SBI Maxgain Home Loan: Frequently asked Questions (Updated in Jan 2018) Most home loan borrowers face the dilemma of whether to use their monthly savings to prepay their loan or to set it aside for emergencies. SBI’s Maxgain home loan allows you to park this amount in the home loan account and pull it out anytime you need to. The money kept in the home loan account reduces the total interest outgo on your home loan, helping you close the loan faster and save money. Several of our customers have had various doubts and queries regarding Maxgain home loan, so here are a few frequently asked questions by our customers, which will help you get a better understanding of Maxgain home loan:
1.Does SBI charge a higher interest rate on Maxgain loans?
Yes , at present SBI charges 5 basis point more on MaxGain loans. So, the normal term loan is available for 8.30% for women borrowers but Maxgain is available for 8.35%. For male borrowers, the same rates are 8.35% and 8.40% respectively. (As in Jan 2018)
2. Does SBI charge a higher processing fee for Max Gain?
At present, SBI is not charging processing fees on any of its home loan products (As in Jan 2018)
3. Is it important to open a savings bank account with SBI?
Yes its necessary to have a savings bank account with SBI to avail maxgain home loan. Without this loan is given in rare cases, involving huge loan amounts.
4. Is it mandatory to purchase property or life insurances while taking Maxgain loan?
Yes, it is advisable to have property insurance while taking a home loan. But it is not mandatory to purchase any insurances from sister concerns of SBI.
5. Is there any minimum amount that needs to be always parked in the over draft account?
No, there is no compulsion to park a certain amount at all times in your maxgain OD account.
6. My wife is a co-applicant and co-owner of the property. If I switch to SBI’s maxgain, will I be offered 8.35% instead of 8.40% (adhering to 0.05% rebate for women applicants)?
Yes! But for this your wife must be listed as the first owner in your property papers. (As in Jan 2018)
7. Can I claim income tax benefit for principal repayment with the surplus amount parked in Maxgain?
Unfortunately, Maxgain does not offer any tax benefit on the parked surplus amount in your OD account, since it is not an actual repayment of loan.
8. Can I enroll my MF SIPs in Maxgain?
Yes, you can. But make sure that there is surplus available balance else you’re ECS or SIP mandate will bounce.
9. If my loan amount is Rs. 30 lakhs and my parked surplus amount is also Rs. 30 lakhs, does it mean that my loan is closed & I can claim my property papers from SBI?
No, your loan is not closed as you have deposited the surplus amount on the OD account. This means that as long as both remain equal, you will not have to pay any EMI to the bank. However, since the bank’s ECS has been instructed to deduct a certain EMI from your account every month, the EMIs will continue to be deducted. These will then get deposited into your OD account. So technically the bank will not be charging any EMI. At this point if you want to close your loan, inform the SBI in written. They will adjust your parked surplus amount towards the outstanding loan amount and your loan will stand closed.
10. I have taken a Maxgain home loan for an under-construction property. Can I park surplus amount to save on interest outgo?
Yes, you can park your surplus funds, but since your property is in the ‘under-construction’ phase, you will not be able to withdraw your funds during this period. So park only that much surplus, you feel you‘ll not need even in an extreme emergency.
11. I have availed Maxgain home loan from SBI for purchase of a plot. Do I need to commence the construction within 2 years?
Under the Maxgain Home Loan scheme, you need to commence construction up-to/within 3 years of taking the loan.
12. Can I have a co applicant for applying to maxgain home loan? Does the co applicant need to be a co- buyer in the property?
You can have a co-applicant while applying for maxgain. It need not be a buyer but it must be a close relative.
13. Can I capitalize interest during the moratorium period in max gain i.e. take a complete payment holiday for 12 months and then start paying EMI; including interest for that period? I was told that this option is not available for max gain and is only applicable for normal term loan; is it so?
No, this option is available on maxgain home loans as well. On a new flat, you are allowed to take a payment break for a period of 18 months.
14. If I’m parking some money on monthly basis or in lump sum, will my loan term come down or EMI go down?
Neither your EMI nor your loan term will be reduced. By parking money in your maxgain account, you will reduce your interest outgo. The principal amount on which interest is payable is the difference of your total principal amount and money parked. so by parking savings in maxgain account you can save money on interest outgo every month.
16. What should I do to maximize the savings in Max Gain?
Here are a few tips to help you maximize your savings in Maxgain home loan;
Start using this account as the primary money parking account for all your liquid finances.
Route all your transactions through maxgain account (payment of utility bills, online shopping, credit card payments), If possible.
You can make use of net banking to schedule a transfer of the EMI amount to the saving bank account, a few days prior to the date of payment. So not only can you park your surplus funds, but also park the EMI payments in the OD account to maximize savings on interest.
You can also avail ATM card facility on the OD account or link it to an existing SBI savings account to avail the same.
However, any transaction made through a maxgain ATM card from another banks’ ATM will be charged a transaction fee, since it is an over draft account and not a savings account.
17. I am able to transfer money from my existing net banking enabled savings account to Maxgain account, but can’t do the reverse. Why?
This may be because net banking has not been enabled on your maxgain account yet. Once the final disbursement has been done, you can apply for transaction rights, until then you can only make deposits.
18. Can I pay for my utility bills, credit card payments, online shopping from Max Gain?
Yes, you can! Treat your maxgain account as your primary money parking account & route all your transactions through it. This will help bring down your interest outgo substantially.
19. I used my Maxgain account ATM card to withdraw cash from other bank’s ATM and I was charged a transaction fee for the first transaction in the month. Why?
According to RBI regulations, 5 transactions on another banks’ ATM are free only for savings bank accounts. This regulation doesn’t apply in this case as maxgain is an over draft account The reason is, as per RBI’s circular 5 transactions on other banks’ ATM are free only for SB account & in this case, you forget the point that your MG account is not SB account. it’s an overdraft account.
20. What is drawing power?
Drawing Power is your as on date actual outstanding Principal Amount.
21. What is available balance?
Available balance is the amount that you can withdraw from your Maxgain account any time you want.
22. Can I transfer my home loan to Maxgain home loan?
Yes, you can. Get in touch with your loan manager for the same and ask for the following documents;
Loan Account statement from day one.
List of Documents, which were submitted by you at the time of availing original loan. In day to day language of bankers, it’s called LOD.
Outstanding loan balance with applicable interest, penalty & any other fee to close the loan.
Are you interested in taking or switching to SBI Maxgain home loan? Sign up now for checking interest rates, eligibility, savings, costs, & our advisors will guide and execute the entire procedure, while you enjoy a hassle free experience.Our customer Mr. Shiddalingesh took SBI Maxgain and this is what he had to share “The entire loan transfer process has been smooth and well managed in terms of meeting on time, being very clear on the documents needed and the process to be followed.”
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