SBI – Home Loan : Myth vs Realities

POSTED BY CL RAO ON May 25, 2012 6:01 pm COMMENTS (41)


I am a first time Home Loan taker & have been scouting around for Home Loan across different Banks, I read about SBI-Maxgain in this forum & came to know about so many benefits about it (Read : http://localhost/jagoforum2/how-to-maximize-the-gains-in-sbi-maxgain-homeloan-account/2635/ for the SBI Max Gain benefits) & decided to go for it but there is so less clarity about it @ different SBI Branches due to low Awareness that at times is highly misleading

As suggested by manish starting a thread aimed at sharing the Facts about SBI Loan Process , it will surely help novices like us

To start with :

Q1 Is a Guarantor mandatory in SBI Home Loans ?

Q2 People who have availed SBI Max Gain, have they been asked for Guarantor ?

All Questions, Replies, advices & most importantly Experiences (Good or Bad) related to SBI Home Loans are welcomed

Request you All to share their bit & Help everyone out !



41 replies on this article “SBI – Home Loan : Myth vs Realities”

  1. Amit says:

    I have applied for SBI Home loan before 15 days. I have received SMS on same day when I submitted my all the documents. I don’t see any verification process done from SBI till the time. Does SBI not do verification by sending some people to our home?

    One of my friend who works in Aditya Birla Finance has taken my documents , cheque by saying false things(I am just taking it to save my job. I’ll not apply it etc.). I have told him that I want to get the home loan from SBI and I don’t want to apply from other institutions.

    I see in my CIBIL. there are two enquiries have been made by Adity Birla finance for Home loan. Will this make any effect on my SBI application?

    There is no score in my CIBIL report because I do not have any credit history.

    1. smiritisbi says:

      The Answer to above questions are:
      Q1 Is a Guarantor mandatory in SBI Home Loans ?
      ans. NO.

      Q2 People who have availed SBI Max Gain, have they been asked for Guarantor ?
      ans. NO.
      Max Gain is same as your savings account .It is opened with your home loan .

  2. Mani says:

    Really great info Ashal. Thanks!!!

  3. ashalanshu says:

    Dear Anil, from your reply, I think it’s a legal and technical issue and I can not help you in this.



  4. anilshukla says:

    Thanks Ashal for you reply.

    But do this route Work? I had ask this question to them and they are saying that the branch who have sanctioned loan to flats in this property have actually done mistake.

    SRA projects in Mumbai is completely regulated by SRA authorities. This type of project is audited at every stage of its development. If these documents are not authentic then why SRA body accepted it.

  5. ashalanshu says:

    Dear Anil, please file an RTI application for the same. Why loans were disbursed for others on the same set of papers and why not now for you?



  6. anilshukla says:


    I have bought a flat in the SRA project in Mumbai. Project has got all the required approvals from SRA for development and is now ready for possession. I had bought this flat directly from builder in 2009 and have registered it and have paid stamp duity. I want to transfer my loan from Axis bank taken for this flat to SBI bank since they are offering lower rate of interest. Also, SBI has already sanctioned loan in the same property for more than 50 flats.

    In my case SBI is refusing to approve loan citing that the Development agreement and power of attorney in favor of builder by the slum dwellers ( this is SRA project) are not registered but Notarized. This was done some time back in 2006 between builder and slum dwellers. Builder has acquired all the approvals from SRA on the basis of these documents for the construction of the property.

    I fail to understand, if notarized documents is not a legitimate authenticate document, then why other goverment body like SRA and BMC considered and accepted it at the first place. And if this has already been accepted by the autority for approval of the property construction, why SBI is refusing to consider these documents. SBI is saying that the document is not registered. and if so, why have they sancationed loans for athor flats in the same property.

    Please let me know what SBI is saying true and on this basis can they refused my loan application? What do you recommend in this case?

    Thanks and regards,


  7. Sunil Jain says:

    Thanks a lot Ashal, it is really helpful.

  8. Dear Sunil, If you are facing cashflow problem, please pay only Pre EMI & do not think of parking anything extra in max Gain account as you can not use the same in case of a need.

    Yes you can request SBI to start regular EMI s even before completion of Mortatorium period.

    NO, withdrawing from PF to bringdown your loan liability is not a good idea. In case of EPF, it’s farward compounding whereas for Loan it’s reverse compounding, Hence it makes sense to do not touch EPF amount.



  9. Sunil Jain says:

    Dear Ashal – I’ve question regarding optimization of Pre EMI on SBI Max Gain loan account. Due to liquidity issue, I opted for Pre EMI and am currently on 18 month moratorium period while the project is under construction. I would like to know 1) How can I make optimum use of Pre EMI period (reduce interest burden while do not squeeze on my liquidity) 2) Can I request SBI to convert Pre EMI to EMI at later stage (before completing moratorium period) 3) Is it a good idea to withdraw money from EPF account to bring down my loan liability?

