Rs., it ‘ll help you to bring down your interest outgo. Please do remember, your as on date drawing power is your actual loan balance & you w’d have to repay it over the period though your regular EMI. By parking 8L Rs. you can not assume that you have repaid your principal amount. it’s floating money & meant for interest saving not for loan repayment. You can withdraw it anytime in case of need.

    thanks

    Ashal

  205. agarg says:

    Dear Ashal, regarding my 8 Jan and 9 Jan 2013 query, if I don’t reduce my loan amount (30 L) and never withdraw 8 L. I can understand that I will not be paying interest on 8L, but will I end up re-paying principal 8L, though I have never withdrawn it

  206. chandan blr says:

    Thank you very much for clarifying.
    Regards

  207. Dear Chandan, you are misunderstanding the whole thing. Regarding your loan, SBI ‘ll disburse the amount in tranches as per the %age completion of your construction.

    The withdraw we are referring here post 100% disbursement is meant for the amount parked by you as surplus in to Max Gain account to save on interest outgo.

    Thanks

    Ashal

  208. chandan blr says:

    Hi All,
    I have applied for SBI Maxgain Home loan ( construction of house)
    I read that we will be able to withdraw money from OD account only when 100% disbursement is done , is this right for my case also ?

    I thought bank will disburse money in stages seeing the progress of construction, with each disbursement – I thought willl withdraw and use the money for construction
    Please give your inputs.

    Regards

  209. Dear Praveen, for short fall of this 2L Rs. amount in loan disbursal, please contact SBI & ask, when & where it ‘ll be released. Regarding welcome kit, NO, you ‘ll not receive any. For the list of documents submitted by you, you can write your RACPC or the loan servicing branch & ask the List of Documents (called LOD in banking language) for your record.

    Thanks

    Ashal

  210. Praveen S says:

    Dear Ashal,

    Thanks for sharing your knowledge and answering the numerous questions.
    My property is valued at Rs1.16 Cr.
    I have 2 questions:

    1. I have taken SBI Max Gain home loan on Rs 80Lakh (for 20 yrs at 10.1% ROI).
    I made a disbursal of Rs 23.12 lakh as down payment before applying for loan.
    My margin percentage as mentioned in arrangement letter is 32%.
    Below is schedule of payment (CLP):

    1st Installment: 23.12 Lakh (I paid full amount) – completed
    2nd installment: 67.88 Lakh (SBI paid: 61.84 and I pay: 6.05) – completed
    3rd Installment: 16.97 Lakh (SBI should pay 11.54 and I should pay 5.43)
    4th Installment: 8.01 Lakh (SBI should pay 5.44 and I should pay 2.56)

    Above calculation is according to 68% share of Bank and 32% my share in disbursement.
    Going by this, I see that loan will be not be completely utilized
    Bank will pay 78.82 Lakh out of 80Lakh.
    Would this be a problem if I do not utilize complete sanctioned loan amount?

    2. While taking loan, Bank takes the original documents like Sale Agreement and Construction Agreement, original receipts of money I paid to builder
    Would Bank send me a document or welcome kit (to my registered address)
    stating list of documents they have taken into their custody?
    What all welcome kit contains?

    Thanks
    Praveen

  211. Dear Santosh, the car loan OD facility is called SBI CAr Advantage loan. To be able to transfer back the 500 Rs. test amount, please contact the loan disbursal branch to activate your transactions rights.

    No transaction rights are not activated automatically.

    Thanks

    Ashal

    1. Santosh Mahajan says:

      Thanks Ashal!
      My transaction rights are enabled now and I could transfer back to my saving account from OD.

  212. Santosh Mahajan says:

    Hi,

    I would like to thank this forum for answering a lot of my queries.

    Just wanted to share that overdraft facility is available with SBI for car loan as well. I took it last week.

    My saving account is with different branch than my car loan account branch but mapped to same online account.

    I transferred 500 in my OD account. But I am unable to transfer it back to my saving account. Disbursement is done in full.

    doesn’t SBI gives facility to transfer from OD to saving online by default?

    Thanks and best regards,
    Santosh.

  213. Dear Parag, yes the saving ‘ll be 1.25L Rs. Please go ahead for rate conversion.

    Thanks

    Ashal

  214. Parag Kumar says:

    Hi Ashal,

    My current outstanding loan amount is 35.5 lakhs(Original loan amount – 37.17 lakhs) & loan duration remaining is 14 years(Original duration 15 years).

    My current ROI is 10.45%

    To convert this to current interest rate 10.1%, as you said i will have to pay 0.56% i.e approx. 20k to SBI.

    According to my calculation, i save about 1.25 lakhs on interest if i get this loan rate converted.

    Is my calculation correct? If no, can you correct me.
    Also do you think that getting the loan rate will be profitable considering my loan amount is very high.

    Thanks in advance.
    Parag Kumar

  215. Dear Mohit, please contact RACPC to get the copy of your loan agreement. it’s the duty of the staf of RACPC to provide a copy to you.

    Thanks

    Ashal

  216. Mohit Katiyar says:

    Thanks for your responses.
    As for your of paying to builder is, I will pay from my own saving which I have collected over last one year.
    I have actually never looked at the loan agreement document. Me and my wife signed it at RACPC office but never received the copy. How can I get it now?

    Thanks
    Mohit

  217. Dear Mohit, I’m trying to answer your queries.

    1. For SBI Max gain I heard the pre-emi period is 1 and half year or last disbursement which ever is earlier? If yes then my next question is irrelevant.
    What you are calling as Pre-EMI period, it’s called Moratorium & depending upon the individual loan disbursal, it may be anywhere from 6 months to 24 months. To know your own, please check your loan agreement.

    2. I have opted for full 80% of the limit loan and 1 year of pre-emi is completed. Now my last disbursement is not being asked by the builder so can I approach the bank and reduce the loan and still have the max gain facility?
    How’ll you pay to your builder from your own pocket as & when your builder demands it?

    3. My RACPC is office is in my home town. What all formalities have to be completed when actual EMI starts after pre-emi? Will I need to travel to my home town?
    Please read your loan agreement for completion of Pre EMI, as & when it happens, the EMI ‘ll start automatically from the SB account under your ECS/SI mandate, given at the time of loan agreement was done by you with bank.

    4. Will I be able to withdraw any extra money(besides pre-emi) parked in MG account while pre-emi period after the actual EMI get started?
    To withdraw your own money from MG, make sure full disbursal has been done & you do have transaction rights for your MG account through netbanking of SBI.

    5. I got the loan issued at 10.5% fully floating, now the new loan issue rate is much lower. Is there any way I could ask bank to convert it to lower rate by making any one time fee payment?
    Yes, one time Rate reduction is possible by paying a conversion fee of 0.56% of your outstanding loan amount. For this please contact your loan serving branch.

    Thanks

    Ashal

  218. Mohit Katiyar says:

    Hi Ashal,

    Your knowledge on the SBI max gain is commendable. I have also taken a SBI max gain loan and I need help on certain things
    1. For SBI Max gain I heard the pre-emi period is 1 and half year or last disbursement which ever is earlier? If yes then my next question is irrelevant.
    2. I have opted for full 80% of the limit loan and 1 year of pre-emi is completed. Now my last disbursement is not being asked by the builder so can I approach the bank and reduce the loan and still have the max gain facility?
    3. My RACPC is office is in my home town. What all formalities have to be completed when actual EMI starts after pre-emi? Will I need to travel to my home town?
    4. Will I be able to withdraw any extra money(besides pre-emi) parked in MG account while pre-emi period after the actual EMI get started?
    5. I got the loan issued at 10.5% fully floating, now the new loan issue rate is much lower. Is there any way I could ask bank to convert it to lower rate by making any one time fee payment?

    Thanks in advance

  219. Dear Hemank, if by linking you mean assignment, I already answered that this can be done by SBI Life on your written request. Please do understand, policy is linked or not, in case of claim, SBI bank staff is not going to help in any manner to your family. Your family w’d have to run for claim on it’s own. As simple as that.

    thanks

    Ashal

  220. Hemank Chheda says:

    Hi Ashal,

    Suppose if i opt for SBI E-sheild policy, will it be linked to my home loan account ?

    Thanks,
    Hemank

  221. Dear Hemank, your answer is totally wrong. For each policy, be it rinraksha, smart shield or e-shield, the claim is to be filed by the family members & interestingly there is no guarantee that claim ‘ll be passed in any of these policies. So claim failure risk is same in all the 3 types of policies.

    Now do tell me, which policy is the most beneficial to you.

