Dear Sir, I am 40 years old. I have a home loan with an outstanding amount of 98 lakhs, an EMI of 1.32 lakhs, and a remaining tenure of 102 months. I also have a personal loan with an outstanding amount of 11.3 lakhs, an EMI of 65,000, and a remaining tenure of 19 months. My current salary is 6.5 lakhs per month. I have investments in stocks and mutual funds worth 66 lakhs, gold worth 9 lakhs, fixed deposits worth 10 lakhs, and a PPF account worth 8 lakhs. Please advise whether I should make a prepayment towards my loans or continue with my EMIs and allow my investments to grow.

Ans: YES

Ans: You have done a great thing by co-owning and sharing a loan. It takes planning and commitment. Paying a long-term loan early needs careful steps. A focused strategy will help you save interest and reduce stress.

Below is a complete 360-degree solution. This will help you close the loan faster and stay financially safe.

1. Understanding Your Current Loan Structure

You and your brother took a joint home loan of Rs. 59 lakhs.

Interest is 9.1% (floating). That’s quite high.

You both are paying Rs. 25,000 each, totalling Rs. 50,000 monthly.

The loan tenure is 21 years.

After 5 years, principal reduction is still very low.

This is because in early years, interest eats most of EMI.

Your method of saving Rs. 4,000 monthly to prepay annually is good in spirit.

But in action, it may not create much impact.

Let us explore a better plan.

2. Step-by-Step Review of the Issue

Your interest rate is 9.1%, which is high today.

Loan is 5 years old, so around 16 years are left.

You have already paid around Rs. 30 lakhs in EMIs.

Still, the loan principal hasn’t reduced much.

This means you are in the heavy-interest zone.

Time is the biggest cost here.

Faster principal reduction will save a lot of interest.

You can’t just depend on small yearly prepayment.

3. First Action – Review and Refinance the Loan

First, check your current loan outstanding.

Check your repayment schedule from bank or netbanking.

See how much of EMI is going to interest.

Now consider transferring the loan to a new bank.

Many banks now offer home loans around 8.3% to 8.6%.

A 0.5% difference may look small.

But it can save lakhs over remaining years.

You and your brother must compare 3–4 lenders.

If new bank is ready, shift to a lower rate.

No harm in reducing tenure while transferring.

Even 2–3 years cut in tenure saves a lot.

4. Revisit EMI and Tenure

You are paying Rs. 25,000 monthly.

This may be within your budget.

If yes, try to increase EMI by Rs. 2,000–Rs. 3,000 per head.

Higher EMI cuts principal faster.

Lower tenure means lesser interest burden.

Use the new EMI wisely by combining refinance and increased payment.

Avoid extending the loan tenure again.

If possible, reduce tenure instead of EMI.

5. Rethink the Annual Rs. 4,000 Saving Approach

Saving Rs. 4,000 monthly in joint account is okay.

But idle money doesn’t grow.

Interest in bank account is very low.

Instead, invest this Rs. 4,000 in a short-term debt mutual fund.

Use regular plan through MFD with CFP credential.

Direct plans may look cheaper but lack support and rebalancing.

With regular plan, you get better advice and ongoing help.

At year-end, redeem and prepay lump sum against principal.

Debt funds offer better growth than savings account.

Tax efficiency is also better if used wisely.

6. Create an Emergency Buffer Separately

Prepaying is good, but emergency safety is more important.

Before aggressive prepayment, build a safety fund.

Keep at least 3–6 months of EMI and expenses as emergency fund.

Use liquid mutual funds for this.

This protects your EMI even if job or cashflow is hit.

Avoid using your loan prepayment savings for emergencies.

Keep the two goals separate.

7. Avoid Prepayment from Retirement Corpus

Never touch EPF, PPF or long-term savings for loan prepayment.

That may create future income problems.

Let those assets grow for your retirement years.

Housing loan can be managed with better cashflow planning.

Prioritise steady investments over aggressive prepayment from retirement corpus.

8. Align Investments and Loan Closure Together

If you want to clear the loan faster, balance it with investment goals.

You can run SIPs and prepayment both side by side.

Divide monthly surplus into three:

Some for SIPs in active mutual funds.

Some for yearly lump sum prepayment.

Some for emergencies.

This keeps wealth creation, risk cover, and debt reduction in sync.

Don't stop SIPs completely just to prepay faster.

Mutual funds give long-term growth and liquidity.

9. Tax Benefit Assessment

Home loan offers tax deductions on interest and principal.

You both are eligible for 80C (principal) and 24(b) (interest) benefits.

Check if you are using full benefit.

But don’t keep loan just for tax saving.

Interest outgo is more than tax saved in most cases.

It is better to close loan early and then invest that EMI.

You get better peace of mind and cashflow freedom.

10. Use Bonuses and Extra Income Smartly

You may receive bonus, incentives, or yearly hikes.

Use a fixed portion of that money to prepay loan.

For example, 40% of bonus goes to loan, 40% to investments.

Remaining 20% for personal spending.

This method helps in faster loan closure.

