SBI maxgain home loan account is an overdraft facility enabled home loan account from State bank of India (SBI).
Maxgain is a very popular home loan saver product and a very successful indeed for SBI. This account has overdraft facility, which actually makes this product very popular among home loan seekers.
What is over draft facility?
In simple terms, this is a kind of home loan account in which if you deposit some interim amount it will consider that amount as a home loan pre-payment. And accordingly the EMI will be re-calculated.
But if you need some amount in future, you can take that amount from this account and your loan due will increase. Accordingly EMI will be increase.
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So, one has the option to deposit money and again withdraw money whenever liquidity require. This feature makes SBI maxgain home loan account very popular among all loan products.
In this article, I will share few case studies and explain how one can save more money with SBI maxgain home loan account.
Save more with SBI Maxgain Home Loan Account
Case 1: Manoj is working as a software professional, and recently got a good promotion. So he decided to put that extra amount aside and utilize that by repaying the home loan he took 2 years back. But when he approached the bank, the said “Sir, you can only repay 4 times a year. As you have already consumed your limit you can’t repay further”.
How SBI Maxgain home loan account can save your life here?
Majority of banks provide home loan with a max 4 times / year pre-payment or part-payment options. If you are in a profession or business where you can expect some regular surplus in 1-2 months and you want to utilize that money by repaying home loan, you can’t do that. But with SBI Maxgain home loan account overdraft facility, one can simply transfer the surplus money to that account similar to balance transfer.
Tips: Try to close your entire savings account and keep only one SBI Maxgain home loan for all your cash deposits. This will help you to manage you cash as well as reduce your home loan interest burden.
Case 2: Manoj want to buy a car after 2 years. And for that he is saving money to by creating a recurring deposit. After 2 year he will utilize this money as down payment to take a car loan. He is also planning to take a personal loan for his sister’s marriage by next 1 year.
Don’t worry Manoj, SBI Maxgain home loan account is the perfect alternative of a personal loan or a car loan.
If Manoj could have SBI maxgain home loan, he could deposit all his cash or savings amount in that account itself. After 1 year whenever he need cash flow for his sister’s marriage he could easily withdraw that money. In fact he can utilize the SBI maxgain home loan ATM card for the same. So, he could easily avoid the high interest rates of a car loan or personal loan by withdrawing money from the Maxgain account.
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Case 3: If Mr. Manoj would have taken SBI maxgain home loan account, then he could save more income tax for above case. How can Mr. Manoj save more income tax with Maxgain account? Let’s find out that also.
Let’s say right now Mr. Manoj is not able to consume his entire home loan interest income tax exemption limit of 2 lakh per year. E.g. he is claiming only Rs 1 lakh of interest as he has re-paid enough balance toward home loan principle. For your information one can claim max 2 lakh under section for this.
But, if 2nd case happens in Mr. Manoj’s life, then his home loan EMI will increase. That means he has to pay more interest from next month onward.
So, here is the scope for him to increase the home loan interest rate exemption amount and save more money on income tax.
Is SBI maxgain home loan account so beneficial?
Yes, SBI maxgain home loan account is an awesome product. But it has few disadvantages also which may not be able to overtake the benefits.
How is your experience so far with SBI maxgain home loan account?
Did you try to transfer your existing home loan to SBI? How is the experience?
I have approached SBI while applying for home loan for the first time. I didn’t find them as per my expectation. The procedure was not that user friendly according to me. So, I have opted out another bank and got the loan in 1 week time.