Help! I'm 35 with 2 loans. How to save & repay?

Ans: I understand that managing multiple loan EMIs along with credit card expenses can be challenging, but with a strategic approach, you can effectively save money and improve your financial situation. Here are some steps to consider:

Evaluate Your Expenses
Genuine Compliments on recognizing the need to save money despite your financial commitments. Start by reviewing your monthly expenses, including necessities like rent, utilities, groceries, and discretionary spending. Identify areas where you can cut back or eliminate unnecessary expenses.

Prioritize Debt Repayment
Your home loan, personal loan, and credit card debts are likely accruing high-interest charges, making them priority areas for repayment. Allocate a significant portion of your monthly income towards clearing off these debts as quickly as possible to reduce interest payments and free up more money for savings.

Create a Budget
Develop a realistic monthly budget that accounts for your essential expenses, debt repayments, and savings goals. Stick to your budget religiously and track your spending regularly to ensure you're staying on track. Consider using budgeting apps or spreadsheets to streamline the process.

Emergency Fund
Building an emergency fund is crucial to cover unexpected expenses or financial emergencies without resorting to further borrowing. Aim to save at least 3-6 months' worth of living expenses in a high-yield savings account or liquid investment that you can easily access when needed.

Automate Savings
Set up automatic transfers from your salary account to a separate savings account or investment account each month. This "pay yourself first" approach ensures that you prioritize savings before spending and helps cultivate a consistent saving habit over time.

Review and Negotiate
Regularly review your expenses and look for opportunities to negotiate better deals or lower interest rates on your loans and credit cards. Explore options such as balance transfers or loan refinancing to consolidate debt and reduce interest costs.

Additional Income Streams
Consider exploring additional sources of income, such as freelancing, part-time work, or selling unused items, to supplement your salary and accelerate debt repayment. Every extra rupee earned can make a significant difference in achieving your financial goals.

Seek Professional Advice
As a Certified Financial Planner, I'm here to provide personalized guidance and support tailored to your specific financial situation and goals. I can help you develop a comprehensive financial plan that addresses debt management, savings strategies, and long-term financial security.

Conclusion
In conclusion, by prioritizing debt repayment, creating a budget, building an emergency fund, automating savings, reviewing expenses, exploring additional income streams, and seeking professional advice, you can effectively save money and improve your financial well-being despite your existing financial commitments.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are earning well and saving regularly.
You are managing a large loan but still investing. That is very good.

Let us create a 360-degree action plan.
This will help you close the home loan in 8 years.
Also, it will help you grow savings comfortably.

Understanding Your Current Structure

Your home loan is Rs 63 lakhs. EMI is Rs 90,000 every month.

Your salary is Rs 2.7 lakhs per month. This gives you a strong income base.

You are investing Rs 35,000 monthly in mutual funds.

You are paying Rs 10,000 per month in LIC premium.

Total committed outflow: Rs 1.35 lakhs every month.

You are saving over 45% of your income. That is very good.

Your EMI is 33% of your income. This is acceptable and manageable.

Let us now check how to optimise this better.

Check the LIC Policy Closely

You are paying Rs 10,000 per month into LIC. That is Rs 1.2 lakhs yearly.

Most LIC policies are insurance-cum-investment. They give low returns.

These returns are around 4% to 5%. This is below inflation.

If the policy is not near maturity, think of surrendering.

Get the current surrender value from the branch or online.

If losses are not too high, consider exiting it.

Move that Rs 10,000 per month into mutual funds.

That will improve your long-term returns significantly.

A Certified Financial Planner can guide on policy exit timing.

Review Mutual Fund Investments in Detail

You are investing Rs 35,000 every month. That is excellent.

But are you investing in regular plans or direct plans?

Direct plans offer no personal advice or fund strategy support.

Choosing funds alone in direct plans may reduce long-term returns.

Many investors pick underperforming funds in direct plans.

Instead, invest in regular plans through a CFP and MFD.

Certified Financial Planners give a structured portfolio approach.

They guide based on your age, risk, and goals.

