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Nikunj Saraf  |308 Answers  |Ask -

Mutual Funds Expert - Answered on Feb 04, 2023

Nikunj Saraf has more than five years of experience in financial markets and offers advice about mutual funds. He is vice president at Choice Wealth, a financial institution that offers broking, insurance, loans and government advisory services. Saraf, who is a member of the Institute Of Chartered Accountants of India, has a strong base in financial markets and wealth management.... more
Asked by Anonymous - Feb 02, 2023Hindi

Hello Nikunj Saraf, Is it a good option to pay off your car loan with the mutual fund money you have?

Ans: Whether it is a good option to pay off your car loan with mutual fund money depends on your personal financial situation and goals. Here are a few factors to consider:

Opportunity cost: Consider the potential opportunity cost of selling your mutual funds. If the mutual funds have appreciated in value and are likely to continue growing, selling them to pay off your car loan could result in losing out on future gains.

Risk tolerance: Mutual funds are a type of investment that carries some level of risk. Consider your overall risk tolerance and investment goals before making a decision.

Liquidity: Consider the liquidity of your mutual funds and the timeline for your car loan. If you may need access to the funds in the near future, it may not be a good idea to sell them to pay off your car loan.

Interest rates: Compare the interest rate on your car loan to the expected return on your mutual funds. If the interest rate on your car loan is high and the expected return on your mutual funds is low, it may make sense to use the funds to pay off the loan.

Ultimately, the decision to pay off your car loan with mutual fund money should be made after considering your unique financial situation and seeking advice from a financial advisor or tax professional.
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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Ramalingam Kalirajan  |658 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 11, 2024

Hi , I am 26 year old and contemplating to acquire a personal loan of 15 Lakhs at 10.45% interest with a tenure 5 years. And invest lumpsum it in Equity Mutual Funds giving a Return of about 25-30% on average Example: Quant Mutual Funds ( Midcap, Smallcap, Flexicap ) , Nippon India ( Midcap, smallcap) and Momentum Type Mutual Funds. I am intending to keep this Money invested for a Minimum of 5 years. Please suggest if I should go for it. Also I'm open to hear some better ways to go about investing aggressively using Loan. And also making the most out of my loan eligibility for acquiring gains.
Ans: Taking a personal loan to invest in equity mutual funds is a high-risk strategy and not advisable for several reasons:

Leverage: You'll be borrowing money to invest, which magnifies both gains and losses. If the market performs poorly, you could end up with significant losses and still have to repay the loan.

Interest Costs: The interest rate on personal loans is typically higher than the returns you can expect from mutual funds. Even with an average return of 25-30%, there's no guarantee you'll earn enough to cover the interest costs.

Market Volatility: Equity markets can be volatile over short periods. While they tend to provide good returns over the long term, there's no guarantee of positive returns in any given year.

Financial Security: Taking on debt to invest adds financial risk. If you face unexpected expenses or a loss of income, you could struggle to repay the loan, leading to financial stress.

Instead of borrowing to invest, consider the following alternatives:

Systematic Investment Plan (SIP): Invest a portion of your monthly income in mutual funds through SIPs. This approach allows you to invest regularly without taking on debt.

Emergency Fund: Build an emergency fund to cover unexpected expenses. This will provide financial security and prevent you from having to rely on loans in case of emergencies.

Financial Planning: Consult with a financial advisor to create a long-term investment plan based on your goals, risk tolerance, and financial situation.

Gradual Increase: Start with a smaller investment amount and gradually increase it over time as you become more comfortable with investing.

Remember, investing should be done prudently, considering your financial goals, risk tolerance, and current financial situation. Avoid taking on unnecessary debt to invest in the market, as it can lead to financial instability and stress.
Latest Questions

Ravi Mittal  |173 Answers  |Ask -

Dating, Relationships Expert - Answered on Apr 22, 2024

Asked by Anonymous - Apr 20, 2024Hindi
I am a 26 years old girl completed my studies, trying to get a job, 2 years back I fell in love online with a man of 32 years old, we have not met yet physically. He is working on a very small salary in a village i.e. his hometown. He can't get a good government job or private job now due to lack of experience and age. We love each other a lot with all our flaws. My family is strictly against it due to caste difference, low salary, he lives 1600 km away, background differences. Overall they don't trust him and our love and are emotionally blackmailing me to get married with someone they choose. And the thought alone of leaving him makes me sad
Ans: Dear Anonymous,

I am sorry for the challenges you are facing. I understand how difficult it must be to leave a person you love. Having said that, I would also like to point out that living a decent life is not cheap. You are currently unemployed and your partner has a low salary; it will not be sustainable in the long run. I am not asking you to leave him and marry someone else; all I am suggesting is don't rush. Take the time to find a decent job and ask your partner to do the same. Once you think you both are earning a good amount of money, put forth the idea of your marriage again to your parents.

Now the most important thing, you have met him online and never met him in real life. Is it worth taking this kind of risk before verifying everything in person? I am sure he is genuine but there is no harm in cross-checking. And I can't really blame your parents for having their doubts. Please don't rush. One wrong decision can ruin the rest of your life. Take your time, think this through, and meet him in person, most likely in your city and in a public space. Do a thorough background check. It is easy to get fooled when you are in love.

Again, please don't rush. You have your whole life ahead of you.

Best Wishes

Ravi Mittal  |173 Answers  |Ask -

Dating, Relationships Expert - Answered on Apr 22, 2024

Asked by Anonymous - Apr 21, 2024Hindi
Hi, I am 25+ years of old. Earning a handsome ammount of money arround 1lakh. I am a introvert, kind of kanjus you can say. I don't have any gf. I had one one one-sided relationship but because of low self confidence I didn't able to express my feelings. I don't feel myself as a ugly person but I am over waight, facing hair fall recently that's why I lose confidence approaching girls. I tried few dating apps but use. As I am a introvert I don't like to go to parties but definitely become comfortable after knowing the other person. Currently in Bangalore but being from a remote area I don't feel comfortable approaching a girl. What should I do.
Ans: Dear Anonymous,

I understand how you are feeling. First of all, you are not alone in this. Secondly, it's time you recognize how much you have achieved in life. Kudos to that.

Now, coming to your concern, being an introvert is not an issue, though it comes with its own set of challenges. I understand that you feel shy when it comes to talking to women. That's where dating apps come in. You have seen no results on them; I hear you. But give it another try, but this time, with a fool-proof strategy. First off, write an appealing bio. It's equivalent to writing a cover letter- you put forward your best attributes and convince people why they should date you. You can mention your achievements, you can be honest and disclose that you are an introvert, mention what you have to offer as a partner and don't forget to mention what you are looking for in your partner. This would give your potential matches a concise idea of you and also help attract the right people. Second, display image matters. While I am not encouraging you to put up an over-edited picture hiding your imperfections, do not put up the worst one either. Make sure it's recent, decent, and of you and you alone, and not in a group. Third, if you like somebody, don't be afraid to send a message. You are not committing to them, nor do you have to see them in person. Leave a message, interact, only if things go well, meet in person. There's no rush and no prior commitment. Fourth and the most important one, be patient. The right match can take a while but when you do find them, it will be worth the wait.

Best Wishes!

Sushil Sukhwani  |306 Answers  |Ask -

Study Abroad Expert - Answered on Apr 22, 2024

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.


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