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Old 12th September 2016, 19:23   #166
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Default Re: SBI Home Loan : How long it took ?

From what I understand, only the interest part of the EMI is deducted each month and the principal gets accumulated into the current account linked to the Max Gain HL. Therefore, when you pull out money from the current account, you are essentially taking money out from the principal.
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Old 12th September 2016, 20:26   #167
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Originally Posted by harishhm74 View Post
.
Note that the excess park funds reduce the amount of interest charged that month proportionally since the interest is charged on monthly outstanding
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Originally Posted by Jaguar View Post
From what I understand, only the interest part of the EMI is deducted each month and the principal gets accumulated into the current account linked to the Max Gain HL.
I would like to understand further. Do the EMI reduce proportional the reduction of interest saved when we park funds in this OD?
For eg, I have a 50L loan outstanding and my EMI is 50k per month. If I park 50L in my OD account, technically my interest component should be zero.

So what happens to the 50k EMI I pay for that month? Will the entire 50K go to principal outstanding or will it go to OD account after deducting my monthly Principal component?
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Old 12th September 2016, 21:01   #168
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Originally Posted by Holyghost
So what happens to the 50k EMI I pay for that month? Will the entire 50K go to principal outstanding or will it go to OD account after deducting my monthly Principal component?

Exactly. Interest charged is nil and excess EMI goes to OD account and this u accumulate to prepay your loan early or use it for other expenses.
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Old 13th September 2016, 13:48   #169
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Default Re: SBI Home Loan : How long it took ?

Thank you bhpians for chiming in, I appreciate all the responses so far.

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Originally Posted by hserus View Post
At least at the beginning of the loan - which the first four years of a say 20...25 year loan certainly is - the principal component is substantially low in your EMI and most of the money goes towards servicing interest. So that is not quite as much of a surprise as it should be.
I do understand that during the beginning of the loan term most of the EMI is towards interest. What is puzzling for me here is that none of the principal has reduced more so given the surplus funds I had parked in the OD account.

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Originally Posted by harishhm74 View Post
Hi Trishul. There is no issue with the scheme but as @hserus said it is your understanding of the scheme.
Note that the excess park funds reduce the amount of interest charged that month proportionally since the interest is charged on monthly outstanding (or if using daily reducing then the daily outstanding).
The saving in interest payout is the real gain here and not really the term of the loan or principal outstanding. This is how my car loan OD account is behaving as I have almost loaded up the entire outstanding barring a few thousands to keep the loan active. Harish
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Originally Posted by harishhm74 View Post
Exactly. Interest charged is nil and excess EMI goes to OD account and this u accumulate to prepay your loan early or use it for other expenses.
I see no such transaction in my home loan nor savings account where the excess EMI amount due to my parked surplus funds has been credited to my OD account. I see no such credit to my savings account either. So where has this excess EMI gone is really my question.

Let me share an example set of transactions. First on 15th Sept my monthly EMI was debited. On the same day I parked my entire surplus into the OD account matching the outstanding principal. The balance due is now zero.

15/9/15 DEP TFR
04489 RACPC HYDERABAD Credit 42xxx.00
TRF FR <my savings account>

15/9/15 DEP TFR Credit 42,xx,xxx 0.0
99922 INTERNET BANKING

I see interest debited from my OD account which is much lower than the usual 30k amount due to my parked surplus.
30/9/15 TO INTEREST Debit 4742.00 4742.00 Dr

Next month on the 15th I see my EMI debited right on schedule.
15/10/15 DEP TFR Credit 42xxx.00
04489 RACPC HYDERABAD
TRF FR <my savings account>

Except this time there was no interest debit as I had parked my surplus. So I assume the entire EMI must have gone towards principal.
15/10/15 LIM 000042xxxxx9 = 00

The lower interest debits due to my parked surplus funds makes sense. The EMI getting debited right on schedule every month makes sense too. But what happened to the principal? Shouldn't the entire EMI have reduced my principal further during the many months I had parked my surplus funds? What am I missing?
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Old 21st November 2016, 14:34   #170
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Default Re: SBI Home Loan : How long it took ?

