How SBI Maxgain home loan scheme helps you to reduce interest rate burden?
SBI Maxgain home loan scheme is a unique scheme offered by State Bank of India, which works like an overdraft in your bank account. You can consider such scheme and park your liquid finances and get benefit from home loan interest. This article is based on request from Abhay on suggest a topic. In this article, I would provide the features of the SBI Maxgain scheme, its negative points by considering this SBI Max gain home loan scheme.
How does SBI Maxgain home loan Scheme works?
SBI Maxgain scheme is like any other home loan scheme, but provides an Overdraft facility to withdraw money like what you do in Current Account. The bank provides cheque book and internet banking facility separately for this Maxgain home loan scheme account. You can withdraw the amount indicated as “available balance” in your Maxgain home loan account any time without any prior intimation to the bank.
Also Read: Which home loan to prefer, fixed or floating interest rates?
Positives of SBI Maxgain Home loan Scheme
- Overdraft facility for withdrawing money anytime.
- You can park your surplus money or liquid finances into this Maxgain home loan account and get an interest reduction on your home loan.
- Withdraw surplus money anytime without any prior intimation to the bank
- No processing fees or application required to withdraw money. This would save time and effort.
- No extra home loan interest rates apply for this scheme except that if your loan exceeds Rs 1 Crore, you need to pay a premium of Rs 0.25%.
- You can also use this as an alternative to personal loans as this would offer low interest rate of 10%, whereas personal loan comes with 14% to 18% interest rates.
Negative points in SBI Maxgain home loan scheme
- You cannot withdraw surplus funds in case your of under construction property during such period.
- Like any other home loan scheme, in case of plot you need to construct the house within 3 years, else you would be charged with a higher rate of interest.
- If there is overdraft facility, you would get tempted to withdraw money for sundry expenses and you cannot reduce your savings.
Some of the FAQ’s on SBI Max gain home loan scheme
1) Are there are separate processing fees charged for this scheme?
Currently SBI charges same processing fees for SBI Maxgain as well as for regular home loan schemes.
2) Are there are separate Interest rates being charged for this scheme?
Currently SBI charges the same interest for SBI Maxgain as well as for regular home loan schemes. Currently the home loan interest is 10.10%
3) How much interest would I earn on my surplus fund deposited in the SBI Maxgain account?
Though this is a SB / Current account, you would not get any separate interest on this. The surplus funds deposited would be off-set with your home loan amount and you would not be charged with any interest on home loan to that extent
4) My SBI Maxgain home loan and surplus deposited are same, whether my account would get closed?
No. Your account would be still active. E.g. if you have a home loan of Rs 25 Lakhs and you have deposited surplus money of Rs 25 lakhs surplus money into it. You would not be charged with any home loan interest. Your overdraft amount would be increased to that extent.
5) Are there any special benefits for women applicants?
Yes, women applicants would get a rebate of 0.05%. Currently SBI home loan interest rates are 10.10% and women applicants can get it at 10.05% interest rates. If your wife is co-applicant, you can get such schemes with this rebate as joint owners.
6) Can we make regular transactions like investment in mutual funds or payment of utility bills?
Since this is like a regular SB account, you can do all transactions what you generally do in SB account. However ensure that you pay your bills within the OD amount, else they would get bounced.
7) What is withdrawing power?
Withdrawing power in the SBI Maxgain scheme is actual outstanding principal amount
Also Read: Cheapest and Best home loan interest rates in India
8) What is available balance in the SBI Maxgain scheme
This is the amount which you can withdraw as an overdraft facility from the SBI Maxgain account
9) How can I transfer from regular home loan to SBI Maxgain home loan?
You can contact SBI bank for switching this. But before doing that, do a check on the cost of such conversion which includes conversion charges, penalties and net benefit what you would get with such conversion.
10) Can I do pre-closure of this account?
Yes you can do that, however standard rules for regular home loan schemes of SBI would apply here. You should know the guidelines for closure and take the call.