    1. anirban8 says:

      Ashal this link is not working now.

      I have taken SBI MAXGAIN for my U/C property of which I am yet to get possession. Before taking H/L they told me I need to go for property insurance for a minimum of 10 years. Due to that I have to pay one time premium during possession of Rs.4260 as per my propery value. But yesterday without intimating me they deducted Rs. 11695 from my maxgain account when I am yet to get possession. I am feeling cheated here, Please help.

      1. ashalanshu says:

        Dear Anirban, for what purpose this amount has been deducted?



  10. ankit Gupta says:

    I recently switched to SBI. After 35 days, 30800 has been added in my loan outstanding amount stating- DEBIT ADJUSTMENT-HOUSE PROPERTY INSURANCE. Which I remember, I never availed and neither talked about. I checked other websites and as per my Flat cost (market value 45 Lacs + 5 Lacs Appliances cost), they are offering insurance in premium ranging from 4000 to 11000. So in any case Rs 30800 are not justified. I talked in SBI branch and they said it is mandatory to insure property.

    Now please advise what can I do?

    I am very much frustrated with this unprofessional behavior of SBI personnel. And after switching to SBI, I feel there is no benefit as I have already been charged more than (55000 + its interest).

  11. Satish Bagur says:

    I’ve been going through a home loan of Rs. 1+ crore with SBI. No doubt, SBI home loan lending rate is the cheapest compared other banks. However, what irked me was that the branch manager was forcing me to take SBI Life RiNn Raksha insurance. For me, it was costing 10% of the loan + every year 1% extra as interest for that insurance part. While it’s absolutely NOT MANDATORY to yield to any such insurance scheme, it’s purely SBI’s intent to push their products so they can meet their target/make more money/get better credit to the branch. It’s AGAINST IRDA regulations to impose any such insurance schemes on the customer. You can firmly decline such offers. While they also put you to fear that your loan application may be declined due to lack of insurance coverage, buying insurance has no bearing your loan approval. Pls. do not yield to this. The branch manager will be taken to task if he FORCES you to buy insurance, however he can only RECOMMEND you to take insurance coverage. You would rather buy Life Insurance from LIC for cheaper rate. If not RiNn Raksha, they will try to force and convince you to buy some other SBI Life Insurance.

  12. venkateshr says:

    Hi All,

    I too am planning to foreclose my existing loan with HDFC and go for the Max Gain scheme of SBI. However one of the biggest deterrents is the one time payment of property insurance which the home loan agent mentioned to be mandatory.

    I don’t understand as to why the consumer should pay for the building on behalf of the bank. Basically this insurance is for the bank and it should do it for itself and not charge us.

    Can any one kindly please guide if this property insurance can be made optional with SBI. (I had never taken any property insurance when taking the loan from HDFC).

    Awaiting your kind replies. Thanks.

  13. MG says:


    My application for home loan with SBI is under process. Currently the file is with the Lawyer. Legal opinion should be provided.

    I would like to know what will happen next once we get legal approval…may be in detailed steps.

    Also I have serious problem with the branch manager. She never provides me any information, over that she commented on me that I am the only pestering customer to her… Is it possible to change the Branch at this stage for my file?
    Till now all the processing was done at RACPC only and there was no problem. Now I am afraid that she may delay the process as it will be in the hands of SBI and myself after legal opinion. Please suggest me what I can do in this regard?

  14. George says:

    Yeah, I am also planning to get the Maxgain account transferred to the other branch. Will they do it ..? I want debit card, internet banking kit and cheque book for Maxgain account. Without that can we maximise the benefits of Maxgain..?

    1. Dear George, once the netbanking (specially the transactions rights) is enabled to your MG account, practically you do not need debit card or cheque book. Yes occasionally you may require a cheque or 2. For both these things, you contact the loan branch to activate netbanking as well as issue cheque book.



      1. Arvind says:

        Dear Ashal Jauhari

        Is it advisable to transfer HOME loan from HDFC to SBI ?
        As HDFC is charging 11.50% interest rate and they never reduce rate if RBI reduces it…
        Advise me as SBI is offering me 10% at the starting, they may increase it once i get existing customer …
        thank you !!!!!!!!!!!!

        1. Dear Arvind, if you can do the legwork for SBI, please opt SBI Max Gain. Within HDFC, you can reduce your existing loan rate to a new rate of 10.5 or 10.75% by paying a conversion fee.



          1. Aarti Sheth says:

            Hi Ashal,

            I have some queries for max gain HL. We have been sanctioned max gain loan of 27lacs for 20yrs with insurance from SBI.

            Till now we have taken only one cheque of Rs.12,74,000 from bank out of 27lacs, as till now only that much amount was asked by builder. Our ouiding is under construction and we have also started paying our EMI as soon as the loan was started i.e. from May 2012.