Quote:
Originally Posted by clevermax View Post
The plot shows a green line which is the actual interest I am paying every month, and the interest which I would have been liable to pay; if I was only paying the stipulated EMI every month.
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Originally Posted by StarrySky View Post
I am a big fan of the Maxgain HL facility.
Quote:
Originally Posted by hserus View Post
the principal component is substantially low in your EMI and most of the money goes towards servicing interest. So that is not quite as much of a surprise as it should be.
Quote:
Originally Posted by trishul View Post
Few months back I closed my SBI MaxGain home loan.
Quote:
Originally Posted by harishhm74 View Post
Note that the excess park funds reduce the amount of interest charged that month proportionally since the interest is charged on monthly outstanding (or if using daily reducing then the daily outstanding).
The saving in interest payout is the real gain here and not really the term of the loan or principal outstanding. This is how my car loan OD account is behaving as I have almost loaded up the entire outstanding barring a few thousands to keep the loan active. Harish
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Originally Posted by Holyghost View Post
I would like to understand further. Do the EMI reduce proportional the reduction of interest saved when we park funds in this OD?
Quote:
Originally Posted by Jaguar View Post
From what I understand, only the interest part of the EMI is deducted each month and the principal gets accumulated into the current account linked to the Max Gain HL. Therefore, when you pull out money from the current account, you are essentially taking money out from the principal.

Hello Gentlement
I am doing multi-quote to get your attention to this thread.

Can you Pls help me with the query below.

1. On Outstanding
In Feb 2014, I took 42L Loan with EMI of 45,XXX.
The interest was 35,XXX.

In May 2015, I deposited 6L surplus to the OD account.
The interest is now 26K and EMI is still 45,XXX.


Now, my OD account show 7,4X,XXX.
So, is there a way to figure out how much I will have to pay in order to close the loan?

Is it correct if I calculate it as 42L-7.4L = 34.6 L?

2. On Maxgain Suraksha Insurance
I was enticed/fleeced into getting Insurance and I end up paying 30K per year for the same- the loan was of 42L.
It is so costly than my other term insurance for 3Cr wherein i pay premium of only 34K.

I called up the SBI folks - and they said that the policy cannot be surrendered - and will be closed only when the home loan is closed!
Is this true? Can I not show that I already have 3Cr worth of Term Insurance already?

Thanks for your time!
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Old 21st November 2016, 16:30   #171
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Default Re: SBI Home Loan : How long it took ?

Quote:
Originally Posted by daretodream View Post
Now, my OD account show 7,4X,XXX.
So, is there a way to figure out how much I will have to pay in order to close the loan?

Is it correct if I calculate it as 42L-7.4L = 34.6 L?
You should see the current outstanding in the summary page. It does for my SBI car loan.
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Old 22nd November 2016, 12:49   #172
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Default Re: SBI Home Loan : How long it took ?

Quote:
1. On Outstanding
In Feb 2014, I took 42L Loan with EMI of 45,XXX.
The interest was 35,XXX.

In May 2015, I deposited 6L surplus to the OD account.
The interest is now 26K and EMI is still 45,XXX.


Now, my OD account show 7,4X,XXX.
So, is there a way to figure out how much I will have to pay in order to close the loan?

Is it correct if I calculate it as 42L-7.4L = 34.6 L?
You need to deduct the principal you have repaid through EMIs for the last two years as well. Moreover, if your HL is MaxGain you would have paid more in principal in your EMIs as the loan interest component would have reduced from parking additional funds in your OD account. Your bank loan income tax statements for the past financial years will include the principal amount you have repaid.

Quote:
2. On Maxgain Suraksha Insurance
I was enticed/fleeced into getting Insurance and I end up paying 30K per year for the same- the loan was of 42L.
It is so costly than my other term insurance for 3Cr wherein i pay premium of only 34K.

I called up the SBI folks - and they said that the policy cannot be surrendered - and will be closed only when the home loan is closed!
Is this true? Can I not show that I already have 3Cr worth of Term Insurance already?

Thanks for your time!
At the time of opening a home loan I provided proof of my existing term insurancy policy and managed to avoid taking insurance from them. See if you can show proof of alternate term insurance policy and surrender the one from SBI. Escalate and try to find out a way. But I would be surprised if the bank has such a hard rule that an alternate term insurance policy cannot cover for the home loan. If all else fails, please file a RTI to get them to respond in writing on their policies.