Conclusion: While there are several home loan schemes being offered, I felt SBI home loans comes with several benefits. SBI Maxgain scheme is one such unique home loan scheme which is good for those who want to take benefit from overdraft by parking their surplus funds into it. You can also use this as alternative to personal loan too. I felt this is one of the way to save money
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Suresh
SBI Maxgain home loan scheme
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Hi Suresh,
My Homeloan was sanctioned in March last week 2017 and we received DD in second week of April. Then Rate of Interest was 8.75 for Women applicant for Loan amount more than 30 lakhs for Floating Interest(Loan Tenure 20 Years). Today August 2nd saw that RBI cuts repo rate by 25 Basis points to 6%. Can i avail or get any lower Interest benefit?? Also guide us on How we get to know that Pradhan Mantri Aawas Yojana linked to my SBI Maxgain , to avail the benefits if any??
Regards,
Ramakrishna Zalaki
is there any intrest charged if i withdraw from my parked fund in maxgain
Hi,
I have taken maxgain option while taking loand, now I would like to close my loan in one go
Is there any hidden rule for replayment, or should i directly go and close loan and get my property papers back
pls suggest
Regds,
Dev
Dear Mr. Suresh,
I had a HL from SBI of 50L with ROIis 9.25 ( Women Customer). Loan taken in July 2015.
Can I will be benefitted if transfer it to ,”SBI MaxGain HL?
Is it possible to change the existing HL to Maxgain HL?
Regards,
Devendra
Main drawback of maxgain is, minimum prepayment is 25% of your loan amount and only two prepayment is allowed over the loan tenure.
No one mention this while giving loan. I come to know this when i go for prepayment.
Please consider this as major condition when you are taking loan for large amount like 30 lac..
If you are not paying interest for money parked in account then it is as good as making prepayment. Why will anyone really need more than two prepayment?
Dear Sir,
Couid i convert my SBI maxgain HL to ordinary HL? if possible then what are the charges will be??
So if I park surpless fund of about 1 lakhs into my OD account. I understand that my interest would be calculated on outstanding principal – 1 lakh. But what about my monthly EMI for the next month. Will it remain the same or get reduced. (ifcourse if EMI remains same then principal component increases)
Whether a salaried employee is eligible for max gain home loan account or not?
Yes, salaried employees are eligible for maxgain loan account
Hi Suresh,
I have applied for Maxgain Home Loan of Rs.30,00,000 and it was approved and Rs.13,95000 has been disbursed to the builder. The property is still under construction and as I have opted for Full EMI, full EMI amount i.e., Rs.27,964 will get debited starting from the next month. There is Available balance of Rs.16,05,000 in my Maxgain loan account as this amount has not yet been disbursed to the builder.
Now my question is if I park surplus funds in my maxgain loan account, will I get interest on the surplus funds? If yes, how much interest will I get?
Hi Ashal,
Can you clarify the following
1) can I withdraw the total amount from available balance(which includes interest accrued on surplus amount deposited) at any point Or am I
entitled to withdraw only the surplus amount I deposit ?
2) Assume my total tenure is 10yrs and i have added some surplus amount to my OD account which made my book balance zero at the end of 5th year.
If the book balance is zero, ideally the EMI will not have any interest component. In that case, what happens to the EMIs that I pay from 6th year
to 10th year (till account closure time)? what will be my available balance at the end of 10th year and can I withdraw
total available balance on liquidation date and collect my registration papers?
3) Am I still allowed to add surplus amount to the OD account though my book balance is zero? In this case, what happens to the interest acrued on
surplus amount?
4) I will ensure that I always maintain surplus amount in my OD account. So can I opt for EMI deductions from my maxgain OD account iself ?
Hi Basavaraj,
I have few queries @ Maxgain loan.
1. How maxgain works if user has taken loan against under construction property? As per my knowledge if loan is approved of rs 30 lakhs , by choosing full emi option the emi is calculated on interest on 30 lakhs(23000- considering 9.5 interest rate + principle.
But, in case of under construction bank has disbursed 3 lakhs, then interest gets calculated on 3 lakhs (i.e.3000), Then in this case in user's ODD account difference between 23000-3000 gets added. Am I correct?
And from next month the intrest gets calculated on 3000000-20000 = 2980000(that may be (19000) but in full emi the user is paying 23000 per month, so my query is
Q1. The difference between 23000- 19000 = 4000 is added in OD account?
OR
Q2. it is deducted from DP?
