I have 36L in mutual fund SIP with 38%xirr, 10L in equity, recently have taken loan of 40L with 9.5%int. to purchase property I need advice should I sell mutual funds/equity and repay loans or should I continue with SIP

Ans: Consider comparing the interest rates on your loans with potential returns from your MF SIPs. If the MF returns consistently outperform loan interest rates after considering tax implications and risk, continuing SIPs may be beneficial for wealth creation. However, if loan interest rates significantly exceed potential MF returns, prioritizing loan repayment can lead to substantial interest savings over the long term. Assess your risk tolerance, financial goals, and liquidity needs before making a decision. Consulting with a financial advisor can provide personalized insights to optimize your financial strategy.

Ans: It sounds like you're making some big financial decisions, and it's great that you're considering your options carefully. Taking out a home loan while keeping your SIPs intact could be a strategic move. It allows you to maintain your investment momentum while also spreading out the cost of your home purchase over time.

However, withdrawing your SIP funds to reduce the home loan amount could also be a viable option. It would lower your debt burden and potentially save you on interest payments in the long run.

Before making a decision, consider factors like the interest rates on the home loan versus the potential returns on your SIP investments. Also, think about your long-term financial goals and how each option aligns with them.

Consulting with a financial advisor could provide valuable insight into the best course of action based on your specific circumstances and goals. With careful planning, you'll be on track to achieving your dream of homeownership while securing your financial future.

Ans: It's fantastic to see your proactive approach towards investing at such a young age! Let's dive into your investment strategy and explore some recommendations:
Investment Breakdown:
• You're investing 50,000 rupees per month through SIPs, with allocations across different mutual funds.
• Your current portfolio consists of Parag Parikh Flexicap, Quant Mid Cap, Aditya Birla PSU, and UTI Nifty 50 Index funds.
Amidst your journey, you're undoubtedly making commendable strides towards securing your financial future. However, let's explore some aspects to ensure you're on the right track:
Diversification:
• Diversification is key to mitigating risk and maximizing returns. Your current portfolio seems well-diversified across different market segments, including flexicap, mid-cap, PSU, and index funds. This approach offers exposure to various sectors and can potentially enhance long-term growth prospects.
Active vs. Passive Investing:
• You've chosen actively managed funds, which offer the benefit of professional fund management and the potential for outperformance. While index funds like UTI Nifty 50 Index provide low-cost exposure to market indices, they may lack the potential for alpha generation compared to actively managed funds. Active management allows fund managers to capitalize on market opportunities and adapt to changing market conditions, potentially leading to superior returns over time.
Future Goals:
• Your goal of accumulating a corpus to purchase property aligns with your long-term financial objectives. As you progress towards this milestone, continue to prioritize disciplined saving and prudent investment decisions. Consider revisiting your asset allocation and investment strategy periodically to ensure they remain aligned with your evolving goals and risk tolerance.
Recommendations:
• Given your goal of purchasing property in the near future, maintaining a balanced approach to investing is essential. Consider continuing with your current SIP allocations, as they offer diversification and potential for growth. However, if you're considering adjustments, consult with a Certified Financial Planner (CFP) who can provide personalized guidance tailored to your specific financial situation and goals.
• When it comes to purchasing property, start researching potential locations, property types, and financing options. Additionally, continue saving diligently towards your down payment and associated expenses to achieve your homeownership goal.
Remember, investing is a journey, and it's essential to stay focused on your objectives while adapting to changing circumstances. With your proactive mindset and commitment to financial growth, you're well-positioned to achieve your aspirations. Keep up the excellent work, and don't hesitate to seek professional advice whenever needed. Your dedication to financial literacy and planning will undoubtedly pave the way for a brighter financial future!

Ans: Hello;

It is fiscally prudent to close existing loans first.

Yes selling real estate property to close the outstanding loans is better option.

Best wishes;
X: @mars_invest

Ans: You are 37 years old, earning Rs 3 lakh monthly, and have an existing mutual fund corpus of Rs 80 lakh. You’re investing Rs 1.25 lakh monthly through SIPs. You’ve maintained a 70:30 equity-to-debt allocation and have a small home loan of Rs 6.5 lakh at 8.7% interest. You're also invested 50:50 in active and passive mutual funds.

Let’s evaluate your situation from a 360-degree perspective through the lens of a Certified Financial Planner.

? Current Financial Position Assessment

– You have a strong monthly income of Rs 3 lakh.
– You’re investing over 40% of income monthly. That’s highly disciplined.
– You’ve built an Rs 80 lakh corpus already, which is solid.
– Your portfolio has a decent 70:30 equity–debt split.
– The home loan left is only Rs 6.5 lakh. It’s small compared to your assets.
– Loan EMI may be around Rs 13,000–14,000 per month.
– You’re paying 8.7% interest on this home loan.
– You’ve not mentioned any children or major upcoming obligations.

From this base, we can plan the next steps.

? Should You Close the Home Loan Now?

– Your loan is small compared to your mutual fund corpus.
– If you withdraw funds now, tax may apply depending on holding period.
– Long-term equity mutual fund gains above Rs 1.25 lakh are taxed at 12.5%.
– Short-term equity fund gains are taxed at 20%.
– Debt fund gains are taxed as per your income slab.
– You may lose compounding benefits on those funds if withdrawn now.
– Interest on your home loan is fixed and moderately high.
– But your mutual fund returns may beat 8.7% over 7–10 years.
– If your investments are long-term, returns can be 11–13% in equity.
– Therefore, clearing the loan from investments is not optimal.