Also check if your current funds are active or index-based.

Index funds just copy the market. They don’t beat inflation well.

Actively managed funds perform better over long periods.

They can shift strategies as per market changes.

Index funds stay passive even during downturns. That is a risk.

If you are holding index funds, consider switching.

Shift gradually to active funds with CFP guidance.

Home Loan Repayment Strategy Over 8 Years

You want to close the loan within 8 years. That is a smart decision.

Prepaying your loan reduces total interest cost significantly.

Continue your regular EMI of Rs 90,000 monthly.

Apart from this, plan for yearly prepayment.

Target to prepay around Rs 2 lakh to Rs 4 lakh per year.

Use bonuses, gifts, or matured FDs for this prepayment.

Even partial prepayments reduce your loan tenure quickly.

Don’t stop SIPs for prepayment. That will hurt long-term savings.

Instead, cut unnecessary monthly expenses for extra savings.

Any salary hike can also be channelled to loan prepayment.

If you follow this, you can close the loan in less than 8 years.

After closing, you can invest that Rs 90,000 EMI into mutual funds.

That will grow into a strong retirement corpus.

Tighten Expenses to Boost Savings

Track your monthly expenses honestly.

Split them into essential and optional categories.

Look at areas like eating out, entertainment, and gadgets.

You may find Rs 10,000 to Rs 15,000 per month to save.

Redirect that into SIP or yearly prepayment.

Even Rs 5,000 extra SIP every month has big future value.

Also create a “prepayment reserve” from gifts or side income.

Use that pool only for reducing loan balance every year.

Control spending through digital tracking apps or a handwritten logbook.

Involve family in this savings habit. That keeps motivation high.

Maintain Emergency Fund and Risk Cover

Don’t compromise your emergency fund while repaying the loan.

Keep at least 6 months of monthly expenses in a safe place.

This includes EMI, SIPs, and monthly costs.

Ideally keep Rs 6 lakh to Rs 8 lakh as emergency backup.

Health cover for all family members must be active.

Also take Rs 50 lakh to Rs 1 crore term insurance.

This protects your family if something unexpected happens.

Many ignore risk cover when focusing on EMI. Don’t make that mistake.

These protections should not be compromised under any condition.

Do not use emergency fund for loan prepayment. That is dangerous.

Asset Rebalancing After Loan Closure

Once your loan ends in 8 years, your EMI becomes free.

That is Rs 90,000 monthly ready for new goals.

Shift this full amount into mutual fund SIPs.

Let it grow for your retirement and daughters’ education.

Continue till age 60 or 65. Your corpus will grow big.

Mutual funds give flexibility, liquidity, and better growth.

Don't fall for new insurance policies again later.

Stay focused on goal-based investing only.

Your future self will thank you for this discipline.

Taxation Planning Alongside Investments

New mutual fund rules affect capital gains tax.

Equity mutual funds: LTCG above Rs 1.25 lakh taxed at 12.5%.

Short-term gains are taxed at 20%.

Debt fund gains taxed as per your income slab.

So, hold equity funds long term. Avoid frequent switches.

Avoid large one-time redemptions unless needed.

Plan exits with a Certified Financial Planner. They help reduce tax impact.

Stay within limits to reduce tax liability smartly.

Your Year-by-Year Action Plan

Year 1 to 3

Review LIC. Exit if not near maturity. Shift to mutual funds.

Track expenses. Identify Rs 10K to 15K extra to save.

Build Rs 2 lakh yearly for prepayment.

Increase SIP by Rs 5K if possible.

Maintain health and life insurance.

Avoid new loans or unnecessary spending.

Year 4 to 6

Continue Rs 90K EMI. Also continue Rs 35K to 40K SIP.

Prepay Rs 3 lakh to 4 lakh every year if income allows.

Get regular portfolio reviews from your CFP.

Increase SIP if your salary grows.

Avoid real estate, gold, or new insurance products.

Year 7 to 8

Finalise last loan payments. Close it completely.

Get loan closure certificate. Keep it safe.