    From the forum itself, I do have a case history with me, where a policy was never issued to the borrower & due to unfortunately death of the borrower, when the family tried to file for claim, it came to notice that policy was never issued. Now the family is running from here & there as well filed a court case for the pain faced by them for failure of bank staff.

    Thanks

    Ashal

  222. Hemank Chheda says:

    Hi Ashal,

    Got your question Ashal. Its the bank who is going to file for the claim. But can smart shield or e-shield policies be linked to the home loan account ?

  223. Dear Hemank, do you mean to say, if your death happens under Rinraksha policy, the claim ‘ll be passed within few hrs? if my understanding is correct, let me ask a question to you.

    In case of rinraksha or smart shield or e-shield, who ‘ll file claim for each policy?

    Before answering, please understand properly, what I’m asking for?

    thanks

    Ashal

  224. Hemank Chheda says:

    Hi Ashal,

    Thanks for your reply. But the only thing that worries me is the claim settlement in case of unfortunate event in esheild policy. I believe, Rinnraksha is free of these terms and conditions and the claim would be settled immediately. However, eshield being an pure online term cover worries me about claim settlement. What do you think about this ?

    Thanks,
    Hemank

  225. Dear Hemank, at the time of answering those queries, the E-Shield was not available. Yes now one should opt E-Shield over smart shield. Regarding linking, I assume you are referring to assign these policies with your home loan, yes it can be done by requesting the same to SBI Life, the insurer, not by the bank.

    Thanks

    Ashal

  226. Hemank Chheda says:

    Hi Ashal,

    Regarding life insurance, SBI is offering their life insurance product Rinnraksha with Home loan. As mentioned by you in the above posts, SBI Smart sheild is the one you recommnended. However there is also SBI eshield policy offered by SBI. Which would be the best policy to opt for. Also, will they link these policies to the home loan account ?

    Thanks,
    Hemank

  227. Dear Kiran, the situation you are referring to is applicable in normal home loan where your partpayment money is adjusted immediately & permanently towards the loan & thus the interest outgo in your loan get reduced & principal component increases.

    In case of MG, the parked surplus is treated as payment for calculation of interest & no actual prepayment is happening, hence the differential interest part of your EMI in MG ‘ll be available as surplus.

    Thanks

    Ashal

  228. Dear Manubhai, remember RTI is key in your case.

    thanks

    Ashal

  229. Dear Manubhai p, Please file an RTI application & demand the photocopy of the application form where you celarly marked the thing ‘Max Gain’ as your choice of home loan. Once the photo copy of your application is with you, please contact your branch manager as the first step in the ladder to resolve the issue. if you get success, OK. if no success, no problem, contact the AGM in your local RACPC & when you ‘ll be able to prove that it was fault of SBI & not yours; the loan account ‘ll be converted to Max Gain for sure. Your case is not the ordinary conversion where you are already having routine Term loan & wants to swtich over to Max Gain. in your case, you demanded max Gain but given term loan & why you should suffer for the fault of SBI?

    It’s not going to happen immediately & it may take some 10-15 days or even more & your some trips to serving branch as well as RACPC but be assured, the hard work ‘ll be fruitful to you.

    My advance wishes to you.

    thanks

    Ashal

  230. Manubhai P. says:

    Dear Forum Experts, Specially Ashal Juahari,

    My question is regarding MAXGAIN pertaining to SBI Home Loans.

    NOTE: I have repeatedly gone through most of the threads on this as well as other web-pages to make sure I take least time and call in minimum efforts from the helpers here.

    Background:
    Me being fan of this concept, had applied for MAXGAIN type home loan in prescribed form to SBI RACPC clearly ticking MAXGAIN option in the Detail-C page top. From beginning till end got all formalities completed and now I have even submitted the possession letter etc , after mortgaging the home to SBI after executing Sales Deed From the Developer. I was able to see the Loan Account of Home Loan as well as Personal Insurance Loan linked to same CIF of Internet Banking Login wherein I earlier used to see my savings account only. However, The Loan accounts were appearing in the VIEW ONLY (not Transaction enabled) category of the internet banking page. I thought that I should apply and get transaction rights for this loan account and so approached SBI, wherein I was informed that this Loan account is not of MAXGAIN type/category and so I cant have transactions nor can I have Chequebook/ATM Card etc even if I have completed all the formalities including Full and Final Disbursement, Salesdeed Submission, Mortgaging, Possession Letter Submission, etc, completely. So I have understood that while opening new loan account by the concerned in the SBI, My request for MAXGAIN type account was apparently missed and so ordinary home loan account was opened which is described as SBI SURAKSHIT HOME LOAN in my Net-banking webpage. I have also consulted a friend of mine who uses this type of OD loan account under MAXGAIN, made him see my netbanking webpage and he confirmed that mine is not a MAXGAIN OD Transactions account for sure.

    As mentioned by Mr. Pawan somewhere above, when he approached his RACPC for such a conversion, they denied, however it is said earlier here that such conversion is possible, only once, and cant be reversed later. Request some more light on this matter.

    Question:
    (1) Is it possible to convert the same account now tagged as SURAKSHIT HOME LOAN into MAXGAIN type?
    (2) Whats the easiest way out to get me a MAXGAIN account without much hassle/financial implication?
    (3) If at all some authority(AGM / GM etc) exists in SBI who might have capacity/authority to close my this account and open a new account of maxgain type without any financial implication on either side, details of such office/authority.
    (4) If its only a complaint and redressal way open to me, whom and how should I approach?
    (5) Request to tell details so that I can visit my RACPC with proper preparedness and make my work happen, for sure I am not expecting a smooth sailing in this situation, and most likely people there will not entertain me at the first place so easily, nor might they co-operate, I doubt they Might even tamper with my form to dilute the matter, so need a better detailed help.

    Counting on you Dear ASHAL and others. I have read the posts and am very hopeful of getting guidance.

  231. Dear ramesh Babu, I’m trying to answer your queries.

    *If we park addtional/extra money parked in Mas gain account, EMI will be same and of course Loan tenure will get reduced… Am I right?
    No, the parking of surplus amount ‘ll only reduce the interest outgo. Loan term ‘ll remain same.

    *Every year I will start RD for 12 months to pay school fees for my daughter for the next academic year. . Is it worth to park that RD amount ( roughly 4500per month) every month in Maxgain acoount and to withdraw in 12th month ( fees required)… Is it advisable to do such transaction max gain .. Is there any limit to park/withdraw no. of transaction in max gain account? generally banks are giving 8-9% RD interest and do I save that equal amount in my load account interest also.
    Yes, it’s a good idea. The saving in home loan interest outgo ‘ll be higher than post tax interest earning in RD.

    *In your previous answer , I found that you are recommending SBI life credit card … I don’t have credit card as of now and let me know any specific reason for credit card. I feel there will be annual charges for credit card. Am I right?
    I’m asking to direct credit card payment from Max Gain for the people who are having existing CCs from other banks. For people who do not have any CC, having one from SBI is a good idea.

    *Can we book the tickets or for shopping from Max gain account thru internet banking . Is it possible.
    Yes, you can do all online shopping stuff.

    *Can you please share a SBI max gain calculator if any.
    No, I do not have any. Please prepare your own.

    Thanks

    Ashal

    1. Kiran R says:

      HI ASHUL,
      when we park surplus amount it‘ll only reduce the interest outgo. Loan term ‘ll remain same. then my understanding is if we pay more principle and less interest the loan tenure should automatically come down right ? because the emi amount is a fixed one and the principle paid more whenever there is excess amount parked over MG. ?
      kindly educate on this..

  232. ramesh babu says:

    Hi Ashal
    Thanks for detailed answer about SBI max gain questions…

    I had a few questions

    *If we park addtional/extra money parked in Mas gain account, EMI will be same and of course Loan tenure will get reduced… Am I right?

    *Every year I will start RD for 12 months to pay school fees for my daughter for the next academic year. . Is it worth to park that RD amount ( roughly 4500per month) every month in Maxgain acoount and to withdraw in 12th month ( fees required)… Is it advisable to do such transaction max gain .. Is there any limit to park/withdraw no. of transaction in max gain account? generally banks are giving 8-9% RD interest and do I save that equal amount in my load account interest also.

    *In your previous answer , I found that you are recommending SBI life credit card … I don’t have credit card as of now and let me know any specific reason for credit card. I feel there will be annual charges for credit card. Am I right?

    *Can we book the tickets or for shopping from Max gain account thru internet banking . Is it possible.

    *Can you please share a SBI max gain calculator if any.

    Thanks in advance.
    -babu

  233. Dear Kiran R, I’m trying to answer your queries.

    1. Yes you can now park your surplus amount into your MG acct. But make sure you do have netbanking rights active in your MG acct. if not done already, please aply for activation of netbanking rights for your MG acct.

