Need Expert Advice?Our Gurus Can Help
Ramalingam Kalirajan |10874 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jul 10, 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
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 - Jun 25, 2025Hindi
Hi sir I am getting in hand 1,2000 my household expenses are 30000 I have 2 policies yearly paying 100000 sip 20000 per month. Home loan of 600000 lakh. Paying 33000 emi. Having ppf 1000000. Policies 400000,400000, sip till now 200000. How to clear home loan early
Ans: You have shared key figures clearly. You are earning Rs. 1,20,000 in hand. Household expenses are Rs. 30,000 per month. You have a SIP of Rs. 20,000 monthly. Home loan is Rs. 60 lakh with Rs. 33,000 EMI. You are paying Rs. 1,00,000 yearly for two policies. You also have Rs. 10 lakh in PPF and two policies worth Rs. 4 lakh each. SIP corpus is Rs. 2 lakh till now. Let’s evaluate your situation and plan how to reduce your loan burden faster.
? Understanding Your Current Cash Flow
– You earn Rs. 1.2 lakh each month.
– Monthly fixed costs are Rs. 30,000.
– SIP takes Rs. 20,000 per month.
– Home loan EMI is Rs. 33,000.
– Yearly policy premium is Rs. 1 lakh. That’s Rs. 8,300 monthly.
– So total outgo monthly is around Rs. 91,300.
– You are left with around Rs. 28,000 monthly balance.
– From this, we can plan loan prepayment and future stability.
? Evaluate Your Investment Instruments First
– Rs. 10 lakh in PPF is a safe and long-term investment.
– It is locked and earns steady but low interest.
– Rs. 2 lakh in SIP is good. You are investing actively for future.
– Rs. 20,000 SIP is a good habit. Continue it if possible.
– The two insurance policies worth Rs. 4 lakh each need attention.
– If these are endowment or ULIP policies, please review them seriously.
– These policies give poor returns and low insurance coverage.
– Check surrender value and policy terms.
– If they are older than 3 years, you can exit them safely.
– Surrender and reinvest the proceeds in mutual funds.
– It will boost your returns and improve wealth building.
? Rework Your Insurance Strategy
– Policies offering insurance + investment are not efficient.
– Real insurance must only be term cover.
– You have not mentioned term insurance. Please take a pure term plan.
– It is cheaper and gives large risk cover.
– Surrender policies giving poor value and protect with term insurance.
– This saves premium and avoids mixing goals.
? Focus on Regular and Active Mutual Funds
– Continue with SIP in actively managed mutual funds.
– Do not shift to index funds.
– Index funds just mirror the market with no expert guidance.
– In volatile times, they fail to control loss.
– Actively managed funds are reviewed by expert fund managers.
– They reduce risk and capture opportunities better.
– Also, don’t use direct funds on your own.
– Direct funds give no tracking or expert input.
– Investors often panic and redeem early.
– That kills long-term return potential.
– Use regular funds through Certified Financial Planner only.
– You get full support and portfolio reviews.
? Strategies to Clear Home Loan Early
– You want to reduce loan faster. This is a wise goal.
– Loan of Rs. 60 lakh with Rs. 33,000 EMI will last long.
– Early closure will save huge interest outgo.
– Let’s explore smart ways to do this.
• Use policy surrender money:
– If you surrender two policies of Rs. 4 lakh each, total Rs. 8 lakh can come.
– Use part of that for partial loan prepayment.
– This reduces loan principal directly.
– Your EMI stays same but tenure drops.
• Channel SIP returns smartly:
– You already have Rs. 2 lakh invested.
– Avoid redeeming now unless urgent.
– Let this money grow in mutual funds.
– Later, after 3–4 years, redeem part of it.
– Use that to prepay a lump sum.
– Tax will apply based on holding time.
– Equity LTCG above Rs. 1.25 lakh taxed at 12.5%.
– STCG taxed at 20%. Use this rule only when redeeming.
• Review and pause SIP temporarily:
– If needed, reduce SIP by Rs. 5,000–10,000 per month for 2 years.
– Channel that money directly to loan prepayment.
– That gives short-term relief to reduce debt.
– Resume SIP once prepayment is done.
• Monthly surplus as prepayment:
– You are saving around Rs. 28,000 monthly.
– Use at least Rs. 10,000–15,000 from this for monthly prepayment.
– This small step adds up fast over a year.
– Even Rs. 1.5 lakh prepayment yearly reduces years from tenure.
• Avoid lifestyle inflation:
– As income grows, avoid increasing expenses.
– Put all future hikes into prepaying loan.
– This way, your EMI stays same but you gain freedom early.
? Reduce Home Loan Tenure Gradually
– Banks allow part payments without penalty.
– Do one-time part payment once a year if possible.
– Focus on the early years to pay more.
– Interest is highest in the early stage of loan.
– If you get any bonus or incentive, use that fully for loan.
– Don’t use it for unnecessary expenses.
– Every extra Rs. 1 lakh prepayment saves big interest.
? Emergency Fund is Still Important
– Don't empty all funds for loan repayment.