Plan to invest Rs 90K EMI as SIP every month.

Shift focus fully to retirement and future needs.

Reassess goals and re-align mutual funds accordingly.

Finally

You are already doing many things right.

You earn well. You save. You invest. You plan ahead.

Only fine-tuning is needed.

Close LIC if it is not helpful. Shift to mutual funds.

Avoid index funds and direct plans.

Choose active mutual funds through CFP-guided regular plans.

Prepay home loan every year without stopping SIPs.

Avoid lifestyle inflation. Use income growth wisely.

Stay insured and keep emergency fund untouched.

By 53, you will be debt-free and financially strong.

After that, you can invest big and retire comfortably.

Let your money work for you, not the other way around.

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

Ans: You are 35, managing a home loan, personal loan, family responsibilities, and still investing. That itself shows great intent. Even though the situation looks tight, you are not ignoring savings.

Let us now build a step-by-step, 360-degree action plan to improve your savings and reduce debt.

Understand Where You Stand Today

Your monthly earnings: Rs 1,05,000.

Home loan EMI: Rs 1,45,000. (Seems higher than income, we’ll recheck)

Personal loan EMI: Rs 9,500.

SIP investment: Rs 3,500.

LIC premium: Rs 2,600.

Health cost for senior citizens: Rs 15,000 monthly.

Your income and outgo seem mismatched.

This may be because of error in the EMI figure you shared.

Home loan EMI cannot be Rs 1,45,000 on Rs 13 lakhs loan.

Assuming your home loan is Rs 13 lakhs and EMI is Rs 14,500.

With that correction, we proceed.

Breakdown of Current Monthly Outflow

Let’s estimate monthly spending based on revised understanding:

Home loan EMI: Rs 14,500

Personal loan EMI: Rs 9,500

SIP: Rs 3,500

LIC premium: Rs 2,600

Health expenses: Rs 15,000

Groceries, utility, child care, etc.: Rs 40,000–45,000 (assumption)

This totals around Rs 85,000 to Rs 90,000.

So you are left with Rs 10,000–15,000 monthly.

You are under pressure, but not stuck.

Rework Your Loan Structure First

You are paying two EMIs.

Home loan is long term.

Personal loan is short term but expensive.

Let’s handle them wisely:

Continue paying the home loan EMI normally

Focus on clearing the personal loan first

Try to prepay Rs 3,000–5,000 extra on personal loan monthly

Once personal loan is closed, redirect that Rs 9,500 EMI to savings

That simple shift increases your investable surplus after 8–12 months.

Even small prepayments make a huge difference in loan duration and interest.

LIC Premium – Recheck the Value

You are paying Rs 2,600 in LIC monthly.

That is Rs 31,200 per year.

Most likely, this is a traditional endowment or money-back policy.

These are low-return products.

You get only 4% to 5% returns.

They mix insurance and investment, which is not good.

Check surrender value.

If the policy is older than 3 years, you can surrender it.

Use that surrender amount to boost your emergency fund or mutual fund.

Replace it with a pure term insurance policy.

That gives high cover at low cost.

Keep insurance and investment separate always.

Build an Emergency Fund Slowly

You are supporting three senior citizens.

That itself makes emergency planning very important.

Start building a 3-month emergency fund.

It can be Rs 1.5 lakh to Rs 2 lakh depending on expenses.

Keep it in a liquid mutual fund or short-term debt fund.

If anything happens—job loss or health issue—you should not touch investments.

Build this over 10–12 months. No need to rush.

Start with Rs 2,000 monthly.

SIP – Increase Slowly but Steadily

You are already doing Rs 3,500 monthly SIP.

That’s a great start.

Once personal loan closes, increase SIP to Rs 10,000.

Even if you raise it by Rs 1,000 every 6 months, that’s progress.

Always use regular plans via a Certified Financial Planner and MFD.

Avoid direct funds.

Direct funds give no support or review.

When markets fall, you will feel lost.

You may exit early or switch wrongly.

With regular plans, you get proper guidance, help during bad times, and long-term planning.

