SBI Max Gain Home Loan is a unique loan facility offered by the State Bank of India (SBI) to its home loan customers. This facility is essentially an overdraft account that is linked to the borrower’s home loan account. It allows the borrower to deposit any surplus funds they have into the overdraft account, which reduces the outstanding principal of the home loan and thereby reduces the interest burden on the borrower.
The borrower can withdraw the surplus funds from the overdraft account whenever needed, just like a regular overdraft account. The interest is charged only on the net amount outstanding, which is the difference between the sanctioned loan amount and the amount in the overdraft account.
For example, if a borrower takes a home loan of Rs. 50 lakhs and has a surplus fund of Rs. 5 lakhs in the overdraft account, the interest will be calculated only on the outstanding balance of Rs. 45 lakhs. This results in a significant reduction in the interest burden for the borrower.
SBI Max Gain Home Loan facility also provides the flexibility of pre-payment without any penalty charges. The borrower can use the surplus funds in the overdraft account to make prepayments on their home loan, which further reduces the outstanding principal and the interest burden.
Overall, SBI Max Gain Home Loan is a useful facility for borrowers who have surplus funds that they want to use to reduce their home loan interest burden while maintaining the flexibility of accessing those funds whenever needed.