Hello Anil ,
I have taken HL of 32L from SBI Max Gain. I have around 4L remaining in the HL account. I am getting the possession of the flat in this week. After submitting possession letter to the bank, can i transfer 4L amount to my savings account ? So i can use it for furniture purposes. I dont have transaction rights to transfer money from HL account to Savings account right now, which i will get after submitting possession letter . Waiting for your reply . Thank you !
Dear suresh,
you mentioned the construction must be done within 3 years in case of plot.
I purchased a flat in one of Mahindra project, in this case do I need to get possession within three years of loan saction date? Or within three years of my first disbursement? OR this condition do not apply here?
please clarify.
Thank you
Kishor
you will have to get possession of your apartment within 3 years of your loan sanctioned date.
Mr. Suresh
I have parked some amount in my Maxgain account. I want to know exactly how much i have parked. Is the amount same as Available balance of Maxgain account? Please clarify.
Thats correct Inamdar
Is Bank of Baroda also providing a Home Loan Scheme similar to the SBI Maxgain Home Loan Scheme ?
Dear suresh ji, my home lone was 30.00 lacs in 2009. i pay regular. now 17.00lacs is remaining. Sbi staff and officer unclear in there mind that i am not eligible for SBIMAXGAIN account due to it applicable on 20/00lacs lone.
please tell what is real rules.
Pawan agarwal
Hi Suresh, Thanks for an elaborate explaination about MaxGain scheme. My project in under construction in Noida and not approved by SBI. Is there any other bank giving overdraft facility on Home Loan (I’m aware about HSBC/Standard Chartard/PNB).
Mr. Suresh
Could you please elaborate on money saving features for SBI max gain scheme.
I have already given detailed article, are you looking for anything else ?
Hi Suresh,
I am in big trouble to understand this max gain, my humble request to answer:
– I took loan max gain of 44 L and started 1st day EMI on full amount though dispursement happened for 32L and rest 12 L is there under available balance.EMI amout is 43100 deducted on 5th day.
– When i checked max gain account on 6th Dec what i found is –
a) 43100 got deducted from my salary account as EMI.
b) Another amount around 37000 (which is actually interest amount of 44 L) got added in Book balance and same amount deducted from 12 L under available balance.
Can you please clarify on this ?
Thanks in anticipation.
Regards
Yateesh
Dear Yateesh,
I too have loan acct with SBI, what I feel or understand from my statement is the first amount disbursed is debited to our account and end of the month interest 37 k got debited, which increased the balance due from you to SBI and that may be reason your 12 lakh balance came down. your first disbursement + interest – your emi of 43 k would be the balance due from you to SBI for next month.
I hope this clarifys your query.
Regards,
I saw one property hosa road junction , this project is not approved by SBI(they have not got any SBI approval number ) .but SBI issued loans on this project .Already so many customers have got loan as well .
I’m just afraid of one-thing ,it is not fully approved by SBI ,so any idea if project is not fully approved by SBI but if SBI sanctioned loans ,is it a good decision to book those apartment ?
NOTE : India-bulls and SBM also given loans on this project .
Regards,
Eshwar .
i need 2 lakhs additional ammount loan, how can i topup my loan ammount,my loan is sbi maxgain.
Hi, can I do prepayment of principal here.. I see only I can park surplus amount to reduce interest..But i never seen people talking about prepayment of principal.. Can I pre pay principal amount here? Also as ineterest will be fluctuating, will my EMI fluctuate or that that extra amount will be adjusted in principal amount and EMi will be same?
Hi Suresh,
I took a home loan in the year 2010 for a tenure of 300 months. Here are the details:
Loan Amount: 29.5 Lacs
Interest rate: fixed for 5 years @ 9.25% (I am close to this getting over now)
Part Prepayments: Regular
Remaining Principal currently: 8.5 Lacs
Current EMI: 25000 pm
Since I have other commitments I would want to reduce the EMI that I currently pay which is way beyond that I actually need to pay. I need the EMI to be reduced but the tenure to remain the same which is currently at 246.
Please advise if I can approach the bank to reduce the EMI and keep the tenure unchanged as I have made part prepayments regularly (Principal reduced from 29.5 L to 8.5 L). I am looking to reduce the EMI to about 12K.
hi Suresh,
presently I have home loan with LIC. I have taken the loan of 1500000 in 2011, 4 years past.
