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29, 80k Salary: Smart Loan for My 29.5L Dream Flat?
Ramalingam Kalirajan |9241 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jun 02, 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 - May 18, 2025Hindi
Hello Sir, I am 29 years old and having in hand salary of 80k-85k per month after deductions. I also have 5L in mutual funds(ELSS and small cap)(15k pm and increasing it by 5 to 10% every year) and also a 25k per annum LIC. Also i have enough emergency fund to help myself and my family. Not having any type of loan till date. Credit card utilisation is always below 30% and never missed a on-time payment. Cibil score is above 790. I booked a flat for 29.50L. I am seeking to take home loan for 15 years tenure. Can you suggest me 1.should i go for floating interst rate or fixed? 2. Which bank should I prefer? 3. Can I able to repay the loan before tenure without penalties? 4. By repaying principal amount of loan directly in loan account possible?5. Am i on right path ? .. Also can you give some tips to manage all the things without any stress ?
Ans: You seem to be managing your finances very well. Let’s address your points and also give you tips to handle things stress-free.
?
Your Current Financial Position
?
You have no existing loan. This is very good for your credit.
?
Your CIBIL score is 790+. It shows your discipline with credit cards.
?
You have Rs 5 lakh in mutual funds. This is good for your future.
?
You booked a flat for Rs 29.5 lakh. This is a responsible decision.
?
Your emergency fund is in place. That’s very important.
?
Your SIP is at Rs 15,000 monthly. You are also increasing it every year.
?
Your LIC policy is Rs 25,000 per year. Let’s see if it’s worth continuing.
?
You have enough income to cover EMI and expenses.
?
?
Floating or Fixed Interest Rate?
?
Floating interest rate can change during the loan term.
?
Fixed interest rate stays same for the period you choose.
?
In India, floating rates are lower in the start.
?
Fixed rates are safer if you want to avoid rate changes.
?
But in the long run, floating rate can be cheaper.
?
Many banks offer floating rates for home loans today.
?
You are young and have good income. Floating rate is better for you.
?
But if you really feel worried, you can pick a fixed rate.
?
It depends on your comfort with changing EMIs.
?
Most people in your age group choose floating rates.
?
?
Which Bank to Prefer?
?
Most banks and housing finance companies give home loans.
?
Public sector banks usually have lower rates.
?
Private banks give faster service but can have higher rates.
?
You should compare 3 to 4 banks’ rates.
?
Look at processing fee, insurance terms, and hidden charges.
?
Check if the bank lets you repay faster without penalty.
?
Do not go only for banks giving quick approval.
?
Look at the full cost and service quality.
?
Talk to your bank where you hold salary account.
?
They might give you special rates for existing customers.
?
?
Repaying Loan Early – Any Penalty?
?
As per current rules, no penalty on floating rate loans.
?
Fixed rate loans can have some charges for early closure.
?
Check with your bank about prepayment terms.
?
If you take a floating loan, you can repay principal anytime.
?
This will reduce your interest cost and shorten the tenure.
?
It’s good to repay extra when you have surplus.
?
Always tell the bank you want it to go towards principal.
?
?
Paying Principal Directly into Loan Account
?
Yes, you can directly pay principal into loan account.
?
Tell your bank to adjust extra payment as principal only.
?
This will cut your interest and tenure faster.
?
Keep records of these payments and get confirmation.
?
Always keep your EMI paid on time first.
?
?
Are You on the Right Path?
?
Yes, you are on the right track.
?
You are building assets without overloading debt.
?
Your SIPs are increasing every year. That’s very good.
?
Emergency fund is in place. That’s key for peace of mind.
?
You have no other debt to disturb your future plans.
?
Keep tracking your cash flow every month.
?
Increase investments as your salary grows.
?
?
About LIC Policy
?
You pay Rs 25,000 yearly to LIC.
?
If this is an endowment plan or moneyback, returns can be low.
?
Traditional LIC plans give 4-5% returns after tax.
?
You can surrender and reinvest in mutual funds.
?
Mutual funds can give you better returns for long term.
?
Please meet a Certified Financial Planner before acting.
?
They will check if surrender charges are high or not.
?
?
Stress-Free Tips for Managing All
?
Always keep 3-6 months of expenses as emergency fund.
?
Your emergency fund is done. Keep topping up if expenses rise.
?
Do not overburden yourself with high EMI. Keep EMI within 30-40% of income.
?
Keep track of expenses and budget every month.
?
Use apps to track where your money goes.
?
Avoid lifestyle inflation. Don’t spend more as salary grows.
?
Increase SIPs every year. Even 5% hike helps a lot.
?
Have term insurance to protect your family.
