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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 29, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Jul 12, 2025Hindi

Hi! I'm a 2024 MBA passout and been ine year in job, my current inhand salary is 75,000rs. I have take education loan of 20lakh for MBA, which is now 23.2 lakh outstanding. I have monthly EMI of 28000 for next 12 years. I have an FD worth 2 lakh and stock investment of 2lakh. My mom said she can give me 2 lakh from her savings and i want to know from you, shall I increase my EMI amount and take help from family or I should keep it as it is. Thanks

Ans: You have started your career well. You are already earning Rs. 75,000 per month. That shows great effort after your MBA. Managing a large loan this early is not easy. But you are thinking wisely. That is a good sign.

Let’s plan everything carefully from all sides. We will look at EMI, savings, family help, and future growth.

? Understanding Your Current EMI Burden

– You are paying Rs. 28,000 per month in EMI.
– That’s about 37% of your in-hand salary.
– Anything above 40% can affect your lifestyle.
– So right now, you are just at the comfort limit.
– You also need to grow savings and meet future goals.
– If EMI stays the same, you will repay for 12 years.
– That’s a very long repayment period.
– Interest payout will also be very high over time.

? Assessing Your Monthly Surplus

– You didn’t mention your monthly expenses.
– Let's assume expenses are around Rs. 30,000.
– That leaves Rs. 17,000 per month as savings.
– Out of this, only Rs. 2,000 may remain after EMI.
– That is too tight.
– You must build emergency funds and start investing.
– If there’s any bonus or hike, that will help.
– For now, we need careful choices.

? Should You Increase EMI Using Mother’s Support?

– Your mother’s offer to help shows family strength.
– But you must use it smartly.
– Use Rs. 2 lakh to partly prepay your education loan.
– Don’t increase EMI unless your salary rises soon.
– If you increase EMI now, you lose flexibility.
– Instead, make a one-time prepayment.
– This will reduce interest and shorten tenure.
– You can keep the same EMI later or increase it yearly.
– This is a more balanced approach.

? Your Existing Savings and How to Use It

– You have Rs. 2 lakh in fixed deposit.
– You also have Rs. 2 lakh in stocks.
– That is a good start.
– But don’t rush to liquidate them for loan.
– Stocks can grow over long term.
– FD can act as emergency fund.
– For now, don’t use this money for loan prepayment.
– Keep FD as backup.
– Keep stock investment untouched unless emergency.

? Managing EMI Without Strain

– Keep EMI at Rs. 28,000 for now.
– Try to use extra income like bonus or gifts for prepayment.
– If your salary increases next year, raise EMI slightly.
– That way, you maintain cash flow and reduce debt.
– Even a small annual EMI hike can save big interest.
– But never over-stretch now.
– Financial stability is more important than early closure.

? Education Loan Prepayment Strategy

– Use your mother’s Rs. 2 lakh as lump sum payment.
– Don’t give it to bank as EMI increase.
– Always mention “Reduce Principal” during prepayment.
– You can reduce either EMI or tenure.
– Choose tenure reduction for long-term gain.
– This saves more interest.
– Later, plan small annual prepayments too.

? Future Financial Steps to Plan

– You must create an emergency fund of at least Rs. 1.5 lakh.
– Use FD partly and slowly add more to it.
– Keep 3 to 6 months expenses in this fund.
– Avoid using stocks or mutual funds for emergencies.
– After that, you can start a small SIP.
– Even Rs. 3,000 per month in mutual fund is good.
– Choose regular plan via Certified Financial Planner and MFD.
– Direct funds lack handholding and reviews.
– Regular plans offer guidance, fund switch help, and timely review.
– That support is critical for beginners.

? Avoiding Index Funds and Direct Plans

– Index funds only follow market passively.
– They don’t avoid risky sectors during bad times.
– You can lose more during market crashes.
– Actively managed funds are safer.
– A good fund manager handles risks smartly.
– Also, avoid direct plans.
– Direct plans are cheaper, but offer no support.
– If you invest via MFD and Certified Financial Planner, you get support.
– That helps with portfolio review and corrections.
– That’s a very valuable benefit for new investors.

? How to Deal With Loan Emotionally

– Education loan is not a burden.
– It is an investment in yourself.
– But don’t let it block your long-term goals.
– Balance debt repayment with wealth creation.
– Over time, you will earn more and pay faster.
– For now, control expenses, increase skills, and grow income.
– Don’t feel stressed by comparing with peers.
– Every plan must suit your own life.

? Role of Family Support

– It’s fine to accept small help from mother.
– But avoid regular dependency.
– Take support only for one-time use.
– Don’t increase EMI based on that.
– Use help to reduce principal.
– That shows maturity and planning.
– Your mother’s support is valuable.
– But building your own capability is more important.
– Appreciate her gesture but plan with independence in mind.

? Tax Benefits on Education Loan

– Continue claiming interest benefit under Section 80E.
– This is valid for 8 years from start of repayment.
– There is no limit on the amount.
– Only interest is allowed, not principal.
– So you save some tax also during initial years.
– Keep this benefit in mind during tax filing.

? Investing Mindset to Build Early

– Don’t wait for loan closure to start investing.
– You can invest and repay together.
– Start SIP with just Rs. 2,000 or Rs. 3,000.
– Slowly increase it every 6 months.
– SIPs help build future goals like marriage, home, etc.
– Loan is past expense. SIP is future security.
– Both must run side by side.
– Prioritise balance, not speed.

? Create a 5-Year Roadmap

– First, stabilise expenses and control EMI burden.
– Second, build emergency corpus of 3 months expenses.
– Third, start SIPs and increase yearly.
– Fourth, grow career and upgrade skills.
– Fifth, prepay loan partly every year with extra income.
– Sixth, avoid lifestyle inflation.
– Seventh, start a goal-based SIP later for home or car.

? Finally

– Your current EMI is manageable.
– Don’t increase it now.
– Use your mother’s Rs. 2 lakh to reduce principal.
– Focus on income growth and financial stability.
– Keep FD and stocks untouched for now.
– Begin small SIPs for wealth creation.
– Avoid index funds and direct funds.
– Choose regular mutual funds with Certified Financial Planner support.
– In 5 years, you can reduce the loan and grow investments.
– You are young and well-qualified.
– With right steps, you can create financial freedom.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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