    2. Please read reply 1 above, it may be the reason.

    Regarding your Accounts –

    Yes you may start transferring funds from other sources into this OD account.

    The acct. no. 3 is your active insurance prem. money acct. where as the acct. 4 is a wrong one opened by mistake.

    Thanks

    Ashal

  234. Dear Madhan, yes you ‘ll get the benefit of reduced ROI in the month of March’s calculation.

    Thanks

    Ashal

    1. Kiran R says:

      Dear Ashul,
      I am very new this forum… i am from Bangalore. i have taken SBI MG HL in Bangalore – koramangala branch.
      my prop reg was done during march 2013 and the loan was taken during nov 2011 since then i have been paying the full emi.
      1) now my question is can i start using my OD account for parking the surplus amount?
      2) i trying submitting for the cheque book request online for my OD, but i see only option for my SB.

      also need help onother below quires
      i have total 4 accounts listed under my login.

      Transaction Accounts :
      1- Saving account – my area branch – ROI – 4%
      2- OD Account – with PBB Koramangala branch – ROI 10.2 %
      Should is start transferring fund from other sources to OD account ?

      Loan Accounts:
      3- Loan Account (Max Gain Suraksha) with PBB Koramangala – this looks to be the specific for the HL insurance account
      ROI 10.2 % –
      In this apart from the anual insurance prem for first 4 years roughly 8000 there is also interest Debit every month with marration ” Part Period Int” is that usual or some thing wrong going with my account ?

      4- Loan account 2 (Max Gain Suraksha) with RACPC Bnagalore – this also looks to be the specific for the HL insurance account but there is no transaction since beginning it shows – 0
      ROI 10.7 % (IS THIS THE DUPLICATE ACCOUNT THAT IS LYING DUMMY) ?

  235. Madhan says:

    Thanks Ashal. You are doing a great job. Your calculation matches exactly with my account statement. Prior to Feb13 SBI were charging 10.25% and for Feb interest is calculated at 10.2%. I have paid 0.56% of Drawing power and changed my ROI to 9.95%. Hoping to get it reflected in this month end.

  236. Dear Madhan, please check your bank account or contact SBI for clarification. My calculation indicates that your ROI was 10.25% for the month of jan 2013 not 10.2%. this 10.2% ROI was implemented from Feb 2013 after the reduction in repo rate by RBI in the month of Jan 2013.

    The formula adopted by you is ok just a small correction, for 7th date EMI credit, the interest ‘ll be charged foer 6 days only. From there the interest ‘ll be charged on the remaining 25 days. Calculate this way for 10.25% ROI & update me with your findings.

    Regarding parking your FDs, yes if you are earning merely 8-9% in FDs & that too taxable & paying 10.2% in home loan, parking money into Max Gain ‘ll be a good idea Sir ji. 🙂 🙂

    thanks

    Ashal

  237. Madhan says:

    Dear Ashal,

    Transaction Date/description given above may appear little awkward. Let me put it here.

    Outstanding Balance as on 31st December Rs. 2798102
    7th Jan EMI of Rs.28954 credited to OD account.
    31st Jan Interest Debited in my OD account.

    regards
    Madhan

  238. Madhan says:

    Dear Ashal, Thanks much for your response. I am getting more and more clear on SBI Maxgain. Pls. help me understand the below transactions.
    ROI during this period: 10.20%

    Transaction Date Description Debit Credit Balance

    31-Dec-12 DEBIT INTEREST– 24,189.00 -2798102
    7-Jan-13 BULK POSTING-ECS 28,954.00 -2769148
    31-Jan-13 DEBIT INTEREST– 24,156.00 -2793304

    Jan 1 to Jan7 -> Interest for 7days is (2798102 * 10.20 * 7) / (100*365) = Rs.5473.54
    Jan 7 -> EMI credited to OD account. Balance adjusted to Rs.2769148.
    Jan 8 to Jan31 -> Interest for 24 days is (2769148 * 10.20 * 24) / (100*365) = Rs. 18572.25

    Total Interest = 18572.25 + 5473.54 = Rs. 24045.79
    But my OD account statement shows DEBIT interest on 31st Jan as 24156. There is difference of Rs.111 charged extra. Note, I am seeing such difference in amount for every month.
    Having those discrepancies I am much worried whether it is good to move some of my Fixed Deposit to OD account.

    Ashal, Pls. advice why the calculated interest varies. Am i calculating interest properly or i should approach SBI? Thanks.

  239. Dear Madhan, the bank is right in calculating your EMI on the original Loan amount. this is goint to help you to save more on interest outgo. Instead of having EMI for 28.36L Rs., it’s calculating for 29L Rs. & thus you are paying a slightly higher EMI. the higher EMI means the principal part of your EMI ‘ll be more. So loan ‘ll be repaid early & thus you ‘ll be able to save a bit of interest outgo here.

    thanks

    Ashal

  240. Madhan says:

    Thanks Ashal. Here we go on the EMI calculation.

    Total Loan Amount availed: 2900000
    Current Drawing power: 2836006
    Loan tenure remaining: 228 months
    ROI: 9.95%

    If EMI is calculated based on the Total Loan amount availed(i.e 2900000), it gives the Rs. 28362 which is more close to what bank officials said i.e Rs.28360.
    But as suggested above if the EMI is calculated based on Current Drawing Power(i.e 2836006), it gives me Rs. 27736.76

    Pls. let me know whether Total Loan amount availed or Current Drawing Power/Limit is used for calculating EMI and suggest whether i can approach bank for enquiring about this?
    Thanks.

  241. Dear Madhan, let me try to answer your queries.

    1. yes your understanding is correct.

    2. You are wriongly calculating EMIs on book balance. Please calculate your EMi on drawing power & you ‘l get the correct result. Drawing power or drwing limit is your actual outstanding loan amount where as bok balance is your as on date calculated loan balance after taking effect the parked surplus amount.

    thanks

    Ashal

  242. Madhan says:

    Dear Ashal,
    Total Loan amount – 29Lacs
    Loan Tenure: 240 Months
    ROI: 10.5%
    Calculated EMI: Rs.28954
    1st Disbursement – 12Lacs on 6th Jan 2012
    2nd Disbursement – Rs. 1389920 on 15th May2012
    Final Disbursement – Rs. 310080 on 18th Aug2012

    I started paying EMI from my 1st disbursement. The interest debited on end of Jan, Feb, Mar, Apr are Rs.7249, Rs,9880, Rs.10379, Rs.9911. The corresponding Principal amount are Rs.21705, Rs.19074, Rs.18575, Rs.19043 respectively.

    1) From the above threads i understood that the Principal paid contains the actual principal + Non-principal since i started paying full EMI from 1st disbursal itself and the non-principal amount should get reflected in ‘Available Balance’. Pls. let me know if my understanding is correct.

    2) I have changed the ROI from 10.2% to 9.95 last week. Pls. find the below loan account details as of today. The bank officials said the revised EMI is Rs.28360. But if i calculate using Current Book Balance, ROI, and remaining months (227), the EMI turns out to be ~Rs.27050. Pls. let me know how the EMI is calculated and why it is different from one i calculated?
    Book Balance -27,57,078.00
    Available Balance 78,928.00
    Limit 28,36,006.00
    Uncleared balance 0.00
    Drawing Power 28,36,006.00
    Currency INR
    Rate of Interest (% p.a.) 9.95%
    Lien Amount 0.00

    Thanks in Advance.

  243. Dear Vishnu, your understanding is correct. The interest ‘ll be charged only on the disbursed amount till date. So July -13 it ‘ll be 5L Rs. only on which you w’d pay interest for July & August months. In Sept -13 after next disbursal, you ‘ll pay interest on 10L Rs. till next disbursal.

    Thanks

    Ashal

  244. Vishnu Gupta says:

    Hi Ashal,

    Recently I booked under construction flat, which is having possession in Dec-14. I need to pay 20% in May-13 and remaining amount will be paid in 8 part (10% each) after completion of each slab (say first in July, next after 2 month and so on).

    20% I am paying by my own for remaining amount I’ll go for SBI maxgain home loan.

    Here my question is, if I go for loan of 40L, what would be the outstanding amount on me from today.
    Will it be 40L from today itself?
    or will it be as per the payment terms with builder?
    ex. today – 0
    July – 5L (1st slab)
    Sep – 10L (2nd slab)
    Nov – 15L (3rd slab)
    ………
    Sep-14 – 40L (8th or final slab).

    Your help would be appreciated.