?
Health insurance is also a must-have to protect savings.
?
Keep saving for short term goals like holidays or vehicle in separate funds.
?
Keep long term goals in mutual funds.
?
Do not mix insurance and investment.
?
?
Some More Insights for 360 Degree Planning
?
Review your loan terms every year. Banks may reduce rates for good borrowers.
?
If you get bonus or extra money, use some to repay home loan.
?
Some part can go to investments too.
?
Balance between loan prepayment and investment growth.
?
Home loan interest gives tax benefits under Section 24(b).
?
Principal repayment gives benefit under Section 80C.
?
But don’t just take loan for tax benefits.
?
Your CIBIL score is good. Keep paying bills on time.
?
Never max out your credit card even if bank offers limit hike.
?
Avoid multiple loans at the same time. Handle one at a time.
?
Don’t get too many credit cards. One or two is enough.
?
Keep one trusted bank as your main banking partner.
?
Have a separate account for investments. Don’t mix with expenses.
?
Meet a Certified Financial Planner once a year. They will help keep you on track.
?
They can show better investment options for your future.
?
?
Your Mutual Funds and SIP
?
Your SIPs are mainly in ELSS and small cap.
?
Small cap funds are good for long term. They are risky though.
?
Keep increasing SIP in line with salary growth.
?
Keep some in large cap or balanced funds too for stability.
?
Small cap alone can be volatile in market fall.
?
ELSS is good for tax saving and long term wealth.
?
Don’t stop SIPs even if market is down.
?
Stay invested for 10-15 years for best results.
?
Avoid index funds as they only follow market. They don’t try to beat it.
?
Index funds have no active research or fund manager.
?
Actively managed funds have experts to find better stocks.
?
They can give better returns in Indian markets.
?
?
Direct Funds vs Regular Funds
?
Direct funds save you commission cost but you must track and manage yourself.
?
If you don’t have expertise or time, regular funds are better.
?
Regular funds through a Certified Financial Planner give you advice too.
?
You get ongoing support, rebalancing, and better guidance.
?
Direct funds are good for experts only.
?
?
About Real Estate
?
You are buying a home to live in. That’s fine.
?
Don’t see real estate as an investment only.
?
Property can give security but also has costs.
?
Maintenance, taxes, and repairs can eat into returns.
?
Always keep your home loan EMI and investments balanced.
?
?
Finally
?
You are on a steady and thoughtful financial journey.
?
Keep your good habits alive. Don’t stop saving and investing.
?
Meet a Certified Financial Planner for full review every year.
?
Life goals can change. You need a plan that can change too.
?
Don’t get stressed. You have built a solid base already.
?
Keep it going. You will reach your dreams step by step.
?
Best Regards,
?
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
?
Your Current Financial Position
?
You have no existing loan. This is very good for your credit.
?
Your CIBIL score is 790+. It shows your discipline with credit cards.
?
You have Rs 5 lakh in mutual funds. This is good for your future.
?
You booked a flat for Rs 29.5 lakh. This is a responsible decision.
?
Your emergency fund is in place. That’s very important.
?
Your SIP is at Rs 15,000 monthly. You are also increasing it every year.
?
Your LIC policy is Rs 25,000 per year. Let’s see if it’s worth continuing.
?
You have enough income to cover EMI and expenses.
?
?
Floating or Fixed Interest Rate?
?
Floating interest rate can change during the loan term.
?
Fixed interest rate stays same for the period you choose.
?
In India, floating rates are lower in the start.
?
Fixed rates are safer if you want to avoid rate changes.
?
But in the long run, floating rate can be cheaper.
?
Many banks offer floating rates for home loans today.
?
You are young and have good income. Floating rate is better for you.
?
But if you really feel worried, you can pick a fixed rate.
?
It depends on your comfort with changing EMIs.
?
Most people in your age group choose floating rates.
?
?
Which Bank to Prefer?
?
Most banks and housing finance companies give home loans.
?
Public sector banks usually have lower rates.
?
Private banks give faster service but can have higher rates.
?
You should compare 3 to 4 banks’ rates.
?
Look at processing fee, insurance terms, and hidden charges.
?
Check if the bank lets you repay faster without penalty.
?
Do not go only for banks giving quick approval.
?
Look at the full cost and service quality.
?
Talk to your bank where you hold salary account.
?
They might give you special rates for existing customers.
?
?
Repaying Loan Early – Any Penalty?
?
As per current rules, no penalty on floating rate loans.
?
Fixed rate loans can have some charges for early closure.
?
Check with your bank about prepayment terms.
?
If you take a floating loan, you can repay principal anytime.
?