– Keep at least 6 months of expenses in liquid form.
– Use savings account or liquid mutual funds for this.
– Never use PPF or long-term SIP for emergency.
? Should You Touch PPF for Loan Closure?
– You have Rs. 10 lakh in PPF.
– Try not to withdraw or break this unless very urgent.
– PPF gives stable returns and is tax-free.
– It also works as retirement support.
– PPF withdrawal is allowed after 5 years but with conditions.
– Better to leave it untouched and plan loan from other sources.
? Avoid Real Estate as Investment Option
– Real estate may feel attractive, but not liquid or flexible.
– You need cashflow support, not locked assets.
– Mutual funds are more flexible, transparent and reviewable.
– Stick with them to build wealth and prepay loan.
? Tax Planning Should Align with Loan Strategy
– Ensure you claim full benefit under 80C using SIP in ELSS, PPF.
– Also claim Rs. 2 lakh interest deduction on home loan under section 24.
– This gives better tax refund and improves savings.
– Don’t over-invest in tax saving tools just for deduction.
– Balance returns and lock-in before committing more.
? Stay Consistent and Keep Reviewing Yearly
– Don’t try to rush loan closure in panic.
– Stay calm and consistent with prepayments.
– Avoid investing in products with poor liquidity or low return.
– Keep SIPs going where possible.
– Get yearly review with Certified Financial Planner.
– Adjust SIP, expenses and loan plan as income grows.
? Final Insights
– Your income and savings pattern is healthy.
– But mix of investments and insurance needs realignment.
– Surrender poor insurance plans and reinvest wisely.
– Increase SIP in actively managed mutual funds gradually.
– Use surplus monthly savings for part payments.
– Avoid touching long-term assets like PPF or equity SIPs early.
– Use yearly bonuses or gifts for reducing principal.
– Consult Certified Financial Planner every year for plan update.
– This way, you can close loan faster without hurting long-term goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
? Understanding Your Current Cash Flow
– You earn Rs. 1.2 lakh each month.
– Monthly fixed costs are Rs. 30,000.
– SIP takes Rs. 20,000 per month.
– Home loan EMI is Rs. 33,000.
– Yearly policy premium is Rs. 1 lakh. That’s Rs. 8,300 monthly.
– So total outgo monthly is around Rs. 91,300.
– You are left with around Rs. 28,000 monthly balance.
– From this, we can plan loan prepayment and future stability.
? Evaluate Your Investment Instruments First
– Rs. 10 lakh in PPF is a safe and long-term investment.
– It is locked and earns steady but low interest.
– Rs. 2 lakh in SIP is good. You are investing actively for future.
– Rs. 20,000 SIP is a good habit. Continue it if possible.
– The two insurance policies worth Rs. 4 lakh each need attention.
– If these are endowment or ULIP policies, please review them seriously.
– These policies give poor returns and low insurance coverage.
– Check surrender value and policy terms.
– If they are older than 3 years, you can exit them safely.
– Surrender and reinvest the proceeds in mutual funds.
– It will boost your returns and improve wealth building.
? Rework Your Insurance Strategy
– Policies offering insurance + investment are not efficient.
– Real insurance must only be term cover.
– You have not mentioned term insurance. Please take a pure term plan.
– It is cheaper and gives large risk cover.
– Surrender policies giving poor value and protect with term insurance.
– This saves premium and avoids mixing goals.
? Focus on Regular and Active Mutual Funds
– Continue with SIP in actively managed mutual funds.
– Do not shift to index funds.
– Index funds just mirror the market with no expert guidance.
– In volatile times, they fail to control loss.
– Actively managed funds are reviewed by expert fund managers.
– They reduce risk and capture opportunities better.
– Also, don’t use direct funds on your own.
– Direct funds give no tracking or expert input.
– Investors often panic and redeem early.
– That kills long-term return potential.
– Use regular funds through Certified Financial Planner only.
– You get full support and portfolio reviews.
? Strategies to Clear Home Loan Early
– You want to reduce loan faster. This is a wise goal.
– Loan of Rs. 60 lakh with Rs. 33,000 EMI will last long.
– Early closure will save huge interest outgo.
– Let’s explore smart ways to do this.
• Use policy surrender money:
– If you surrender two policies of Rs. 4 lakh each, total Rs. 8 lakh can come.
– Use part of that for partial loan prepayment.
– This reduces loan principal directly.
– Your EMI stays same but tenure drops.
• Channel SIP returns smartly:
– You already have Rs. 2 lakh invested.
– Avoid redeeming now unless urgent.
– Let this money grow in mutual funds.
– Later, after 3–4 years, redeem part of it.
– Use that to prepay a lump sum.
– Tax will apply based on holding time.
– Equity LTCG above Rs. 1.25 lakh taxed at 12.5%.
– STCG taxed at 20%. Use this rule only when redeeming.
• Review and pause SIP temporarily:
– If needed, reduce SIP by Rs. 5,000–10,000 per month for 2 years.
– Channel that money directly to loan prepayment.
– That gives short-term relief to reduce debt.
– Resume SIP once prepayment is done.