    Thanks,
    Vishnu

  245. Dear Hemank, to prepay permanent you should contact SBI. But why do you want to prepay & lose the liquidity of your amount which is the main benefit of Max Gain?

    Thanks

    Ashal

  246. Hemank Chheda says:

    Hi Ashal,

    Just a small question about Home Saver Loan.

    Ex: Suppose i have taken an loan of 35 lacs, my monthly emi stands out to be approx 35,000 rs. I have been depositing 20,000 additional amount in my OD account per month. After 10 months, suppose i have collected 2 lacrupess by depositing 20,000 extra per month. Now i want to permanently pre pay this amount and want my loan o/s less by 2 lacs.

    I understand that 2 lacs that i have in my OD account is towards pre payment but that can also be withdrawn. How about permanent Pre pay of 2 lac, so that i cannot withdraw and the principal is actually reduced by 2 lacs.

    Regards,
    Hemank

  247. Dear Kamlesh, if the policy is not isssued, you may ask for change to the desired one. but in my personal opinion, the level term cover is better than decreasing cover.

    Thanks

    Ashal

  248. kamlesh patel says:

    Hi Ashal,

    My loan get senctioned & did all signatures with sbi. As I given request for smart shield – Decreasing Loan Assurance. But from sbi person given me sanctioned on Smart shield – Level term Assurance. The premium is higher then what i wanted to have.

    Can I change the policy type latter on?
    Thanks in advance..

  249. Dear Manoj, please check the below link –

    http://rbi.org.in/scripts/NotificationUser.aspx?Id=7258&Mode=0

    Show it to your Branch staff of IDBI & ask them in written that they ‘ll overrule the RBI guidelines & still impose preclosure charges on you.

    Regarding the saving, there is an immediate saving in terms of interest rate difference. Apart from the difference, there is another saving if you can manage to park your surplus funds into your MG account. So Transfer make sense.

    Thanks

    Ashal

  250. Dear Manoj, you may switch to SBI if you feel Max Gain ‘ll be helpful to you. Regarding the closure charges, no IDBI can not impose such penalties after the implementation of RBI guidelines for scrapping such penalties altogether.

    I’m not sure that you are aware or not but similar product is available in IDBI also with the name Interest saver. Yes the interest in this option is higher by 0.5% over regular interest rate.

    Thanks

    Ashal

    1. Jha says:

      Dear Ashal Ji, Thanks for your reply.

      1. I am basically want to know, whether I can save substantial amount by transferrting loan from IDBI (10.5%) (Outstanding is 15.0 Lakhs) to SBI (@ 9.9%). Is it advisable to pay closing charges (in any) and get the account transferred to SBI.

      2. When I recently contacted IDBI, they informed I ned to pay about 30 K for pre-closure of loan by transferring to any other bank.

      Thanks, Jha

  251. Dear Hemank, Apart from SBI, IDBI, CITI, Standard & Chartered & HSBC are offering similar product in India as on date. Please take your pick from the above list.

    Thanks

    Ashal

  252. Manoj Jha says:

    Dear Friends, I have a loan account with IDBI, who are charging me @ 10.5%. Current outstanding is 15.0 Lakhs. SBI is offerting at loan @ 9.9%.

    Is it advisable to pay IDBI closing charges (Rs 30,000/-) and get the accoung transferred to SBI.

    Pl. Note: I have some spare funds and can be used for MaxGain accounting purpose also.

    Thanks, Jha

  253. Hemank Chheda says:

    Dear Ashal,

    First of all, let me thank you on behalf of everyone for the tremendous service you are offering. Your patience is highly Appreciated.

    I just want to ask a simple question, As said by you, SBI Maxgain Home Loan Acc provides an OD account, where in you can park ur surplus funds towards pre payment and you can thus save your interest on the loan. Also when ever needed you can withdraw surplus funds which are parked for pre payment, thus interest will be calculated on daily basis.

    Is the same feature also available with some other banks offering home loan apart from SBI ?

    Regards,
    Hemank

  254. Dear Girish, Out of 45L Rs. sanctioned loan amount, the interest ‘ll be charged only on the disbursed amount i.e. 30L Rs. Now if you are paying full EMI from day one, the surplus amount which is meant for principal settelment ‘ll be added into you available balance over the regular amortization amount. What does this meanto you in simple language?

    For example out of your EMi of 42K Rs. if 3000 Rs. is meant for Principal repayment & remaining 39K for interest (considering full loan disbursment on day one), the interest is charged let’s say 30000 Rs. So 30K towards Interest, 3k towards, principal repayment & remaining 9K towards available balance.

    As & when builder ‘ll demand more money, SBI ‘ll release upto 45L Rs. whatever excess amount you are holding there, is for your benefit as you ‘ll be saving on Interest.

    SBI has nothing to do with your own surplus amount to consider in disbursal.

    In case you do not opt for last 4-5L Rs. disbursal, the amount ‘ll remain as surplus & you w’d have to inform the SBI, to reduce your loan amount from original 45L to 40-41L Rs. if you want it that way. else such 4-5L Rs. ‘ll remain as surplus at your disposal all the time, which you can use as per your need if the demand is there in future.

    thanks

    Ashal

  255. gitaish gulati says:

    To Add to my last question:-

    What i meant was by the by the first demand letter bank would have disbursed 30L. Now my Full EMI is 42K based on 45 l loans for 20 years. Now since the disbursement is of 30 lacs, interest will be calculated only on 30 lac? Correct me if i am wrong. If that is the case a higher component will go to Principal payment, because of which i will have a reduced principal although the full disbursement is due to happen, so how does this work out. is it we will eventually end paying more since we are repaying faster and loan disbursement has not hapenned fully. if that is the case people will never go for Full EMI?

  256. gitaish gulati says:

    Hi Ashal, Its amazing to see your patience to provide detailed answers:- I have a question around max gain though.

    My Property is costing around 61 lakh. I have applied for a sanctioned limit of 40 lac and rest i am planning to make my own arrangement, however at this point of time i can manage only 16 lac out of 21 lac(61-40). Now If a take a sanctioned limit of 45 lacs and start full emi now(which i am planning to), What if i dont avail the whole 45 lacs since i might able to manage the remaining by 4,6 months as i have time and Since my Possession is end of 2014.?

    Another question:- Even though the loan sanctioned limit is 45 lacs and disbursement amount is 30 lacs, the interest will be calculated on the disbursement amount right? if yes, then even when i pay full EMI, the principal amount will reduce faster right.

    Another question:-

    If I start paying the full EMI then my principal will keep on decreasing since the disbursed amount will be less, So by this Bank will never able to reach the total amount.

  257. Dear Parag, can you mail me your own calculations as well as bank statement?

    Thanks

    Ashal

  258. Parag Kumar says:

    Hi,

    I had one doubt.

    I have been using maxgain account since past 8 months now.

    I maintain a record of the transactions i do to maxgain account (credit/debit).

    But it never matches the available balance.

    The available balance is always greater than the amount i have deposited in maxgain.

    Also i have taken 100% disbursement.

    I am not able to understand why these figures dont reflect the actual nos.?

    I think this is the case with many people.

    Thanks,
    Parag

  259. Dear Bharat, please contact dear Manish to get my mail id.

    manish@jagoinvestor.com

    Thanks

    Ashal

  260. Bharat A says:

    Dear Ashal,

    I recently got loan approved from SBI. I have requested for MG loan in my form. I received the arrangement letter but no where it is mentioned that the sanctioned loan is MG. Instead it is only mentioned as HL for NRI/PIO’s. I have asked the document processing incharge several times about it and she was sure it is MG loan. Is their a way I can verify what type of loan was I sanctioned?

    I could send you the scanned copy of the letter from SBI but I am not sure how to find your email from profile.

    Thanks
    Bharat A

  261. Bharat A says:

    Dear Ashal,

    I recently got loan approved from SBI. I requested for Maxgain loan. SBI has given me Arrangement Letter but no where it is mentioned whether it is MG loan. It is only mentioned HL for NRI/PIO’s. I have asked the lady at RAPC more than ten time is it MG loan she said yes and also told her there is no mention of MG in the arrangement letter.

    Since you mentioned you have also MG loan is it mentioned in the approval letter from SBI that the particular loan is MG loan. I am about to mortage the house next week to SBI i.e, will ask builder to give sale deed and EC to SBI for further processing.

    Please confirm if possible.

    Thanks
    Bharat A

  262. Dear Pawan, please do not deposit any amount as on date as your loan is not MG so any amount deposited by you ‘ll not be the same like MG. You may lose the liquidity for ever for this parked amount.

    Please wait for Equitable Mortgage to complete & then apply in written that you want your Term Loan to be converted into MG.