Now my outstanding amount is 1335000. I want to shift the loan to SBI maxgain. I nedd to pay around 20000 SBI for processing fee and other.
please advice is it beneficial to transfer the loan.
Hi Manoj, You have not indicated the rate of interest of LICHFL where you are paying now and what is SBI Maxgain which they offered now. Paying Rs 20K is small amount, you can always do that. Based on benefit what you would be getting in next 17 years, you should always consider for lower cost home loan
Hi Suresh,
My LIC home loan interest rate is 10.65 Floating. SBI offer me 10.15 floating.
Initially my the EMI is 14960 in LIC, but I increased the EMI by 5000.
Because of the increased EMI, the duration is reduced and my loan will be end up by 2021, next 7 years.
please advice.
I feel you should switch over when you are getting this at such higher rate. Check what are the switch charges along with processing fees. Every penny counts.
Hi,
I have a query regarding SBI Home loan. We have Home loan of Rs. 12lacs in August 2012. Till today i paid EMI of Rs. 16700/- for last 2 years. In between i paid some amount of Rs. 172000/-, after deductions of my 2years EMI plus Rs. 171000/-, my home loan outstanding is Rs. 825000/-.
Now i want to convert my SBI Home loan into Max Gain Home Loan so i contacted my Branch & asked them to convert my Home Loan into Max Gain Home Loan Account & asked the to open with Rs.825000/- (which is my actual outstanding as on date in Home Loan Account).
Now the Bank Officer is rejecting to open with Rs. 825000/- & asking me to open Max Gain Account with Rs. 997000/- (825000/- + 172000/-). I dont want to block Rs.172000/- as i will not get interest for Rs. 172000/-. Bank Officer is saying i am liable to open Max Gain Account on my outstanding Rs. 997000/-, whatever amount you pay in between they are concerned with that but they will open my Account on 997000/- plus they will not give us any interest on in between payments.
Kindly advise me is this is true, that i cannot open Max Gain Home Loan on my Actual outstanding of Home Loan which is Rs.825000/-?
Thanks
Surekha
The Above Article says Plot you need to construct the house within 3 years, else you would be charged with a higher rate of interest.
Please confirm is it 3 years or 2 Years.
After how many years if the house is not constructed the higher rate of interest would be charged.
Hello Suresh,
Nicely written as a questionaire. I still have few queries to add on.
I have taken MaxGain Loan from April 2014 for Rs 48L @ 10.1% with EMI Rs 46.7K. & Interest amount deducted every month of around Rs 40K (with drawing balance as Zero).
Recently, i added some surplus amount to the OD, but the drawing balance was reduced instantly, due to the amount being deducted with Interest amount.
1) My understanding from the MaxGain rules that;
EMI is for Principle amount only (does not involve Interest) &
Interest amount debit separately at the end of the month.
So total amount being paid every month will be EMI (46.7K) + Interest (40K)? This makes me double burdened. 🙁
Kindly correct if i’m wrong in understanding.
2) I’m having my Sal account from Bank X. EMI Date is 5th of every month.
I am having the problem of maintaining the amount for the days (Sal -to – EMI). Can i push the Sal bank account amount (including surplus) to the OD account & does it mean that EMI deduction is failed for SBI and have adverse effect?
Thanks!
Neeraj
I and my son are in a jam. We jointly have a maxgain account. Now I Have retired yet having taxable income. Now I do not have any tax saving schemes avilable except repayment of housing loan – principle 80-C.
But SBI in maxgain account do not accept additional repayment of principal. So even I have enough funds at my disposal I can not avail repayment of additional principal loan.
Is it possible to convert a maxgain into normal home loan? What are the charges?
deear sir ,
for the interest amount we get for the max gain amount is it taxable. if so how much is advisable to keep in max gains to avoid tax.
rajamani
Hi Suresh,
Can we get tax reduction on Amount of Interest paid on this Sbi MaxGain housing loan(2Lack limit). Can we pay the surplus amount(in Sbi overdraft account) for repayment of principle (80c tax rebate)?
Regards
Sudheer
Sudheer, Housing loan interest is increased to Rs 1.5 Lakhs. No you cannot use surplus to repay priincipal.
Hello !!! Thanks for helping us out with our never ending questions related to Loan. Here also I wanted to ask you omething.