            Meanwhile we were able to arrange some money so thought of paying home loan back. I asked branch Home loan manager about the same and she at taht tiem she said its fine to repay as there is no penalty for repayment of loan now.

            So we repayed almost 7 lacs of loan except emi out of Rs. 12,74,000 which we took till date. For repayment we did put money in our savings a/c through which our emi goes loan and then transfered that money from that a/c to loan a/c through netbanking.

            Now when I asked same home loan manager lady yesterday she said you are not supposed to repay your loan for maxgain untill you have your all disbursements (????). This will cause lot of calculation for RACPC and might be some penalty. I am really confused.

            As When I check my home loan account Online it does so correct outstanding for me after deducting all my repayments and EMI i.e. 343000 as of today.

            So request you to pls clear the things for me. Will there be penalty and if yes how much? also can I still go ahead continue putting money in my maxgain account to reduce my outstanding?
            I also heard I will be able to withdraw money from max gain a/c whatever I have paid except EMI, in my case 7lacs. Is that correct??

  15. George says:

    Hi Ashal,

    I was in the process of streamlining SBI Maxgain Homeloan and SB Account. Unfortunately a small problem cropped up. The problem is I already have a PPF account and SB account with a branch near my home. The homeloan is processed and sanctioned by another branch. When I contacted them to issue cheque book, debit card and internet banking kit, they said the request can not be taken as all accounts are in same CIF and the branch (from which homeloan was processed) can not take request. So they suggested to change the SB account and PPF to them.

    Have you came accross similar situations..? I would prefer to continue with SB and PPF account with current branch as it is near my home. What are all could be probable options..?

    1. Dear George, Instead of transferring SB & PPF to to loan branch, please transfer MG account to SB branch. By the way, if you just want to get cheque book, please ask loan branch to issue one. Actually the request ‘ll be done online by Loan branch & you’ll get the customised cheque book door delivered.



  16. suparnakdas says:

    hi ashal,
    i am planning to take sbi home loan. but the bank and racpc both are saying life insurance is a must or you need to have guarantor. the project is approved by sbi lawyer (one of sbi panel’s member). my loan emi will be around 30-32% of nmi. my queries are
    1. is it compulsory to take personal insurance. if not any document saying the same.
    2. property insurance is also compulsory they said. and i am agreed to it. whether this is also required?
    waiting for your reply

  17. vishal says:

    Thanx for your answer

    I have applied for sbi maxgain home loan through home loan team in mumbai instead of going to my home branch because bank officials are not much interested in sanctioning of home loan.home loan team leader said,i have to park my home loan account in other branch because it is not in his work area.

    In my saving account,i am having office address & for home loan,i have given my residential address as they are not satisfied with office address.

    Now tell me is it possible to open home loan account in other sbi branch under the same CIF and how i can do this?


    1. Dear Vishal, In the loan application farm, there ‘ll be details for your existing relationship with SBI, please punch in the details of your existing SB account. this ‘ll help to get Max Gain account under common CIF. You may have SB & Max Gain account in different branches within same city. No issue.



      1. vishal says:

        Thank u Ashal for your valuable suggestion.some more questions for you please.

        I am planning to without personal insurance cover.what u think it will be helpful to buy insurance or not?

        have u taken insurance cover for you?should i go with sbi life rinn raksha policy or any other?

        i have not understood with this. because i read that,premium payment is only for 5 years not there after then how they will continue the policy.can u explain please.

        one time premium payment is good or adding it in to the home loan is helpful?

        if claim is not made till home loan closure,shall i get the money back, paid for insurance purpose?

        1. Dear Vishal, that Rinn Raksha Policy is a mortgage term cover where your sum assured ‘ll keep decreasing with every paid EMI. I w’d prefer a normal Term cover say SBI Life’s Smart Shield for your over all Term cover requirement including that home loan.

          A yly prem. option is better than a single prem. If you opt to pay in a single prem. & get it added into your home loan, you w’d have to pay interest on this single prem. Are you ready for that?

          No as it’s term cover, no maturity amount is there?



          1. shylajaR says:

            Dear Ashal,

            I had gone through the thread, you had given many useful information here, when it comes to insurance, just wondering do we really need one for purchase of site? It is required for housing loan (it covers natural calamity in addition to personnel insurance), especially when we are looking for 2 to 3 year loan.



          2. Dear Shailja, the term cover for your life is beneficial but the general insurance for the plot/piece of land from natural calamities, I’m unable to digest. Yes if it’s a under developing mode – building, there should be a cover for the building but not for the land itself as nothing is going to happen that piece of land.