    Thanks

    Ashal

    1. Manubhai P. says:

      Dear Forum Experts, Specially Ashal Juahari,

      My question is regarding MAXGAIN pertaining to SBI Home Loans.

      NOTE: I have repeatedly gone through most of the threads on this as well as other web-pages to make sure I take least time and call in minimum efforts from the helpers here.

      Background:
      Me being fan of this concept, had applied for MAXGAIN type home loan in prescribed form to SBI RACPC clearly ticking MAXGAIN option in the Detail-C page top. From beginning till end got all formalities completed and now I have even submitted the possession letter etc , after mortgaging the home to SBI after executing Sales Deed From the Developer. I was able to see the Loan Account of Home Loan as well as Personal Insurance Loan linked to same CIF of Internet Banking Login wherein I earlier used to see my savings account only. However, The Loan accounts were appearing in the VIEW ONLY (not Transaction enabled) category of the internet banking page. I thought that I should apply and get transaction rights for this loan account and so approached SBI, wherein I was informed that this Loan account is not of MAXGAIN type/category and so I cant have transactions nor can I have Chequebook/ATM Card etc even if I have completed all the formalities including Full and Final Disbursement, Salesdeed Submission, Mortgaging, Possession Letter Submission, etc, completely. So I have understood that while opening new loan account by the concerned in the SBI, My request for MAXGAIN type account was apparently missed and so ordinary home loan account was opened which is described as SBI SURAKSHIT HOME LOAN in my Net-banking webpage. I have also consulted a friend of mine who uses this type of OD loan account under MAXGAIN, made him see my netbanking webpage and he confirmed that mine is not a MAXGAIN OD Transactions account for sure.

      Question:
      (1) Is it possible to convert the same account now tagged as SURAKSHIT HOME LOAN into MAXGAIN type?
      (2) Whats the easiest way out to get me a MAXGAIN account without much hassle/financial implication?
      (3) If at all some authority(AGM / GM etc) exists in SBI who might have capacity/authority to close my this account and open a new account of maxgain type without any financial implication on either side, details of such office/authority.
      (4) If its only a complaint and redressal way open to me, whom and how should I approach?
      (5) Request to tell details so that I can visit my RACPC with proper preparedness and make my work happen, for sure I am not expecting a smooth sailing in this situation, and most likely people there will not entertain me at the first place so easily, nor might the co-operate, I doubt they Might even tamper with my form to dilute the matter, so need a better detailed help.

      Counting on you Dear ASHAL and others. I have read the posts and am very hopeful of getting guidance.

  263. Dear Prateek, yesw once the possession is there with you, you can withdraw your own surplus amount either in part or full.

    Thanks

    Ashal

  264. Prateek Sethi says:

    Thanks Ashal,

    But that amount I can withdraw after possession right?

  265. Dear Prateek, no, before possession, you can not withdraw amount from MG account.

    thanks

    Ashal

  266. Prateek Sethi says:

    Hi,
    I will get possession in June2014, if I credit some amount in maxgain account, in this case can I withdraw that extra amount before getting possession .

    Thanks

  267. Dear all, somebody has posted a query on 27th Feb 2013 but instead of posting it at the bottom, it is posted some where in between the discussions. I’m sorry to say that I’m unable to locate this query & hence not in position to answer it. Whoever has posted it, I request to repost at the bottom of the discussion.

    Thanks

    Ashal

  268. Dear Pawan, better late than never. One time conversion from Term loan to Max Gain is possible but reverse is not possible. So contact your local RACPC & ask there for your term to MG conversion. My advance wishes for your hard work & leg work. 😉

    Thanks

    Ashal

    1. Pawan Kumar says:

      Dear Ashal,

      Today I went to RACPC after they were not willing to reply to my emails regarding conversion of TL to Maxgain.
      Even after spending close to 3 hours, doing huge leg work and meeting plethora of officials I couldn’t convert it as the official told me that since the CD hasn’t been executed (equitable mortgage rights), the a/c can’t be converted!
      But he told me if I wish to deposit any surplus amount I can still do it and get the same benefits (as in Maxgain like reduced interest outgo) barring the liquidity, which will be activated once the account is converted to Maxgain upon CD execution.
      Do I have any other option apart from believing his words or should I send them a written application and hopefully the account gets converted thru this legal channel which babus prefer (pun intended).

  269. Pawan Kumar says:

    And to add to the misery, I haven’t even received the Loan Agreement yet.
    It wasn’t given to me at the time of disbursement and got to know it on saturday only that such a thing exists!

  270. Pawan Kumar says:

    Unfortunately, No is the answer as I wasn’t aware of it at the time of applying for loan.
    ‘Ignorance is bliss’.
    Anyhow, how can I convert it now? Should I contact RACPC?

  271. Dear Pawan, before I answer your query, I need to know, at the time of applying, had you asked to avail Max Gain exclusively? I.e. had you write down anywhere in your loan application that you want to go for Max Gain?

    Please read your loan agreement for more info on this.

    Thanks

    Ashal

  272. Pawan Kumar says:

    Thanks a lot Ashal for prompt reply!
    This explanation goes a long way in clearing my long-standing doubts regarding Maxgain but (it now appears) in vain.

    Do you have any idea how does SBI decides whether to assign normal Term loan or Maxgain to a customer because last Saturday I went to my branch and they told me that mine is a normal Term Loan and not Maxgain (came as a shock!!!)

    Also, they told me that for Maxgain SBI charges higher rate of interest. Is this true?
    At the time of taking loan last year (June/July 2012), my EMI has been decided on RoI at 10.5% now it is 9.95% (for loan lesser than 30 lacs), any ideas how to take advantage of this drastic change? Can this help me in reducing the amount of my EMI?

  273. Dear Pawan, in case of Max Gain, the working is not same like a normal term home loan.

    If you are parking 5l Rs, in your MG acct. the interest outgo ‘ll be 20K (your example) but principal reduction ‘ll remain 3K. So where are those 2k Rs? well my dear friend, being Over Draft account, those 2K Rs. ‘ll be available for surplus in to your MG acct. itself. so for next month, your surplus amount ‘ll be 5.02L Rs. & this way It ‘ll keep on increasing. so your loan ‘ll be over in exact 180 months but the interest out go ‘ll be lower than normal home loan.

    For a hypothetical situation, if you have parked full 25L Rs. the interest outgo ‘ll become zero but your loan ‘ll run for full term. so the interest part of your EMI ‘ll be available for withdraw as surplus to you.

    In any home loan, the borrower, tends to repay early & close the loan between 5 to 8Y term itself. So in case of normal loan, once a person prepay, there is permanent loss of interest for SBI but in case of Max Gain, there is possibility that due to available liqidity, the borrower may withdraw the amount & loan ‘ll revert back to it’s original position i.e. higher interest pay out due to higher loan amount.

    the MIO & MPR ‘ll change with each passing month due to change in outstanding loan amount. Sample this. In June 2012, Your loan amount was 2500000, now in Nov. 2012, it’s 2488000 & not 2500000.That’s why your MIO & MPR ‘ll not be the same.

    Thanks

    Ashal

  274. Pawan Kumar says:

    Hi Ashal,

    Can you please answer my queries on Maxgain using these assumptions:

    This is the current scenario as per my understanding of Maxgain Loan A/c with these assumptions: EMI=25k(22k+3k), Loan amt=25L, Monthly Interest outgo(MIO)=22k, Monthly Principal reduction(MPR)=3k, Loan Tenure=15yrs/180months.

    1) If surplus=5L is kept in Maxgain Loan A/c, EMI will remain same as 25k, Revised MIO=20k and MPR=5k (assumed figures, I understand that actual will vary as per SBI’s calc.). I hope that is how MaxG works, which means that more principal gets reduced every month and subsequently the Original Loan amount of 25L will finish before the stipulated 15yrs.Pls. confirm if I am right or wrong. Also, why MIO and MPR are not equivalent in 50:50 ratio?

    2) Hypothetically, if someone keeps surplus=25L=Loan amount, EMI will be=25k then MIO=0 and MPR=25k??? If true, does it implies that loan will get finished in (25L)/(25k)=100months=8.33 yrs without paying a single penny of interest?

    3) Although none of my business, how does SBI benefits from this MaxG as their income gets reduced because of the reduced interest outgo.

    4) My EMIs are same for loan but MIO and MPR are varying every month. They are not even same for two 30days months nor for two 31days months. Why is it so???

  275. PRADIP says:

    Thanks Ashal for clearing my doubt.

  276. Dear Pradip, the addition of interest in book balance happens for the fact that bok balance is not your actual loan outstanding amount. But it’s the difference of Drawing power – available balance.