That’s worth the slightly higher cost.

Avoid Index Funds – Choose Actively Managed Ones

Many online suggestions promote index funds.

Please avoid them.

Index funds copy the market. No active control.

When the market falls, they fall fully.

They cannot protect downside or exit bad sectors.

You are already under financial pressure.

You cannot afford pure market risk.

Instead, use actively managed funds.

They are more balanced, offer higher return potential, and are reviewed by fund managers.

Also, with help of a CFP, you’ll get better long-term allocation.

Monthly Budgeting Will Boost Surplus

You must do strict budgeting now.

Even saving Rs 2,000 extra monthly helps long term.

Here’s how to find savings:

Track every expense weekly

Avoid all impulsive online shopping

Reduce eating out or food delivery

Review mobile, DTH, broadband plans

Use cashback or reward apps smartly

Avoid credit card usage if not repaid fully

Small savings add up.

You can save Rs 3,000 to Rs 5,000 more monthly just by tracking and reducing.

Use this to increase prepayment or SIP.

Health Insurance – A Must in Your Case

You are spending Rs 15,000 monthly on medical needs.

This is high.

Check if you have health insurance for your parents and in-laws.

If not, buy senior citizen health cover now.

Yes, premium will be high.

But it will save big money later.

Medical bills can ruin your finances in one year.

Health insurance gives peace and control.

Don’t delay this.

Take help of a Certified Financial Planner to choose the right plan.

Child’s Future – Plan Slowly but Early

You haven’t mentioned children, but most families start saving for child education by age 35.

Once your personal loan closes, begin a separate SIP for that.

Even Rs 2,000 monthly grows well over 10–12 years.

Keep this goal separate.

Do not mix with retirement or general savings.

Tax Savings – Review Sections You Use

If you are not using full benefits under Sec 80C and 80D, you must.

Home loan principal (under 80C), LIC premium, and EPF are already counted.

Add ELSS mutual fund SIP (also under 80C).

Medical insurance for parents and self gives 80D benefit.

Use all options.

This saves tax and increases investible surplus.

Loan Prepayment Strategy in Steps

Here’s the simple order to follow:

Prepay personal loan by Rs 3,000 extra per month

Once it closes, channel Rs 9,500 EMI to SIP and home loan

Put Rs 6,000 into SIP and Rs 3,500 as extra home loan EMI

This will save lakhs in long-term interest

Keep doing this until home loan reduces significantly

Every loan prepayment now builds future peace.

Start small but stay consistent.

Stay Away from High-Risk or Locked Products

Some agents may pitch these products:

ULIPs

NPS with long lock-in

Insurance-linked investments

Real estate under loan

Please avoid all these.

You already have loans and low surplus.

Do not add locked products or risky assets.

Keep it simple: mutual funds + loan repayment + insurance.

Checklist for You to Start Now

Let’s list the immediate actions:

Confirm and correct EMI figures (especially home loan)

Surrender LIC after review, invest the amount in mutual funds

Prepay personal loan with Rs 3,000 to Rs 5,000 extra monthly

Build Rs 1.5 lakh emergency fund over next 12 months

Buy Rs 5 lakh health cover for family and parents

Increase SIP by Rs 500 every 6 months, aim for Rs 10,000 later

Use regular mutual funds through MFD and Certified Financial Planner

Avoid direct and index mutual funds completely

Rebudget monthly to find extra Rs 2,000 savings

Set up separate SIP for child’s education once personal loan closes

Avoid new liabilities until surplus improves

Finally

You are trying your best under tough conditions.

That itself deserves appreciation.

Now shift focus to step-by-step action.

Close personal loan early.

Redirect every rupee saved to mutual funds and home loan.

Avoid mistakes others make—like wrong insurance or locked plans.

Stay focused for 2 to 3 years.

You will see clear improvement.

Build slowly but wisely.