Recently I filed an RTI to get more details about my home loan from SBI through onlinerti.com which I feel is a fantastic resource to get reliable and concrete information in writing from all organizations under the purview of RTI Act. So you can ask the bank their rules and policies on switching to a difference insurance policy and also the total outstanding as on date in their records.

Last edited by trishul : 22nd November 2016 at 13:02.
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Old 1st January 2017, 23:03   #173
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Default Re: SBI Home Loan : How long it took ?

Today SBI interest rates for MCLR based loans were reduced to 8% for one year tenor. This is indeed a very good move.

But unfortunately for people like us who are stuck in Base rate formula, base rate interest is reduced by only 0.05% (9.3 to 9.25%). This is gross injustice.

Has anyone tried asking for shifting from Base rate to MCLR rates? How much does it costs?

Only last year, I paid 18000 rupees to reduce my interest from 10.5 to 9.5%.

This looks like a very lucrative earning stream for banks to switch interest rates for existing customers.

What other options do we have? I know SBI does not charge any fees for moving home loans in, from other banks. Does other banks also offer such a deal?

Considering my case, move to another bank without any processing fees and to interest rates of ~8% is very tempting. If SBI themselves give me this offer, nothing like that.

Fordday.

Last edited by fordday : 1st January 2017 at 23:05.
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Old 1st January 2017, 23:49   #174
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Originally Posted by fordday View Post
Has anyone tried asking for shifting from Base rate to MCLR rates? How much does it costs?
I have a sbi max gain account. It's unfortunate that the drop in intrest rates is not passed on to the existing customers with base rate linked loans.

I had checked switching from base rate to mclr and was told that I need to pay a switch fees of. 05 % of the current withdrawable limit. With the recent drop in the mclr it makes sense to switch.
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Old 2nd January 2017, 17:17   #175
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Default Re: SBI Home Loan : How long it took ?

Quote:
Originally Posted by fordday View Post
Today SBI interest rates for MCLR based loans were reduced to 8% for one year tenor.
I jumped the gun here.

Actual rate of interest offered for below 75L loan is 8.8%

8% is the MCLR
0.8% is the spread over and above it. Link
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Old 3rd January 2017, 04:48   #176
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Default Re: SBI Home Loan : How long it took ?

Even I am also a Maxgain customer since Oct-15 and currently paying 9.5% interest. If we need to switch to MCLR, we need to pay 0.58% of our drawing power (outstanding loan amount).

I think the current interest is 8.65 for women and 8.7% for others.

I have a doubt, is it unfair for banks not reducing the interest for old customers? Because when they disbursed the loans, the interest rates were decided based upon their cost of funding right?
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Old 19th January 2017, 16:22   #177
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Default Re: SBI Home Loan : How long it took ?

Bank of Baroda offer for HL seems too good.

They are giving at 8.35%, whereas I pay here 9.3%. Almost 100 basis points less.

No switching or processing fees.

Maxgain facility (they call it "Advantage").

I am seriously thinking of moving over to them.
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Old 19th January 2017, 16:26   #178
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Default Re: SBI Home Loan : How long it took ?

This is interesting. How good or bad or non-existent are their online services ? e.g. can I get my account statement online instantaneously ?


Edit:
8.35 % for what loan amount ?
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Old 19th January 2017, 17:09   #179
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Default Re: SBI Home Loan : How long it took ?

Quote:
Originally Posted by fordday View Post
Bank of Baroda offer for HL seems too good.

They are giving at 8.35%, whereas I pay here 9.3%. Almost 100 basis points less.
8.35 is for a particular amount of loan.

And your CIBIL rating should be more than 700. If I remember, it should be 760 and above.

More detailed research is required before switch
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Old 20th January 2017, 11:20   #180
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Originally Posted by lambuhere1 View Post
8.35 is for a particular amount of loan.

And your CIBIL rating should be more than 700. If I remember, it should be 760 and above.

More detailed research is required before switch
The below linked article has some details.

And the bank website says upto Rs 75L loan, this will be the ROI.

http://www.moneycontrol.com/news/rea...a_8306521.html
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