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My SBI Maxgain home loan is based on Base rate (with spread of 0.5), does it make sense to move to MCLR now and increase MCLR spread to 0.8?

My current interest rate is 9.3%, whereas if i transfer loan to MCLR base by paying ~27k processing fee, new rate will be 8.8%. This will save me approx 1450/- per month in EMI, i.e. will take approx 15-20 months to recover processing fee.

But i will be stuck with higher MCLR spread of 0.8, which means when MCLR rate increase in future, my interest rate will also rate higher. To reduce MCLR spread i might have to again pay same processing fee.

So instead of spending of 27k now, does it make sense to wait for one more year e.g. for SBI MCLR spread to come down and then switch loan type?

The unthinkable happened to me yesterday.

My EMI ECS debit got bounced because there were insufficient funds. In a 'momentary lapse of reason', I missed topping up my Citibank savings account and it fell short by 100 rupees when the EMI request came in.

Did anyone faced this before? What I did after that -

Topped up my citibank account in case the ECS request from SBI comes again.

Went to SBI branch and told them about the issue. The guy who deals with these said SBI will not run the request again. He advised me to transfer an exact amount as EMI to my HL account and write "EMI for Feb 2017" as transaction remarks in fund transfer.

Waiting for any other advice..

Thanks in advance.

It is as good advice as any. Ensure that the next EMI payment goes through and things should be ok.

In addition to the above, just follow it up with a letter to SBI (copy for your records) explaining what happened, what you did, and a brief timeline, so it doesn't come back to bite you later.

You're near the FY end, so get a loan certificate for FY16-17 in April and check that the missing EMI has been accounted for by your manual fund transfer. From experience, banks tend to be slightly sloppy (both to your benefit and theirs, so I don't see anything malicious here) so its good to ensure that your transfer has been correctly accounted for in their system.

Nothing to worry about, if you've otherwise been diligent in ensuring the earlier EMI ECS went through.

Can someone help to understand the process of transferring money from max gain to loan account. I want to do partial prepayment of loan from my max gain account.

I have a query with regard to SBI's Max Gain Loan. As the EMI remains constant, and interest charged is dependent upon principle outstanding minus deposit in MaxGain. Then how is the Principle being amortized? Is it the same as a traditional home loan or not, if not, then what happens to the difference between scheduled interest payment vs. actual interest paid?

The difference of Interest gets credited to your OD Account at the end of every month.

Can this additional amount be withdrawn? or my OD account withdrawal is limited to the amount directly deposited in the OD account.

Guys a quick question on Maxgain. I am about to take a HL and was pondering whether to go with Maxgain this time round rather than my trusted HDFC. I have two simple questions here for all you knowledgeable folks.

1. Does Maxgain bring in any real big difference (to make me consider this over HDFC) or is it more gimmick than any real advantage?

2. From the discussion in this thread I suddenly realized that the same Maxgain can be linked to either MCLR or the Base Rate. While taking the loan do I need to specifically ask for the option?


EDIT: They are also asking me to pay a processing fee of 11,500 rupees. Is this not kind of really high? In comparison HDFC has a ceiling of 3000 on the processing fee.

Interest is yours for the using.

1. An OD loan is nothing but having a loan account with a parallel Savings account that gives interest on a rate equal to the Home Loan Interest Rate. The Only difference between a regular Savings Account and this is that in the OD account the interest gets credited to the account at the end of every month.

2. All Loans are now based on MCLR. I don't think there is an option now to opt for Home Loan on Base Rate basis.

Not sure about the Processing Fee. Could be that SBI is charging for the Lawyer's search report too which HDFC will ask seperately.

No. For the legal and other charges they have two separate heads adding up to another 5500 rupees :p Only respite here is that the property is a very well known one and is approved by both SBI and HDFC. So there is no legal fee that needs to be paid for this one. So SBI is definitely looking pretty costly initially at least.

On a different note, does it still take months for SBI to approve a loan? I know HDFC will be very quick in my case and I will have the approval in 48 hours at most. The older posts in this thread seem to suggest even 6 months time horizon for SBI to approve a loan!
:eek:

Thanks!



In New Delhi, SBI is offering 8.35% for Loans up to 75 Lacs and 8.5% for loans above that.

For MaxGain Loans, an additional .15% is being charged.

Processing Fee is waived till June 30, 2017, however Legal & Technical fee is being charged at around 3.5K.

PS: I haven't been asked to buy life or property insurance.

Please check again. What I have been told is also what is there the SBI website. They give you 8.35% on two conditions only

1. Your ticket size is 30 Lakhs or lower
2. At least one of the applicant is a woman


If condition 2 is not met then the rate goes up by 0.05%. If loan is more than 30 Lakhs but less than 75 Lakhs then for women it is 8.5% and for loans above 75 lakhs the rate is 8.55%. For Maxgain they ask you to pay another 0.15% more (as you also noted).

As for the waiver on processing fee you need to be a Government employee else they charge you 0.35% of the loan amount plus the taxes. And they say no one has the power to waive that off or even reduce for you!

The Legal and Valuation fee is chargeable separately but in my case they said I may not need to pay that as the property is pre approved.

Now, the reason I asked about the efficacy of the Maxgain scheme is because a quick back of the envelope calculation suggests me that every year you pay 7500 rupees more in interest for a loan of Rs.50 Lakhs. So to gain any real benefit out of the Maxgain account you will need to permanently park at least 1.5 lakh rupees in your OD account for a 50 Lakhs loan. Just to recover the additional interest you will need around 89000 rupees to be parked through the year.

So yes... if I have a lot of free cash then it may be ok but otherwise I am not yet sure how it helps (if I have limited free cash I can think of N number of MF schemes or even other avenues that can generate similar or better returns)!

Latest SBI rate offered to me is 8.5% (with woman co-applicant) for a loan amount of 70 lakhs. If I opt for Maxgain the interest would go up by another 0.15%.

Maxgain can be added later anytime by paying 1000 rupees so I haven't opted for it yet.

I have been asked to get insurance on house but no other insurance product has been pushed. In fact the Branch Manager was frank enough to tell me that I shouldn't get insurance from them since it'd be costly.

There was a legal & evaluation fee of 6300/- and a couple other thousand once few formalities are done. It is the 2nd week now, will share an update once it is processed on how much total time it took.

As per my loan agent I can prepay the loan amount online whenever I wish to, however times needed.

Get the Maxgain now. I have been on maxgain for 10 yrs, the only issue I see with SBI, is that they are lethargic and lazy as a company/bank. While paying INR1000 anytime sounds good, getting the conversion might be a pain and require umpteen follow ups.

FYI, getting the annual repayment statement from SBI is a challenge, compared to other banks who send online statement every month/annually.