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

Ans: Your Current Financial Portrait
Age 40, take?home salary Rs?2.5?lakh/month

Personal loan EMI Rs?1.1?lakh/month for Rs?50?lakh over 5 years

LIC premium Rs?40,000/year (insurance)

Mutual fund SIP Rs?3,000/month

Monthly PF contribution Rs?20,000; PF balance Rs?10?lakh

Own flat and car with no EMIs

Household expenses Rs?75,000/month

No other liabilities recorded

This shows disciplined insurance and investment habits despite heavy EMI pressure. Let's break it down to give you actionable direction.

EMI Pressure and Cashflow Analysis
EMI consumes over 44% of net pay

Household spending adds another 30%

Insurance, SIP, and savings add about 10%

This leaves very little flexibility or surplus

Your loan is limiting savings and creating stress. Reducing EMI or its tenure must be the top priority.

Loan Prepayment & Refinance Options
Aim: Reduce EMI or tenure to free cash

Consider balance transfer to a lower?interest lender

Negotiate better terms with existing lender

Use PF or OD against PF to prepay part of loan

Any bonuses or windfalls should go into loan prepayment

Even small additional EMIs shorten loan and reduce interest

This will gradually release cash for savings and goals.

Prioritising Emergency Fund
Your household expenses are Rs?75,000/month. You need 6–9 months’ buffer.

Emergency corpus target: Rs?4.5–6.75?lakh

Start building immediately with small but consistent contributions

Use ultra?short debt or liquid mutual funds for liquidity

Avoid touching this fund for any non?emergent need

This fund protects your family from liquidity crises and prevents loan or credit misuse.

Reviewing Insurance Coverage
You carry LIC cover through annual premium. However:

LIC products often yield low returns

Insurance should only protect

Maturity benefits from LIC are usually modest

Consider:

Reviewing coverage scheduling

Discontinuing LIC policies if they are endowment or ULIP style

Using proceeds to buy term insurance via employer or privately (at least Rs?50–75?lakh)

Ensuring health coverage through cashless employers or individual floater

Reallocating LIC costs to term insurance and investment will produce better protection and growth.

Reallocating LIC Savings to Growth
If LIC is a traditional investment policy:

Evaluate IRR projections carefully

Most give only 4–5% post-lock-in

Surrender the policy if it is underperforming

Reinvest lump sum into equity mutual funds via regular plans

Regular funds give access to CFP guidance and portfolio shaping

This step will help grow your corpus faster and within a flexible structure.

Strengthening Investment Strategy
At present: SIP Rs?3,000/month only. You need more growth-focused investing.

Key strategies:

Increase SIP contributions gradually as loan repayment frees cash

Target monthly SIP of Rs?20,000 in next 12 months

Use actively managed equity and hybrid mutual funds

Avoid direct funds—they lack monitoring and review support

Choose regular plans through MFD and CFP for guidance and rebalancing

Proper guidance and active funds increase the chances of beating the market and managing risk.

Optimising PF & VPF Usage
You are actively contributing to PF, which is good for safe returns and tax benefits.

EPF yields ~8–8.5% risk-free; keep contributing

VPF adds flexibility and higher contribution if you choose

At loan prepayment stage, consider using part of PF for OD or partial withdrawal

However, avoid complete PF withdrawal. Preserve it for retirement needs.

Re?thinking Real Estate and Gold Exposure
You already own a flat; you have stable housing. No need for more property exposure.

Rental reliance or property speculation is not required

Instead of buying gold or real estate, focus on equity and hybrid mutual funds

These offer liquidity and a better chance at capital growth

This focus helps in building financial freedom rather than tying up income.

Budgeting and Lifestyle Alignment
Your expenses are Rs?75,000/month. Let’s see if cuts are possible.

Track every category: food, utilities, subscriptions, travel

Ask yourself: Are all expenses essential?

Create a lean budget aiming to reduce Rs?5,000–10,000 per month

Redirect savings to loan prepayment or SIP

Use budget tools, apps, or a simplistic monthly ledger

Small consistent savings build over time and help free cashflow.