But keeps your future goals also on track.

11. Communicate and Review as a Team

You and your brother are managing the loan together.

That’s a great responsibility and effort.

Keep monthly reviews and open communication.

Review the bank statement, interest paid, and outstanding.

Every prepayment reduces total interest burden.

Celebrate milestones like Rs. 5 lakh principal paid off.

It will keep both of you motivated and united.

12. Don’t Buy More Real Estate Now

Your existing home is already a big commitment.

Avoid investing in second property.

Real estate has poor liquidity and low regular returns.

Maintenance cost, property tax, and legal risk are high.

Don’t stretch finances with multiple loans.

Build wealth through financial assets instead.

13. Take a Certified Financial Planner’s Help Once a Year

Every year review your plan with a Certified Financial Planner.

Check how much principal is left.

Plan SIPs, investments, and prepayment in right proportion.

Review life and health insurance too.

A CFP helps you align your goals with numbers and strategies.

14. Insurance Protection Check

Ensure you and your brother both have term insurance.

This secures the loan liability.

If something happens to one person, the other isn’t burdened.

Term plan is low-cost and covers only risk.

Avoid policies that combine insurance and investments.

15. Track Your Progress Annually

Make a simple tracker in Excel or diary.

Note EMI paid, principal reduced, balance left.

Mark each prepayment.

It motivates and helps fine-tune future decisions.

Share the sheet with your brother too.

Finally

You both have made a good effort so far.

The first five years of a loan are toughest.

Now is the best time to take control.

Don’t let the high interest eat your future savings.

Use a mix of refinance, EMI increase, short-term fund, and lump sum payments.

Don’t compromise on long-term investments and insurance.

Keep your goals clear and emotions away from decisions.

Your loan can be closed 5–7 years early with these changes.

That will free up cash for future dreams and peace of mind.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: With a KCET rank of 17,000 (OBC-NCL), your son is unlikely to get CSE or ECE in top Bangalore colleges like RVCE, BMSCE, MSRIT, or PES University, as their cutoffs are much lower. However, he has good chances for CSE or ECE in colleges such as Dayananda Sagar College of Engineering, Acharya Institute of Technology, Reva University, Nitte Meenakshi Institute of Technology (if this college accepts KCET this year), and East Point College of Engineering and Technology. CSE is generally the better option for high-paying jobs in the IT/software sector, especially in Bangalore, while ECE offers diverse career paths in both electronics and IT. If your son prefers programming and software, CSE is recommended; if he’s interested in electronics and communications with flexibility to move into IT, ECE is also a solid choice. Both branches offer good prospects, but CSE typically has an edge in placements and salaries in Bengaluru. All the best for your son's admission and a bright future!

Follow RediffGURUS to Know more on 'Careers | Health | Money | Relationships'.

Ans: With a KCET rank of 15016 in the general merit category and a JEE Mains score of 78.9946, your daughter can consider a range of colleges for CSE, depending on her specific preferences and priorities. Colleges like RVCE, PES University, and BMS Engineering College are good options, along with other institutions with strong placements.

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Follow RediffGURUS to Know more on 'Careers | Health | Money | Relationships'

Ans: You have worked hard and saved well. Your current asset base is strong. Your financial situation now needs a clear, future-ready plan. Let’s assess, realign, and plan forward with clarity and balance.

Here is a detailed 360-degree solution designed just for your needs.

1. Understand the New Phase

You are entering a key transition stage in life.

Your family income may reduce soon.

Medical costs are rising steadily.

Children’s higher education will need big money.

Retirement is also nearing.

Hence, your money must now work smarter.

2. Current Income and Expenses

Monthly family income is around Rs. 6.7 lakhs.

Household and son’s expenses are Rs. 1.6 lakhs monthly.

Medical treatment adds Rs. 1 lakh per month.

So total regular outflow is Rs. 2.6 lakhs monthly.

This leaves you a surplus of Rs. 4.1 lakhs now.

However, post-retirement, husband’s income may stop.

Then surplus may drop to Rs. 0.9 lakhs per month.

This calls for adjusting investments wisely.

3. Children’s Higher Education Planning

Your daughter wants to study abroad soon.

Expenses may go beyond Rs. 40–50 lakhs easily.

Please don’t redeem retirement corpus for this.

Instead, plan to liquidate from equity-based assets.

Start a step-by-step Systematic Withdrawal Plan (SWP).

You may also liquidate part of your flat worth Rs. 2.5 crore.

If needed, consider an education loan partially.

This keeps your retirement fund safe.

4. Husband’s Premature Retirement

This needs realignment of your financial plan.

Ensure a minimum of 5 years expenses are protected.

This means Rs. 1.6 lakhs x 60 months = Rs. 96 lakhs.

Keep this amount in low-risk debt mutual funds.

Avoid taking this from EPF or PPF.

Use proceeds from one flat if necessary.

SIPs must continue, but evaluate rebalancing based on income drop.

5. Medical Contingency Planning

Your husband’s treatment cost is high.

Medical inflation is rising rapidly.