Case : I took the Maxgain Home Loan last year as a co-borrower with my mother for constructing house on my mother's land. Now the constuction is about to get over in a month's time and I have following issues now :
1. Should I get a .05% waiver on my loan installment as it is being taken by a woman as main borrower?
2. Do I need to convey them that the Construction is complete now.
3. If the construction is complete, should I apply for a cheque book and an ATM card for my loan account so that I can park my extra fund there and can withdraw if need it ?
4. If I park the extra fund what would be the outcome? My EMI would reduce or my duration would reduce ?
Thanks !!!!!!
Anshul, Answer is yes for all of them. Money paid would be adjusted against loan amount and in case you need any short term funds, you can always withdraw
Hi,
I applied for SBI Maxgain loan 30L for under construction property and bank has released 21L.I opted for first 6M Interest payable only option for 21L.Now every month when EMI is deducting. the amount is deducting from my remaining loan amount (i.e.9L).I already kept amount in SB account.But money is not deducting from SB account instead deducting from remaining loan amount.Request you please help why it is happening.
Hi Avs, this is the special feature of this loan scheme. Pls consult bank officials and they should be able to help you the way you want
If i have home loan of 30 L with present interest rate of 10.4%, and i park 20L in it. Does that mean for 20L i get 10.4% benefit ?
Or it is wise idea to put my money into Fixed deposit and earn benefits ? how to i compare earning from fixed deposit and saving of loan interest by keeping money in maxgain?
Madhava, The idea here is to use overdraft facility and not deposit money and earn interest.
Thankyou,can this facility be availed to close educational loan
Hi Padmavathi, Since this provides extra amount, you can use it the way you want.
Dear sir; i have sanctioned 18Lk amount's SBI home loan in 2010 and convert it to base rate in 2013 by paying 0.5%processing fees of outstanding amount. now my outstanding amount is 16.43Lk i want to switch this loan to SBI Max gail home loan. it is possible ?what is procedure ? any switching charge ? i have try to enquiry to local SBI branch. he told me that not possible to switch reguler term home loan to SBI Max gain home loan.
Hi Rakesh, I don’t think they can deny. Please call SBI customer support
dear sir i have contect with SBI RACPC and the havet confirm that it is possible to switch SBI max gain
Hi Rakesh, Your message is confusing, have they said “possible” or “not possible”. If possible, not sure what is the problem here ?
Hi Suresh,
Currently I have home loan from LIC housing finance. I have taken loan for 20 Lakhs 4 years ago with 5 year fixed interest of 9.25% scheme. Now my remaining balance is 14 Lakhs and I have to pay fixed interest for 1 year. I am confused on whether I transfer loan to SBI now or wait for 1 more year. Not able to figure out the benifits.
Any inputs/directions you like to provide ?
Thanks,
Hi Anand, Pls approach SBI for transfer of loan. Get the interest rate which they can offer to you. Definitely it would be lower than LIC HFL. Now ask for loan transfer charges and processing charges. You need to consider them before switching.
Thanks for quick reply. Will check with SBI on this.
Thank you suresh for the clarificatons. As now, i can understand that it is a Traditional Homeloan, with overdraft facility on our own money with the advantages of Home Loan Tax Benefit for our own money.
Hi Suresh,
I have few doubts on this product.
1. Is it similar to a loan process by providing an amount and recoverred as emi or an OverDraft Facility with Home Loan Advantages?
2. Is it mandatory to provide some amount on this account? Do we eligible for withdraw money only to the amount we put in this account? If so, wont it be similar to paying interest to bank for my own money?
Regards,
Vignesh. S
Vignesh, Here are my answers
1. Is it similar to a loan process by providing an amount and recoverred as emi or an OverDraft Facility with Home Loan Advantages?
Suresh: Yes, it could be treated as OD with home loan advantage. In OD you would pay interest loan like you pay in personal loan. However in home loan you would pay home loan interest.
2. Is it mandatory to provide some amount on this account? Do we eligible for withdraw money only to the amount we put in this account? If so, wont it be similar to paying interest to bank for my own money?
Suresh: It is not mandatory. However if you want to withdraw any amount you can do it only based on your total available balance which is typically the repaid home loan amount.