    In simple words, Available balance (parked surplus amount) – Drawing power (actual loan o/s amount) = Booked balance

    Now when the interest was deducted on 31st Jan 2013, this interest was deducted from the parked surplus amount & thus it goes down by same amount & hence the difference of DP to AB increases. hence the book balance increases.

    For example purpose, sample this

    DP on 30 jan = 1542000
    AB = 202000
    BB = AB – DP = -1340000
    Interest amount = 12000 on 31st jan
    Hence AB = 190000
    Now BB = AB – DP = -1352000

    Hope it clarifies your basic doubt regarding Avaiable balance & book balance.

    SBI Max Gain, software do have some glitches due to which the first month calculation many a times, remain problematic. In your own case, in the first month itself the princiap amount should not be 8K Rs. but it happened.

    Thanks

    Ashal

  277. PRADIP says:

    Dear Ashal,
    I forgot to mention that interest was calculated on 31/1 and added to my book balance. why it adds to it?
    Can’t they show a separate column for interest calculated on monthly basis?

    Please do reply. Thanks.
    Regards
    Pradip Chaughule

  278. PRADIP says:

    Dear Ashal,
    I have taken home loan of 15.5 L and EMI started from Jan 13. In first EMI principal deducted 7314/- since interest calculated for 10 days only. I also parked around 2L in my OD account as per convenience, but in Account statement I see 12179/- Rs. interest is charged and added to book balance.
    1. Now I am not understanding for how many days this interest rate is calculated?
    2. On 10/2/13 EMI was deducted of 15.250 K and drawing power was reduced only from 1542686 to 1540868, i.e. 1818/- principal taken from me?? One more thing, a loan calculator for 10% interest rate shows 2081/- principal for same amount without parking extra money parked in it….. Is SBI cheating me??

  279. Dear Rajiv, please read your loan agreement or contact your branch. Please do not assume that it’s base rate linked already. Please confirm the same. Once it’s confirm, please pay the confirm the conversion fee to get new ROI of around 9.95% based upon your original loan amount.

    Thanks

    Ashal

  280. rajiv.p says:

    Right now in my home loan page, the applicable interest rate is shown as 11%. So it looks like base rate based right?

  281. Dear Rajiv, please check with your branch that your loan is a PLR linked or Base Rate linked. In case of Base rate linking what’s the spread? If it’s the current minimum spread, the applicable ROI ‘ll be 9.95%. In case your loan is still PLR linked, please convert your loan to Base rate one & after that pay the conversion fee to come down to the current lower spread of Base rate + 0.25%.

    Thanks

    Ashal

  282. rajiv.p says:

    What is the present home loan interest rates for existing home loan customers? (less than 15l) I mean recently there was some revision right, is it applicable to existing customers?

  283. Dear Mandar, the exta amt. parked by you in MG acct. ‘ll be treated as repayment & thus only for calculation purpose of Interest. This surplus amount at any given point of time is available for withdraw & that’s why it’s shown to you in your bank statement as available balance.

    Why do you want to pay off permanently as it ‘ll result into compromising your liquidity for that surplus amount.

    Thanks

    Ashal

    1. Mandar Kulkarni says:

      Thank you Ashal for the information 🙂

  284. Mandar Kulkarni says:

    Hi Ashal,

    I have got lot of information regarding Maxgain Loan and it’s benefits from this forum. I have recently took SBI Maxgain Loan 22 Lakh (for Resale property).

    I just want to know how to make prepayment?
    I asked to the lady in bank and she told me to put money in your account and you’re done. But if I put some amount in OD account then it is added in Available balance. So what should I do to deduct extra amount permanantly from total Loan Amount?

    Regards

    Kulkarni

  285. Dear Gaurav, please check your drawing power to know the debit of principal amount.

    Thanks

    Ashal

  286. Dear Pravin, in your case, the first EMI which should come in the month of Jan, has not been deducted but there was interest calculation on regular amount. Interestingly, after the credit of EMI in Feb, 2013, the fulll amount has been adjusted as loan repayment. Although it’s wrong on SBI’s part but some where there are some glitches in the software of SBI & first month is prone for such erractic calculations.

    Please do nothing as of now, except for parking more & more surplus & wait till 5th march to get credit of next EMI & see the results.

    The interest to be charged from you for the month of Jan has been adjusted from the first 1L Rs. surplus parked by you.

    Thanks

    Ashal

  287. Dear Vijay, Please ignore the point e answer above in my prev. reply.

    Well whatever you have understod for MOD is correct. It’s indeed necessary. We are in the search of loan & bank has every right to adopt such safe prectices to avoid the chaces of frauds.

    I have paid for my own MOD charges & this is for our safety also in a sense. No one can sell our house even in our absence as the Govt. record ‘ll keep telling the Encubrence over the property in the EC.

    Thanks

    Ashal

  288. Dear Vijay, here are the answers for your queries.

    Hi,

    My SBI MaxGain loan got sanctioned today and approached the bank manager for some queries. He casually mentioned about some 25,000rs max fees for MoD. Could not ask him in detail since the bank was too busy in the morning. Can someone explain me what are the fees/charges thats involved in MG loan.

    a) Processing Fees – either a %age of the loan amount say 0.5% or a fixed sum say 5000 Rs.

    b) Fees for Legal Opinion – Again very nominal – 1000 to 2000 Rs.
    c) Fees for Valuation report Again very nominal – 1000 to 2000 Rs.
    d) MoD fees (is this really applicable) – Can you clarify this? I do hope you are asking for either franking for loan documentaion or Mortgage?
    e) anything else ???? – Please answer my question above.

    Thanks

    Ashal

  289. Dear Pravin, I’m trying to answer your query.

    1). Loan disbursed was 25,40,000/-, so after my first EMI why Limit & Drawing power is 25,22,142 and not 25,40,000/-.
    What’s your EMI & from which acct. it’s getting credited into MG acct.?

    2) After I transferred 1,00,000/- to my Maxgain OD account why available balance is only 83,316/- & not 1,00,000/-
    The book balance of 2538000 was showing an amount of interest due to you which was not debited due to lack of funds. the same has been settled not from your surplus 1L Rs. & that’s why your withdraw balance is now 83K Rs.

    Please wait for 1 more month to streamline MG acct. Interestingly MG acct. software creates such nasty glitches in the first month for many accts.

    Thanks

    Ashal

    1. pravin j says:

      Hi Anshal, Thanks for your reply. Please find the more details as below.

      My EMI is 24150/- and its getting credited to my MaxGain account from my ICICI Bank a/c on 5th of every month.

      statement is as below:

      Full Disbursement 30-Dec-2012 25,40,000/-
      DEBIT INTEREST 31-Dec-2012 1,392/-
      DEBIT INTEREST 31-Jan-2013 21,584/-
      BULK POSTING ECS 05-Feb 2013 24,150/-
      BY TRANSFER 05-Feb-2013 1,00,000/-

      After My first EMI my deducted status was:
      1)
      After Fist EMI was deducted:
      Book Balance : -25,38,826
      Available Balance : 0
      Limit : 25,22,142
      Uncleared balance:0
      Drawing Power :25,22,142
      2) After I transferred 1 Lakh
      it was
      After I transferred 1,00,000 to MaxGain OD account
      Book Balance : -24,38,826
      Available Balance : 83,316
      Limit : 25,22,142
      Uncleared balance:0
      Drawing Power :25,22,142

      from above what i see is book balance = Drawing power – available balance.

      Question is 1) how come drawing power is reduced from 25,40,000/- to 25,22,142 in just one month and 2) why available balance if 83316 instead of 100000/-

      Today I transferred additional 1 lakh and available balance is now 1,83,316 here is other details.
      Book Balance : -23,38,826
      Available Balance : 1,83,316
      Limit : 25,22,142
      Uncleared balance:0
      Drawing Power :25,22,142

  290. Hi Ashal and other experts who have already availed SBI Max Gain loan.

    Can you confirm whether the above mentioned MoD is mandatory and part of your Max Gain Loan aswell.

    How should I go about this.

    Thanks
    Vijay

  291. Hi,

    Is the MoD requested from SBI is mandatory ? I searched the forum and found this information about MoD from one Mr. Sreedhar which I have reproduced in parts below.