Ensure both of you have health insurance.

Prefer a Rs. 25–50 lakh family floater with super top-up.

Do not depend only on employer health cover.

Keep an emergency fund of Rs. 10–15 lakhs separate.

This can be in liquid or ultra-short debt mutual funds.

6. Retirement Planning for Both

You are 52 and still employed.

Retirement age may be around 58–60 years.

That gives you 6–8 years of active income.

Use this period to build a strong retirement fund.

Don’t withdraw EPF or PPF till maturity.

Consider contributing more in mutual funds through SIPs.

Keep retirement corpus in low-cost, diversified active funds.

Don't shift funds into annuity options.

Post-retirement, plan a SWP from mutual funds for income.

Try to build a retirement corpus of Rs. 3–4 crores.

This will give Rs. 1–1.25 lakhs income monthly.

Include spouse’s expenses, inflation, and medical needs.

7. Existing Real Estate Assets

You have three flats. Two are for your use.

The third one is worth Rs. 2.5 crores.

Avoid holding it just for value appreciation.

Use it strategically for daughter’s education and corpus building.

Avoid further real estate purchases now.

Real estate is not liquid.

It doesn’t give regular income.

It has high maintenance and poor tax efficiency.

Your real estate exposure is already high.

8. Existing Investments Analysis

EPF and PPF total is around Rs. 1.62 crores.

Stocks worth Rs. 30 lakhs add moderate risk.

SIPs are Rs. 8 lakhs value currently.

Continue SIPs in well-diversified active mutual funds.

Prefer regular plan with guidance from MFD with CFP credential.

Direct plans don’t suit every investor.

Regular plans offer rebalancing, review, and advice.

Stocks are fine, but not for short-term needs.

Try not to add more unless you have time to review.

Mutual funds offer better diversification and control.

Ensure debt-equity mix is rebalanced annually.

9. Tax Planning and Investment Efficiency

EPF, PPF are tax-free on maturity.

Mutual fund gains are taxable.

LTCG on equity funds above Rs. 1.25 lakh is taxed at 12.5%.

STCG is taxed at 20%.

Debt fund gains are taxed as per your slab.

Plan redemptions smartly to reduce tax burden.

Avoid too many redemptions at once.

Spread them across financial years.

Get Form 26AS checked every year.

Don’t buy insurance for tax saving.

10. Cash Flow Planning Post-Retirement

Husband’s income may stop soon.

Your income will continue till 58 or 60.

Use your salary to fund most expenses till then.

From age 60, use SWP from mutual funds.

Add rental income if any in future.

Avoid bank FDs for monthly income.

They have low returns and poor taxation.

Instead, use a ladder of debt funds for short-term needs.

Equity mutual funds for long-term growth.

11. Insurance Cover Check

Check your term insurance if still active.

If not, you may not need one now.

Your asset base is strong.

Focus more on health insurance.

Take a separate critical illness cover too.

Medical costs can deplete savings quickly.

Review nominee details in every policy.

12. Estate and Will Planning

You have significant real estate and investments.

Children will inherit eventually.

Prepare a registered Will soon.

Mention who gets what clearly.

Include mutual funds, EPF, PPF, stocks, property.

Assign separate nominees for each asset class.

This avoids future disputes and confusion.

Discuss openly with your children.

13. Investment Behaviour Going Forward

Keep emotions out of investment decisions.

Don’t redeem when markets fall.

Follow asset allocation method strictly.

Every year review the plan.

Rebalance mutual funds once a year.

Reinvest redemptions wisely.

Don’t increase real estate holding further.

Don’t fall for hot stock tips.

Avoid policies combining insurance and investment.

Finally

Your current position is strong.

Your focus should be on protection and preservation.

Avoid risky investments now.

Plan each goal with a dedicated fund.

Keep enough liquidity for health and education.

Create predictable income sources post-retirement.

Work with a Certified Financial Planner yearly.

Review goals, returns, risks and expenses every year.

Stay disciplined and goal-oriented.

Your family’s financial future will remain safe.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: For research focus: University of North Texas > VNRVJIET > GFTI > BITS Dubai

For better India exposure and local job market, VNRVJIET or good state colleges are fine.

For international exposure and research, UNT is better.

Ans: Main Subjects in B.Sc (for PCB background):
Biology (Zoology, Botany, Microbiology)

Chemistry

Physics (sometimes optional)

Biochemistry

Genetics

Environmental Science

Other options besides B.Sc:
B.Pharm (Bachelor of Pharmacy) – if interested in pharmaceuticals.

BPT (Bachelor of Physiotherapy) – if interested in physiotherapy.

BMLT (Bachelor in Medical Laboratory Technology)

BASLP (Bachelor of Audiology and Speech-Language Pathology)

B.Sc Nursing

Bachelor in Biotechnology

Bachelor in Nutrition and Dietetics

Bachelor in Forensic Science

B.Sc in Psychology

Professional courses to consider later:
Pharmacy, Physiotherapy, Nursing, Biotechnology, Genetic Counseling, Biomedical Sciences