This will reduce your interest cost and shorten the tenure.
?
It’s good to repay extra when you have surplus.
?
Always tell the bank you want it to go towards principal.
?
?
Paying Principal Directly into Loan Account
?
Yes, you can directly pay principal into loan account.
?
Tell your bank to adjust extra payment as principal only.
?
This will cut your interest and tenure faster.
?
Keep records of these payments and get confirmation.
?
Always keep your EMI paid on time first.
?
?
Are You on the Right Path?
?
Yes, you are on the right track.
?
You are building assets without overloading debt.
?
Your SIPs are increasing every year. That’s very good.
?
Emergency fund is in place. That’s key for peace of mind.
?
You have no other debt to disturb your future plans.
?
Keep tracking your cash flow every month.
?
Increase investments as your salary grows.
?
?
About LIC Policy
?
You pay Rs 25,000 yearly to LIC.
?
If this is an endowment plan or moneyback, returns can be low.
?
Traditional LIC plans give 4-5% returns after tax.
?
You can surrender and reinvest in mutual funds.
?
Mutual funds can give you better returns for long term.
?
Please meet a Certified Financial Planner before acting.
?
They will check if surrender charges are high or not.
?
?
Stress-Free Tips for Managing All
?
Always keep 3-6 months of expenses as emergency fund.
?
Your emergency fund is done. Keep topping up if expenses rise.
?
Do not overburden yourself with high EMI. Keep EMI within 30-40% of income.
?
Keep track of expenses and budget every month.
?
Use apps to track where your money goes.
?
Avoid lifestyle inflation. Don’t spend more as salary grows.
?
Increase SIPs every year. Even 5% hike helps a lot.
?
Have term insurance to protect your family.
?
Health insurance is also a must-have to protect savings.
?
Keep saving for short term goals like holidays or vehicle in separate funds.
?
Keep long term goals in mutual funds.
?
Do not mix insurance and investment.
?
?
Some More Insights for 360 Degree Planning
?
Review your loan terms every year. Banks may reduce rates for good borrowers.
?
If you get bonus or extra money, use some to repay home loan.
?
Some part can go to investments too.
?
Balance between loan prepayment and investment growth.
?
Home loan interest gives tax benefits under Section 24(b).
?
Principal repayment gives benefit under Section 80C.
?
But don’t just take loan for tax benefits.
?
Your CIBIL score is good. Keep paying bills on time.
?
Never max out your credit card even if bank offers limit hike.
?
Avoid multiple loans at the same time. Handle one at a time.
?
Don’t get too many credit cards. One or two is enough.
?
Keep one trusted bank as your main banking partner.
?
Have a separate account for investments. Don’t mix with expenses.
?
Meet a Certified Financial Planner once a year. They will help keep you on track.
?
They can show better investment options for your future.
?
?
Your Mutual Funds and SIP
?
Your SIPs are mainly in ELSS and small cap.
?
Small cap funds are good for long term. They are risky though.
?
Keep increasing SIP in line with salary growth.
?
Keep some in large cap or balanced funds too for stability.
?
Small cap alone can be volatile in market fall.
?
ELSS is good for tax saving and long term wealth.
?
Don’t stop SIPs even if market is down.
?
Stay invested for 10-15 years for best results.
?
Avoid index funds as they only follow market. They don’t try to beat it.
?
Index funds have no active research or fund manager.
?
Actively managed funds have experts to find better stocks.
?
They can give better returns in Indian markets.
?
?
Direct Funds vs Regular Funds
?
Direct funds save you commission cost but you must track and manage yourself.
?
If you don’t have expertise or time, regular funds are better.
?
Regular funds through a Certified Financial Planner give you advice too.
?
You get ongoing support, rebalancing, and better guidance.
?
Direct funds are good for experts only.
?
?
About Real Estate
?
You are buying a home to live in. That’s fine.
?
Don’t see real estate as an investment only.
?
Property can give security but also has costs.
?
Maintenance, taxes, and repairs can eat into returns.
?
Always keep your home loan EMI and investments balanced.
?
?
Finally
?
You are on a steady and thoughtful financial journey.
?
Keep your good habits alive. Don’t stop saving and investing.
?
Meet a Certified Financial Planner for full review every year.
?
Life goals can change. You need a plan that can change too.
?
Don’t get stressed. You have built a solid base already.
?
Keep it going. You will reach your dreams step by step.
?
Best Regards,
?
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Asked on - Jun 02, 2025 | Answered on Jun 02, 2025
ListenThank you so much for your valuable advice.
Ans: You're welcome! If you have any more questions or need further assistance, feel free to ask. Best wishes on your financial journey!
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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.
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