    One more thing the bank manager are insisting is to go for mortgage deed (The bank call this as MOD) in favor of the bank. The manager says this is for the banks safety. This will cost 30 – 50 K in the form of stamp duty and registration charges. If you do this, virtually your loan will be tied up with the bank. It will be a tedious job , if you need to switch a loan to any other bank. The best part of the deal is you need to bear the expenses for “Bank’s safety”. I told the manager i am ready to go for MOD if the bank bears the expenses. I am not so rich to spend for banks safety . Each time I visit the bank, the manager will talk to me about MOD, But some how I am avoiding it

    I guess MOD means “mortgage by deposit of title deed “.
    Usually once the banker lends you the money , after registering the house (or UDS in case of new property), the sale deed / title deed will be with the banker. If you take an EC only your name will be reflected in the EC.There were cases of fraud in this method .If you are well connected , you can get a duplicated copy from the registrar office and sell the house to some one else. The buyer may not be aware that there is a loan pending on that house .
    To avoid this banks have started adopting MOD. Once the registration is done , they will ask you to do mortgage in favor of the bank for the loan amount. This needs to be executed in the registrar office and it will cost money towards stamp duty,legal charges etc. After doing MOD if you take an EC , your name and bankers name along with the loan amount will reflect in it. So the chances of fraud is minimized.
    From the banks perspective its very safe for them. But for us we need to bear the expenses of executing MOD. Moreover when you try to move your loan to any other low cost banker , this MOD has to be cancelled by the old bank. There will be lots of paper work and procedural issues associated with this..
    These are the facts which i learned from my experience. I may not be 100 % correct .

    Thanks
    Vijay

  292. Hi,

    My SBI MaxGain loan got sanctioned today and approached the bank manager for some queries. He casually mentioned about some 25,000rs max fees for MoD. Could not ask him in detail since the bank was too busy in the morning. Can someone explain me what are the fees/charges thats involved in MG loan.

    a) Processing Fees
    b) Fees for Legal Opinion
    c) Fees for Valuation report
    d) MoD fees (is this really applicable)
    e) anything else ????

    Kindly clarify

    Thanks
    Vijay

  293. pravin j says:

    Thanks Ashal and jaoinvestor team for solving quries for SBi MaxGain account. I solve lot of my quries but I have onve very specific query….

    I have taken SBI maxgain Home loan recently and yesterday my first EMI was deducted. after EMi was deducted I have transferred addition one lakh into my MaxGain account but somehow calculation does not match.
    1)
    After Fist EMI was deducted:
    Book Balance : -25,38,826
    Available Balance : 0
    Limit : 25,22,142
    Uncleared balance:0
    Drawing Power :25,22,142
    2)
    After I transferred 1,00,000 to MaxGain OD account
    Book Balance : -24,38,826
    Available Balance : 83,316
    Limit : 25,22,142
    Uncleared balance:0
    Drawing Power :25,22,142
    My Questions:
    1). Loan disbursed was 25,40,000/-, so after my first EMI why Limit & Drawing power is 25,22,142 and not 25,40,000/-.
    2) After I transferred 1,00,000/- to my Maxgain OD account why available balance is only 83,316/- & not 1,00,000/-

    Please let me know if anyone know the calculations or ever faced similar issues ?

  294. Gaurav Jain says:

    I have taken a loan of 40L for 15 years with a moratorium period of 7 months. But I have started paying FULL EMI from 1st month only. Will it help reduce the total term in any way?

    1. Dear Gaurav, are you getting the benefit of full EMi in the form of principal adjustment or not? Please check it first with SBI people or even from your netbaking facility.

      Then only I can comment anything.

      Thanks

      Ashal

      1. Gaurav Jain says:

        Ashal,

        I will have to check that. Till now the only entries in my account are:

        31-Jan-2013 (31-Jan-2013) DEBIT INTEREST 3,139.00
        29-Jan-2013 (29-Jan-2013) DR INT CREDIT 784.83
        29-Jan-2013 (29-Jan-2013) DEBIT INTEREST 784.83
        28-Jan-2013 (28-Jan-2013) TO TRANSFER NEFT XYZ 28,22,293.00

        Even my EMI payment has not yet credited. So one more thing, how many days it takes the EMI to get credited. My Salary A/c in HDFC got debited on 5th. Still no credit here in SBI MG A/c.

        1. Dear Gaurav, By the time of writing the reply to you, I hope EMI had been credit into your MG acct. The entries in your acct. for 29th jan is wrongly debited interest & recredit of the same. On 31st jan, the actual interest has ben debited.

          Thanks

          Ashal

          1. Gaurav Jain says:

            Ashal,

            EMI has been credited. As for whether the early-EMI is paying towards the pricipal or not, I think I will come to know that in the next month’s statement.

  295. Dear Pradip, no your father can not sign your MG acct. cheque book, as he is not a joint account holder in your MG acct.

    Thanks

    Ashal

    1. PRADIP says:

      Dear Ashal,
      Where should I ask for a loan agreement copy by sbi(home loan branch/BKC where i franked all papers), they have given me copy on which only my sign is present and blanks for value to be entered. I need it for claiming Interest subsidy from employer.
      Thanks.

      1. Dear Pradip, please contact your branch for the copy of the agreement. Although it’s quite strange to me that your employer is asking for copy of loan agreement. Normally only the interest & principal break up certificate provided by branch of bank is enough to avail tax benefit at source.

        thanks

        Ashal

  296. PRADIP says:

    Dear Ashal,
    I have another doubt if my saving account is a joint account with my Dad, but home loan I am single applicant. I have taken O/D acc cheque book can my father sign It?
    Thanking you.

  297. Dear Pradip, it means your ATM Card is still not linked with your MG acct. Please ask your branch staff for the linking. Alternatively, you may demand a separate ATM card for MG acct.

    Please do note, while withdrawing money using MG accct. through an ATM card, please withdraw it only from SBI ATM, else each transaction ‘ll be charged as MG acct. is not a SB acct. & hence not eligible for mly 5 free transaction.

    Thanks

    Ashal

  298. PRADIP says:

    Yes. Ashal, It has been disbursed fully. Still it is showing me same problem.

  299. Dear Rat, I checked the given nos. The 26220 EMI you are getting & 27041 you are paying, indicates that your loan was sanctioned with a moratorium period of 12 months. That’s why @ 27041 Rs. the loan ‘ll be over in 168 months. Now you have opted for EMI repayment from Jan 2013 itself, the loan ‘ll be closed earlier than 15Y time.

    Thanks

    Ashal

    1. Rat says:

      Thank you Ashal. I now remember seeing it mentioned somewhere about 1 year moratorium period, even though I did not request for such a thing.

      I get another query now. Even though there is a 1 yr moratorium period, I opted for EMI (27041) from the 3rd month onwards. Loan was sanctioned in Nov. I started paying EMI from Jan onwards. Does this EMI contribute towards bringing down the outstanding principle ? Is there a way to confirm this from the onlinesbi page ?

      For the Feb10 EMI, I noted down the following numbers, just before EMI date, and after:
      Date Book Balance Avl Balance EMI
      2/9/2013 -1557254 842746
      2/12/2013 -1530213 869787 27041

      The following numbers remain unchanged from day1:
      Limit 2400000
      Drawing Power 2400000

      Disbursed amount as of the above dates is 16.4L
      I have parked an amount of 80100 in the OD account.

      Does this indicate, in any ways, that the principal-component of EMI is actually bringing down the loan outstanding amount ? Or am I paying only the interest-part as of now ?

      1. Dear Rat, from the given nos. by you, your moratorium period is active & you are not getting the benefit of loan repayment but interest outgo is lower due to surplus parked by you as well as created by excess amount coming from full EMI.

        How did I come to know of it? Just look at your Drawing Power, it’s your actual loan o/s amount as on date & it’s same from day one.

        Thanks

        Ashal

        1. Rat says:

          Sigh!! I tend to believe that this moratorium period with full EMI is a not-so-good thing. Or rather, is it ? Would it have been advantageous if there was no moratorium period at all ? Could you please advise on this ?

          Also, if you too believe that moratorium with full-EMI is not good, is there a way out ? Like walking into the branch to get rid of the moratorium ?

          1. Dear Rat, the moratorium, is not good from financial sense. Please visit your branch & contact your branch manager to get rid off from moratorium if possible. Till the time, this mort. is in place, practically you are paying only interest & no principal repayment is there. yes due to max gain surplus parking of this principal amount into, you are saving some interest but repaying is far better.

            Thanks

            Ashal

  300. PRADIP says:

    Dear Ashal,
    I have little doubt about my atm card withdrawl, because branch manager had told me that you have to use same debit cum atm card just if you want to withdraw from o/d account select current account but when I tried it shows balance of Saving account only. I don’t understand how to connect o/d acc to Atm.
    Please help as usual. Thanking you.