  18. vishal says:

    sir i have following questions.
    1.i have applied for maxgain loan of 30 lakh today.i am having sbi saving account in mumbai but they said my maxgain account will be at other branch but in mumbai there any problem in future for fund transfers in these 2 accounts? it posssible to close maxgain account by prepayment before the tenure,or i have to continue it till the tenure completes? wife is not a co-borrower today as she is not earning now,but in future she will earn,so is it helpful to add my wife as a co-applicant and what are the pros & cons of doing so?

    1. Dear Vishal, Here are the answers for your queries –

      1. Make sure the Max Gain account is under the common CIF which you are having for your SB account. No matter if the 2 accounts are in different branch but CIF is same, you can save time & energy as well as money as due to single CIF, the netbanking ‘ll be common between these 2 accounts under a single user id & password of your existing SB account.

      Here CIF stands for Customer Information Folio.

      2. Yes, you have to write down a written request just like closing a normal home loan.

      3. The tax benefit for wife from home loan ‘ll be possible only if she is co-owner as well as co-borrower.



  19. dgomez says:

    Hi Ashal, can you pls. guide me. I took a sbi max gain in Y2008 at the interest rate of 13.25% p.a. now the interest rate has dropped. My outstanding is around 34 lacs. I want some idea to get the interest rate lowered at the same time i want to maintain the max gain since it gives me the flexibility of OD facility and sometimes this helps in case of emergency. Can you guide me urgently?

    1. Dear dgomez, please contact the SBI branch from where you are maintaining your Max Gain account. Ask for rate reduction & linking of the same with Base Rate instead of PLR (your current linking is with PLR). SBI as well as all other banks are offering rate reduction after a payment of nominal fee which is 0.5% of outstanding loan amount + service tax on it.

      So in your case this fee ‘ll be 17000 + Serv. Tax.

      Few days or may 3-4 weeks back, SBI advertised for this rate reduction offer all it’s existing customer.

      Even after rate reduction, the Max Gain facility ‘ll remain intact. No reason to worry.



  20. Dear CL Rao, I have availed Max Gain for myself & many of my colleagues have also availed the same. I’m trying to answer your queries –

    1. if the husband & wife are co-borrower OR the EMI to NMI (Net Mly Income) ratio is below 30% i.e. EMI is less than 30% of the NMI, the guarantor is not required at all. Even in case of 40 or 45% EMI to NMI, the SBI RACPC may relax this guarantor thing.

    2. In all the cases for me & friends, no guarantor was asked by SBI people.

    Please feel free to post more & more of your queries for SBI Max Gain Home Loan, I ‘ll try to answer each of those.



    1. sahaj says:

      Hi Ashal,

      I am also planning to take a HL with SBI and have a question.
      Many of my friends told me that to get SBI HL, one should know SBI Employee or might hv to bribe(may be a rare case) to get the processing done in quick time.
      Is this correct?
      How many days it took for you to process your application.
      I am in Hyderabad and planning to take HL of 10L for 10years to construct a home here.

      Thanks & Regards,

      1. Dear Sahaj, not a single penny was paid by me or my other friends who have taken SBI’s Max Gain home loan. As you want to construct a property on your existing plot, please visit any nearest SBI branch & asked for the document list to be arranged for your case. Once this doc list is with you (It includes your financial as well as property related docs), arrange all the papers & put up the file to the SBI branch of your choice.

        If all the papers are in order, the loan can be sanctioned in 10-15 days by the RACPC staff. I do have my personal experience with me of SBI for such fast work as well as on the other hand for a snail’s pace of taking 6-7 months. But basically it all depends on the required papers in the file.



        1. sahaj says:

          Thanks a lot for the quick reply Ashal.


      2. SRINIVAS TATINA says:

        Hi Sahaj!
        You need not offer any bribe to any one for SBI Maxgain Loan.
        There may be an isolated case of someone looking for bribe, but it is very fair processing.
        We are going to live in that property for decades. Let the banker take little more time and do their homework to check if the property is free from all angles.
        No doubt, SBI takes little more time in processing the Loan.
        But later, they will never bother you. They do not put any hidden charges.
        They tell whatever is true. In SBI, they are not agents. They are permanent employees. They do not have any targets to achieve. So there is no chance of misselling the product.
        Since you are in Hyderabad, you better approach SBI Kondapur (Opp: Botanical Gardens, near Kothaguda). Since this branch is located in IT area,it mostly deals with housing loans for IT employees. You visit the branch once and all your doubts on Maxgain are clarified.
        There is no matching product in the market, which can compete with MAXGAIN.

    2. astrosunil says:

      Hello Ahsal,
      Thanks for all your replies on home loans, this helped me greatly.
      Does State bank of Hyderabad also has Max gain home loan option ? Will it be same as SBI ? I am also stuck in not finding a guarantor, will check with SBH manager weather he can ignore the gurantor criteria if EMI is less.


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