• Monthly surplus as prepayment:
– You are saving around Rs. 28,000 monthly.
– Use at least Rs. 10,000–15,000 from this for monthly prepayment.
– This small step adds up fast over a year.
– Even Rs. 1.5 lakh prepayment yearly reduces years from tenure.
• Avoid lifestyle inflation:
– As income grows, avoid increasing expenses.
– Put all future hikes into prepaying loan.
– This way, your EMI stays same but you gain freedom early.
? Reduce Home Loan Tenure Gradually
– Banks allow part payments without penalty.
– Do one-time part payment once a year if possible.
– Focus on the early years to pay more.
– Interest is highest in the early stage of loan.
– If you get any bonus or incentive, use that fully for loan.
– Don’t use it for unnecessary expenses.
– Every extra Rs. 1 lakh prepayment saves big interest.
? Emergency Fund is Still Important
– Don't empty all funds for loan repayment.
– Keep at least 6 months of expenses in liquid form.
– Use savings account or liquid mutual funds for this.
– Never use PPF or long-term SIP for emergency.
? Should You Touch PPF for Loan Closure?
– You have Rs. 10 lakh in PPF.
– Try not to withdraw or break this unless very urgent.
– PPF gives stable returns and is tax-free.
– It also works as retirement support.
– PPF withdrawal is allowed after 5 years but with conditions.
– Better to leave it untouched and plan loan from other sources.
? Avoid Real Estate as Investment Option
– Real estate may feel attractive, but not liquid or flexible.
– You need cashflow support, not locked assets.
– Mutual funds are more flexible, transparent and reviewable.
– Stick with them to build wealth and prepay loan.
? Tax Planning Should Align with Loan Strategy
– Ensure you claim full benefit under 80C using SIP in ELSS, PPF.
– Also claim Rs. 2 lakh interest deduction on home loan under section 24.
– This gives better tax refund and improves savings.
– Don’t over-invest in tax saving tools just for deduction.
– Balance returns and lock-in before committing more.
? Stay Consistent and Keep Reviewing Yearly
– Don’t try to rush loan closure in panic.
– Stay calm and consistent with prepayments.
– Avoid investing in products with poor liquidity or low return.
– Keep SIPs going where possible.
– Get yearly review with Certified Financial Planner.
– Adjust SIP, expenses and loan plan as income grows.
? Final Insights
– Your income and savings pattern is healthy.
– But mix of investments and insurance needs realignment.
– Surrender poor insurance plans and reinvest wisely.
– Increase SIP in actively managed mutual funds gradually.
– Use surplus monthly savings for part payments.
– Avoid touching long-term assets like PPF or equity SIPs early.
– Use yearly bonuses or gifts for reducing principal.
– Consult Certified Financial Planner every year for plan update.
– This way, you can close loan faster without hurting long-term goals.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
MoneyReply
You may like to see similar questions and answers below
Ramalingam Kalirajan |10874 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on May 24, 2024
Ramalingam Kalirajan |10874 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jun 03, 2025
Ramalingam Kalirajan |10874 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on May 29, 2025
Ramalingam Kalirajan |10874 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jul 03, 2025
Ramalingam Kalirajan |10874 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Aug 18, 2025
Latest Questions
Mayank Chandel |2569 Answers |Ask -Follow
IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Dec 08, 2025
Mayank Chandel |2569 Answers |Ask -Follow
IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Dec 08, 2025
Asked by Anonymous - Nov 18, 2025Hindi
Sir I passed class 12th from Maharashtra board (PCMB + English) I scored 48 in chemistry 52 in physics and 46 in biology I have a marksheet from Nios board which consists only one subject biology in which I scored 58 marks , My question is am I eligible for admission in mbbs ( govt college ) if I score good in Neet 2026 ??? Can I combine state board (PCB)marksheet + Nios ( biology marksheet) to fullfill 50% PCB aggregate score ?? I am from general Ews category please resolve my query
Ans: I recommend appearing for all 5 subjects through NIOS
Asked on - Dec 08, 2025 | Answered on Dec 08, 2025
Am I ineligible for mbbs?? Will they reject me?
Ans: Might be as you gave PCMB already from MS board. There is not concrete answer in counselling brochure.
Mayank Chandel |2569 Answers |Ask -Follow
IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Dec 08, 2025
Mayank Chandel |2569 Answers |Ask -Follow
IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Dec 08, 2025
Mayank Chandel |2569 Answers |Ask -Follow
IIT-JEE, NEET-UG, SAT, CLAT, CA, CS Exam Expert - Answered on Dec 08, 2025
Anu Krishna |1746 Answers |Ask -Follow
Relationships Expert, Mind Coach - Answered on Dec 08, 2025
Ramalingam Kalirajan |10874 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Dec 08, 2025
Samraat Jadhav |2499 Answers |Ask -Follow
Stock Market Expert - Answered on Dec 08, 2025
Ramalingam Kalirajan |10874 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Dec 08, 2025
Radheshyam Zanwar |6737 Answers |Ask -Follow
MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Dec 08, 2025