    1. Dear Pradip, have you availed full disbursal of your loan or not?

      Thanks

      Ashal

  301. Rat says:

    Thanks Ashal. That brings a lot of relief 🙂

    Could you help me figure out how the EMI of 27041 is arrived at for my MG loan ?
    The approved loan amount is 24.4L (24L home loan, 40K insurance) for a 15 year period.
    Interest rate is 10%. I tried in different online calculators and always get a lower EMI figure.

    apna paisa calculator ( http://www.apnapaisa.com/loan/home-loan-india/apply/emi-calculator.html ) gives a figure of Rs 26220 only

  302. Dear Rat, that last day of the month deduction is the interest on 14L Rs.

    Regarding the SMS, please ignore the same. It’s the common problem of mismatch in sms date & actual EMI date.

    Thanks

    Ashal

    1. Rat says:

      So to summarize, there are two payments/deductions that happen on a MG loan:
      1. end-of-the month “interest” deduction that happens from the OD account itself
      2. the normal EMI deduction from salary account (in my case, on 10th of the month)

      I have 3 queries based on this:

      I. Of my 24.4L 15yr loan, 24L is for house, 40K is for insurance.
      14L is disbursed on Nov 2012.
      So in item (1) above, the “interest” is for this disbursed 14L. Am I right ?

      II. In EMI, I believe there is a “principal” component and an “interest” component.
      Is this “interest” component for the entire 24.4L loan amount ?

      III. Is there a way for us to find out the principal-interest split (other than by walking into the branch) ?

      1. Dear Rat, in case of EMI, there are 2 components. Principal & Interest. For MG home loan, the principal component ‘ll be adjusted immediately but the interest part ‘ll wait till the last day of the month & as per the calculation based upon the surplus kept by you, the actual interest ‘ll be debited. The remaining interest part if any ‘ll be there in MG itself as surplus.

        I. Of my 24.4L 15yr loan, 24L is for house, 40K is for insurance.
        14L is disbursed on Nov 2012.
        So in item (1) above, the “interest” is for this disbursed 14L. Am I right ?
        yes the interest ‘ll be for 14L Rs. only.

        II. In EMI, I believe there is a “principal” component and an “interest” component.
        Is this “interest” component for the entire 24.4L loan amount ?
        The interest ‘ll be charged only on the 14L Rs. & balance interest ‘ll be there as surplus.

        III. Is there a way for us to find out the principal-interest split (other than by walking into the branch) ?
        You can prepare a loan amortization sheet for yourself

        Thanks

        Ashal

  303. Dear Bharat, if even after parking the full loan amount, you want to have the liquidity of that amount, a long term MG is beneficial.

    Thanks

    Ashal

  304. Rat says:

    Hi Ashal,

    My SBI MG loan is of 24L. The first installment of 14L was disbursed on Nov 29, 2012. From then onwards, there is some deduction happening on the last day of every month.

    I opted for EMI from Jan 2013. On Jan 10, EMI amount (27041) was taken from my salary account. Now today I get an sms which says “PDC/ECS/SI of Rs 20460 on a/c xxxxxxx is due on 31012013. Ignore if paid”. What does this mean? I have to pay on 10th of the month and then again on the last day of the month ? Isnt something wrong here ?

  305. Bharat A says:

    Dear Ashal,

    In what instance choosing SBI MG loan is beneficial i.e., for a 15y loan period if I plan to repay the loan within 5-7years is it still advisable to go for SBI MG loan?

    I assumed the MG will benefit only if we carry out loan paying for long term.

    Please correct me if my understanding is wrong.

    Regards,
    Bharat A

  306. Rakesh_Gurgaon says:

    Dear Ashal
    I have taken a MaxGain loan from SBI for 25 Lacs.
    While i understand that when i keep additional funds in the Max Gain account the interest will be charged on a lower principal and my loan will be paid out faster.
    Apart from incidental surplus funds, I intend to deposit my annual bonus every year towards paying this loan and reduce my EMI
    MY QUERY: In case i want to reduce my monthly EMI after depositing a lumpsum into MaxGain, is there a limit on the number of times i can do this EMI reduction?
    Regards,
    Rakesh

    1. Dear Rakesh, your understanding is not correct. In case of Max Gain, whatever surplus you are keeping in your MG acct. it ‘ll be treated as part prepayment for the calculation of interest. For example if your EMI is 25000 Rs. & out of which your normal interest is say 21000 Rs.

      Now you have parked some amount in your MG acct. due to which your calculated interest is 14000 Rs. Now my dear friend, this 7000 Rs. saved interest ‘ll not be adjusted towards principal. It ‘ll add up into your existing surplus & ‘ll help to save interest outgo for next month.

      The principal adjustment from EMI in MG happens only as per your original loan amortization sheet. So in effect, your loan term ‘ll remain same (if 20Y, your loan ‘ll run for next 20Y) but the over all interest outgo ‘ll come down.& thus you ‘ll be able to save against a normal home loan.

      Thanks

      Ashal

      1. Rakesh_Gurgaon says:

        Thank you Ashal for the clarification.

        Could you help resolve my query reg EMI reduction as well.

        MY QUERY: In case i want to reduce my monthly EMI after depositing a lumpsum into MaxGain, is there a limit on the number of times i can do this EMI reduction?

        1. Dear Rakesh, Why do you want to go for lower EMI? For that the surplus amount parked by you ‘ll be adjusted permanently against the loan balance & you ‘ll lose the liquidity of the same surplus amount. Yes it’s possible to do the same. Please contact SBI for it.

          Thanks

          Ashal

  307. Dear Kamlesh, the 8666 Rs. ‘ll become surplus & available for withdraw as & when dear Vijay wants to. Please read my above reply again. At the end of the month, the available surplus is 10.08666L Rs. After each month, this surplus ‘ll keep on increasing due to basic 10L Rs. & add on surplus from saved interest.

    Thanks

    Ashal

    1. kamlesh patel says:

      Thanks Ashal for confirming my doubts.

  308. kamlesh patel says:

    So Ashal,

    8666 Rs is reduced from principle & can not be used/withdraw by Vijay
    OR
    It will be added in OD account as surplus which can be used/withdraw by Vijay ?

    Thanks
    Kamlesh.

  309. Hi Ashal,

    thats very quick. However I am not clear on the EMI pay out.

    30L – EMI Payout = 25,000
    20L – EMI Payout = 25,000 (however interest payout would be as you provided)

    or
    30L – EMI Payout = 25,000
    20L – EMI Payout = 16334

    Thanks
    Vijay

    1. Dear Vijay, the actual EMI for 30L Rs. loan @ 10% ROI for 20Y term ‘ll be 28951 Rs. not the 25000 Rs. as randomly put by you.

      Now here is the answer from the actual EMI.

      EMI paid 28951

      Normal Interest = 25000 Rs.
      Calculated interest = 16334 (due to parking of 10L Rs. as surplus)
      Surplus from the interest saved = 8666 Rs.
      So for next month, your available surplus ‘ll be 10L+ 8666 = 10.08666 Rs.

      Hope it clarifies your doubt.

      Thanks

      Ashal

  310. Hi Ashal and other maxgain experts,

    One basic question on SBI Max gain.

    Assume I have taken loan for 30lakhs at 10% interest and my EMI is 25,000rs per month.
    If I pay/keep 10 lakhs in my OD account then will my EMI reduce be 16,666rs OR still it would be 25,000rs however the 16,666rs would go as EMI and the balance (25,0000-16666) would be available in OD account again.

    How does this work.

    Thanks
    Vijay

    1. Dear Vijay, if you are keeping 10L Rs. in your MG acct. it translates into lower interest pauy out as for calculation purpose your loan ‘ll be 20L Rs. So what ‘ll happen actually?

      30L Rs. no surplus – interest to be charged = 3000000*10/1200 = 25000 Rs.

      Now parked surplus amount = 1000000 Rs.

      Hence calculated interest on 2000000 Rs. loan = 2000000*10/1200 = 16334

      So out of your total EMI instead of full interest deduction of 25000 Rs., only 16334 Rs. ‘ll be deducted & remaining 8666 Rs. ‘ll be available as surplus balance. This add on surplus of 8666 Rs. ‘ll help to bring down interest outgo for next month & ‘ll keep on increasing with every passing month.

      Hope I ‘m able to answer your query. If you are still in doubt, please feel free to discuss.

      Thanks

      Ashal

  311. Anuradha says:

    Thanks Ashal for the response.

    As per my current ROI (12.5), the interest debited is always less than the EMI credit to the MG account. The DP/Limitof my acc. is being deducted by 3-4K each month, but the Book Balance is reduced by (EMI-Interest debited each month) which is 500-800 Rs only. So here the Book Balance will always be greater than the DP. I hope u got my point here.

    To reduce the ROI, do I have to make any payments to SBI.

    Thanks,
    Anu