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I.e., the interest clock starts ticking as soon as the amount is withdrawn instead of waiting until the payment due date. The interest rate on overdraft account is typically lower than credit card. Most home loan borrowers face the dilemma of whether to use their monthly savings to prepay their loan or set it aside for emergencies. In most cases, the extra money just sits in their savings accounts earning below par interest. A home saver loan lets you have the cake and eat it too. The money thus kept in the home loan account reduces the total interest outgo on your home loan and helps you close your loan faster.
Now, less of your interest portion goes towards Available Balance. Interest is calculated on the outstanding principal loan amount . We will focus exclusively on SBI MaxGain in this article. Other home saver loans listed above are quite similar and may differ in minor details. Before we delve deeper into SBI MaxGain, let’s understand what is an overdraft account. MaxGain is a popular home saver loan product from SBI.
Tax deduction
Lastly, you will have to input the rate of interest that the SBI Bank is offering you for the home loan. You will have to enter the principal amount that you want as a home loan from The State Bank of India.
The tool is also helpful when you want to compare different tenures and amounts to find what is the most suitable combination for you. You can also identify if it is the right time to take this loan and if you are availing of the right scheme from the bank. You will then have to enter the tenure of the loan that you want to borrow from the bank. The tenure of a home loan can range up to a period of 30 years. Poornima H N is a Certified Financial Planner living in Bengaluru, Karnataka. Being an avid reader, she has done her post-graduation in English Literature from KSOU, Mysuru.
Home Loan EMI Calculator Amortization Schedule (Free Excel Download
Surplus amount deposited in the OD account and accrued interest savings do not alter the principal portion of the EMI. You can see the bulk of the EMI payments during the initial years goes towards interest payment. If you have a home loan, just ask your lender for the home loan amortization table. It will indicate exactly your outstanding home loan amount at any point in time. Or you can easily get a quick idea of the same using online loan amortization table calculators. All surplus money parked in the home loan account goes towards Available Balance.
So that was how you can use the Home Loan EMI calculator India to calculate the EMI on your home loan. You can easily use this loan EMI calculator excel sheet download to calculate your home loan EMIs and create a loan amortization schedule. To make it easy for you, here is a free excel based Home Loan EMI Calculator that also shows you the loan amortization schedule. You can use the home loan account to do funds transfer (NEFT, RTGS etc.) and bill payments using cheque book and net banking facility.
How does monthly payment work?
Even if the surplus amount is kept only for a few days during the month, it helps reduce the interest component of the EMI for that month. Since the interest is calculated on the Book Balance instead of outstanding principal, any excess amount (i.e., EMI – Principal – Interest) is added to the Available Balance. SBI MaxGain is a home loan that is sanctioned as an OD with a limit that is equal to the approved loan amount. Your home acts as the underlying security for the OD account. This product has the same interest rate as the other home loans from SBI upto Rs. 1 crore .
The Maxgain Home loan by SBI will let the customer earn an optimal yield on savings by reducing the interest burden on Home Loans with a reducing interest rate. Experts recommend this product over other investment products including tax free bonds and FD. However, more of your interest portion goes towards Available Balance. Principal is applied on the EMI payment date itself whereas Interest is debited at the end of the month. Until then, the entire interest portion is shown as part of the Available Balance. Principal and Interest components are applied on the EMI payment date itself.
SBI Maxgain Home Loan EMI Calculator
So you should understand how to calculate EMI on home loan correctly even if you have to use a loan EMI calculator in excel or otherwise. It helps the customer to use a temporary surplus of money to reduce the interest payable on the home loan. Like any other home loan, even the SBI Maxgain Home loan will be repaid through a monthly EMI or equated monthly installment.
Any amount that you deposit to Maxgain will not be treated as “pre-payment” under Section 80C. Hence, that amount does not qualify for Section 80C rebate. Experts advice that you should only park amount over and above the tax deductible interest portion. Interest saved is not tax deductible under Section 24.
In your example, against Rs. only Rs. interest is being deducted so this 5000 Rs. figure is available as surplus into your OD acct. But due to some issues in the insurance policy dispatch i had to cancel my insurance policy.As a result on 15 May 2012 Rs 12,343 was credited back to my account. He works with small investors as well as HNI clients across India. If the interest rates are hiked and the lender passes on the hike to borrowers, then your home loan rate will increase. The calculator will also give you the EMI principal and interest calculator breakup in excel.
Note that you will be realizing this rate even if you park your funds temporarily unlike FD where you will pay a penalty for premature withdrawal. On top of that the savings with MaxGain are tax free. Principal and Interest components are calculated as per the original amortization table.
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