It’s better to keep the loan and continue SIPs.

? But When Should You Consider Prepaying?

– If you have excess cash flow beyond your SIPs.
– If you're nearing retirement or want to reduce liabilities early.
– If you become uncomfortable with EMI despite surplus funds.
– If your SIPs are enough for all long-term goals and surplus remains.
– Then consider partial prepayment to reduce tenure.

Don’t break existing mutual fund investments for prepayment.

? Benefits of Keeping Home Loan Alive

– You’re getting tax benefits under Section 24 on interest paid.
– You’re also eligible for principal repayment benefits under Section 80C.
– Tax savings reduce effective interest cost.
– Liquidity is preserved, which allows investment compounding.
– Having a small manageable loan also helps credit score.

You should continue the loan unless there’s emotional pressure to close it.

? Evaluating the Asset Allocation

– Your equity to debt ratio is 70:30. That suits your age and goals.
– At 37, this is appropriate for growth with moderate stability.
– Equity gives compounding. Debt gives cushion during market fall.
– Continue this ratio for the next 8–10 years.
– Slowly shift to 60:40 by the time you reach 45.
– That helps reduce volatility as retirement nears.
– Review your asset allocation once a year.
– You can adjust depending on goals and market conditions.

Stay disciplined with this mix unless risk appetite changes.

? Active vs Passive Fund Split

– You’ve split funds 50:50 between active and passive.
– Passive funds (index funds/ETFs) have low cost but limited flexibility.
– They don’t beat the index. They just copy it.
– During sideways markets, they give average returns.
– Actively managed funds offer better risk-adjusted returns with expert selection.
– Good fund managers can outperform benchmarks with tactical changes.
– Passive funds also have sector bias due to index weight.
– That can be risky during sector-specific down cycles.
– For long-term wealth building, active funds offer more agility and value.

You should reduce passive exposure to 30–35% only.

? Are You Using Direct or Regular Funds?

– You didn’t mention the mode of investing: direct or regular.
– If you are using direct funds, reconsider your approach.
– Direct funds may have lower expense ratios.
– But they don’t offer ongoing advice, goal mapping, or behavioural support.
– Without Certified Financial Planner guidance, you may react wrongly to volatility.
– Regular plans through CFP/MFD offer constant tracking and rebalancing.
– They also give emotional comfort in market ups and downs.
– For major life goals like retirement and child’s education, this support is crucial.

Shift to regular plans with a Certified Financial Planner if in direct mode.

? Is Your Monthly SIP Optimal?

– You are doing Rs 1.25 lakh SIP per month.
– That’s over 40% of your income. It’s excellent.
– This can create Rs 4–5 crore in 12–15 years with compounding.
– You should increase SIPs by 10–15% every year.
– As income grows, scaling SIPs is important.
– Use SIPs for specific goals like retirement, education, and major expenses.
– Each SIP should be mapped to a goal.
– This gives purpose and discipline to the investments.

Don’t stop or pause SIPs without a major financial need.

? What Else Should You Do Now?

– Create a goal plan for retirement, child education, and large life events.
– Assign target years and amounts to each goal.
– Map your existing SIPs and lump sum investments to each goal.
– Start SWP-based planning for retirement income after age 50–55.
– Keep an emergency fund of at least 6 months' expenses in liquid funds.
– Have term insurance and health insurance for family protection.
– Avoid putting large amounts in FDs or traditional plans.
– Don’t depend on real estate for retirement needs.
– Use it only as backup or asset diversification.

Let every rupee you earn or invest work for a goal.

? Risk Assessment and Behavioural Points

– Avoid emotional decisions based on interest rates alone.
– Don’t rush to close loan if investments are giving higher post-tax returns.
– Avoid booking equity fund gains prematurely just to feel “debt free.”
– This cuts the compounding journey in the middle.
– If unsure about current schemes, review with a Certified Financial Planner.
– Review all investments once every 6 months.
– Avoid switching funds too often based on market noise.

Stay invested and stay goal-focused.

? Best Practices for You from Here

– Keep Rs 6.5 lakh loan as it is for now.
– Don’t redeem mutual fund units to repay this.
– Maintain 70:30 equity-debt allocation for 3–5 more years.
– Reduce passive fund exposure to 30–35% over time.
– Increase active fund exposure for better returns.
– Ensure you invest in regular plans through MFD + CFP combination.
– Map every SIP to a financial goal.
– Increase SIP amount by 10–15% yearly.
– Build separate buckets for retirement, child’s education, and emergencies.
– Keep real estate out of retirement planning.
– Review insurance. Get term cover and good health policy.

This discipline will lead to long-term financial freedom.

? Finally

– You have a very strong foundation already.
– Your income, corpus, and SIP are well structured.
– Don’t break investment momentum for small loan closure.
– Let your assets grow while you comfortably repay the loan.
– Review your allocation, SIPs, and fund mix annually.
– Make active funds the focus of your equity investments.
– Use Certified Financial Planner guidance for portfolio direction.
– Keep emotions out and goals in front.
– That is the best way to build true wealth and peace.

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