Strategic Loan Pay?down Plan
Your loan of Rs?50?lakh will be eliminated in 5 years at current EMI. But we can accelerate:

Use PF OD or bonus to prepay Rs?10–15?lakh

Reduce EMI burden or cut down tenure

Redirect Rs?30,000–40,000 extra monthly to loan

Aim to retire loan within 3–4 years

Reallocate freed cash to investment post?repayment

This dual approach will fast-track financial freedom and enable better mental comfort.

Building Corpus Through SIP and Free Cashflow
Post loan prepayment and eventual completion:

Your disposable income will grow significantly

Channel an extra Rs?30,000–40,000/month into SIPs

At 10% return, long-term investing will build multimillion corpus

Set mini-goals:

3 years: Emergency fund + loan

5 years: Corpus of Rs?50–60?lakh

10–15 years: Rs?2–3 crore for retirement or other goals

Regular investing, staying focused, and reviewing yearly can help you reach goals.

Asset Allocation Suggested
During EMI period:

Equity mutual funds (growth): 50–60%

Hybrid funds (growth + stability): 20–30%

Debt funds/liquid (safety, emergency): 20%

Post loan freedom:

Equity: Adjust down to 40–50% gradually

Hybrid: Rise to 30–35%

Debt/liquid: Keep 15–20% for stability

This rebalancing reduces risk as your goals approach and ensures capital protection.

Periodic Review of Portfolio
Set reviews at:

Loan hit milestones (20%, 50%, 80%)

SIP amount review annually

Rebalancing portfolio every year

Adjust asset mix as your risk capacity changes

Reassess insurance, emergency corpus, and monthly budget

Continuous course correction is key to keeping your plan on track.

Avoiding Mistakes That Hurt Progress
Don’t delay additional EMI payments

Don’t stop SIPs during market drops

Don’t invest heavily in real estate or gold

Don’t rely on LIC policies for retirement goals

Don’t mix retirement corpus with sinking liabilities

Don’t skip increasing SIPs with savings

Don’t ignore tax efficiency in investments and withdrawals

Awareness of these errors helps avoid regression and ensures financial discipline.

Tax Planning & Withdrawal Strategy
Since investments are mainly in mutual funds and PF:

EPF and PPF withdrawals are tax-free post-holding period

Equity mutual fund LTCG above Rs?1.25?lakh is taxed at 12.5%

STCG taxed at 20%

Develop SWP plan after loan is repaid to manage post?tax income

Timing of withdrawal can reduce yearly tax liability

File Form 15G/H if you no longer have tax liability to avoid TDS

A well-structured approach maintains tax efficiency across your tenure.

Using Windfalls Wisely
In the future, if you get:

Bonus payout

PF EPF maturity

Inheritance

Performance bonus

Use a strategy:

Allocate part to loan prepayment

Allocate part to emergency fund if needed

Allocate the balance to investment via SIP in active funds

This ensures judicious, goal-oriented usage of unexpected funds.

Retirement Planning and Long-Term Goals
Once loan is cleared, you free up EMI budget for:

Corpus building for retirement or legacy goals

Potential child education funds if applicable

Enhancing insurance and health safety nets

Improving life quality—travel, skill upgrades, etc.

Setting long-term goals and working with a CFP will help align your financial journey toward freedom.

Behavioral and Emotional Strength
Debt pressure creates stress; reducing it relieves mental burden

Increased savings creates a sense of security and empowerment

Staying consistent through service periods builds discipline

Financial review with a Certified Financial Planner brings clarity and adjustments

Emotional stability is as important as numbers in finance.

Finally
Your EMI is currently limiting financial freedom

Refinance, prepay, and restructure loan to free cash

Build emergency fund alongside loan repayment

Redirect freed cash to enhance SIP contributions

Choose active funds via MFD and CFP for better growth

Rebalance asset mix post?loan with rising reserves

Avoid LIC, ULIP, direct funds, real estate investments

Lock in discipline, review yearly, reinforce financial stability

Keep short?term goals aligned with long?term vision

You are not just paying debt—you’re paving a path to freedom. With consistent efforts, expert advice, and disciplined investing, you will shift from burdened to financially secure within a few short years.

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