SBI Loan Re-Payment or Pre-payment using SBI Internet Banking through NEFT transfer
This tutorial will guide you how you can repay your SBI loan online easily with Internet Banking through online NEFT Transfer. This is currently applicable only if you have an Online SBI Account.
Paying SBI Loan Online with Online SBI
Imagine a situation when you are somewhere outside of your hometown. Or Else you are busy somewhere at someplace due to work, for which you aren’t able to go to the branch every time to pay your EMI; in case if you have missed it or you want to pre-pay some amount.
We live in a busy world, it’s not always possible to visit your bank branch to carry out transactions ; or even just to get any information.
Currently, India is slowly moving towards digitization, and gradually even our banks have started to make banking digitalized.
So if you are experiencing such scenario from above, thankfully SBI has provided its loan borrowers with a facility; to pay EMI if you have missed it or if you want to pre-pay some amount.
There’s a method other than auto debit from salary or manual payment, which can be just carried out with ease with SBI’s Internet Banking Facility: OnlineSBI.com.
The method is pre-paying the loan by adding your LOAN account as third-party account and then doing a normal NEFT transfer.
In short, you will be linking your loan account to your saving’s bank account. Then, you can use NEFT through internet banking for paying loan amount conveniently anytime, anywhere.
Step 1: Link your loan account to your SBI Bank account.
One big reason, why you should connect your loan account for prepaying your home loan or another kind of loans is because; at times we get some spare cash in our life through bonus or some other reason, but because prepayment needs some effort and physically going to bank takes away our excitement and all that money finds its way to some other expenses which could have been avoided.
This has been confirmed via official sources and even other SBI customers; that a LOAN account can be added to a third-party account in your online banking account and you can do a NEFT transfer to your loan account. This is a simple and powerful way of pre-paying your home loan or any other kind of loan because it’s at your fingertips and you don’t have to delay the decision of prepaying your loan just because of inconvenience caused by visiting the bank.
Steps of adding your Loan Account to your Online Banking account
1. Make sure you have internet banking enabled and the branch where you hold the loan account also accepts the online payments (mostly this is always true).
2. Just like you add a third-party account, in the same manner, add your loan account as third-party account so that you can make the NEFT payment later. Once the account gets added, you should be able to see it as one of the added accounts.
3. Once the account gets added, you can then make the payments to your loan account, it would be considered as your pre-payment.
Step 2. Now you can pay it via NEFT.
Some point on home loan prepayment
- Note that this home loan prepayment online through NEFT should be possible for all kind of loans, not the just home loan.
- Why only pre-payment, you can also pay your regular EMI’s using online options instead of post-dated cheques. So ask your bank to allow/enable this option.
- It might happen that this does not work in some banks. But we have seen 3 confirmations from different readers for 3 different banks, so mostly this should work on all the banks.
- If you have a bank account and loan account in the same bank, it should be a more easy process of just linking the accounts, ask your bank on this to guide you.
So If you have a home loan, you should definitely explore the idea of connecting your loan account with your bank account so that whenever you have some spare amount, you can quickly do home loan pre-payment the loan by a click of the button, otherwise, that “extra” cash can evaporate very soon. Are you going to do this?
Try it out and let us know in comments section if home loan prepayment worked for you through NEFT.
Other Updates, Queries, More Information-> Important
For SBI Home Loan Maxigain Customers:
Even if you pay to your Home loan account as NEFT it will park your money in MaxiGain Account(loan account) because MaxiGain Loan account is OverDraft account, payment .hence it will deposit in your account but not payment.You can see your principal amount will be reduced by your payment but you can not claim this amount in 80C of income tax as this amount will be treated as Parked amount but not pre-part payment.
Hope this will help with other maxigain holders.
there is a Minimum amount one can Pay as Pre-Payment for a Home loan or another loan? Will Bank accept if I just Pay Rs.100 Today?
Answer: Most of the banks put a limit of 3X of your EMI as the minimum prepayment. Check with your bank if other than SBI.
There are two situation occurs when you pre-pay some amount towards EMI.
1) Bank will not deduct EMI or will deduct lower EMI considering your pre-payment as a part EMI (Default option)
2) Bank will deduct EMI irrespective of the amount you paid as an extra payment. (You have to instruct bank to do this)
- Scenario – 1If you are doing some extra payment other than EMI then SBI by default won’t deduct the EMI. This has happened to one of my friends where he paid 50% of the loan amount as a prepayment and now the bank is not deducting any EMI from his account from last 4 years (But accumulating the interest in loan account).In my opinion, this is a bad option. Because this option actually does not help you to shorten the duration.You have to explicitly ask SBI to deduct your EMI through ECS irrespective of your pre-payment.
- Scenario – 2This is what I am doing with my SBI Home Loan. I am paying a little amount to say 3000 to 5000 per month over and above the EMI and it is not in multiple of my EMI. I am transferring this amount through NEFT. It goes towards principal and I can check it online in my loan account.
Now here we may have a doubt. Whether the amount I am paying extra every month goes to principal and actually helping me to reduce my tenure?The answer is YES.The amount which I am paying extra is getting reflected in the loan statement which bank is giving at the end of the fiscal year. There I can see my ‘extra’ amount paid in ‘Principal amount repaid’. So it is confirmedPS: I have never informed SBI about my extra payment every month. I just informed them to deduct my EMI irrespective of my extra payment.Hope this may help someone to reduce his/her home loan duration.
If you have any queries on the steps or in this tutorial, just ask us in the comments below.