I'm 45, earn 2.7L. Can I end my 63L loan in 8 yrs & save?

I have a home loan of 63 lakhs, current Emi 90 k per month.Want to repay it within 8 years. I am 45 years old with a Lic of 10 k, 35 k Mutual fund every month. How to increase my savings while paying the loan.My current salary is 2.70 per month.

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: You have built a strong base. You have raised your sons well. They live independently. You and your wife now want a peaceful and enjoyable retired life. You have created wealth with discipline. You have no home loan. You live in your own house. This gives strength to your cash flow. Your savings across equity, mutual funds, and bank deposits show good clarity. I appreciate your careful preparation. You deserve a happy retired life with travel and comfort.

» Your Present Position
Your current financial position looks very steady. You hold direct equity of around Rs 2.5 Cr. You hold equity mutual funds worth Rs 50 lakh. You also have Rs 50 lakh in bank deposits and other secured savings. Your two rental properties add more comfort. You earn around Rs 40,000 per month from rent. You also live in your owned house in Delhi NCR. So you have no rent expense.

Your total net worth crosses Rs 5.5 Cr easily. This gives you a strong base for your retired life. You plan to spend around Rs 24 lakh per year for all expenses, including travel. This is reasonable for your lifestyle. Your savings can support this if planned well. You have built more than the minimum needed for a comfortable retired life.

» Your Key Strengths
You already enjoy many strengths. These strengths hold your plan together.

You have zero housing loan.

You have stable rental income.

You have children living independently.

You have a balanced mix of assets.

You have built wealth with discipline.

You have clear goals for travel and lifestyle.

You have strong liquidity with Rs 50 lakh in bank and secured savings.

These strengths reduce risk. They support a smooth retired life with less stress. They also help you handle inflation and medical costs better.

» Your Cash Flow Needs
Your yearly expense is around Rs 24 lakh. This includes travel, which is your main dream for retired life. A couple at your stage can keep this lifestyle if the cash flow is planned well. You need cash flow clarity for the next 30 years. Retirement at 56 can extend for three decades. So your wealth must support you for a long period.

Your rental income gives you around Rs 4.8 lakh per year. This covers almost 20% of your yearly spending. This reduces pressure on your investments. The rest can come from a planned withdrawal strategy from your financial assets.

You also have Rs 50 lakh in bank deposits. This acts as liquidity buffer. You can use this buffer for short-term and medium-term needs. You also have equity exposure. This can support long-term growth.

» Risk Capacity and Risk Need
Your risk capacity is moderate to high. This is because:

You own your home.

You have rental income.

Your children are financially independent.

You have large accumulated assets.

You have enough liquidity in bank deposits.

Your risk need is also moderate. You need growth because inflation will rise. Travel costs will rise. Medical costs will increase. Your lifestyle will change with age. Your equity portion helps you beat inflation. But your equity exposure must be managed well. You should avoid sudden large withdrawals from equity at the wrong time.

Your stability allows you to keep some portion in equity even during retired life. But you should avoid excessive risk through direct equity. Direct equity carries concentration risk. A balanced mix of high-quality mutual funds is safer in retired life.

» Direct Equity Risk in Retired Life
You hold around Rs 2.5 Cr in direct equity. This brings some concerns. Direct equity needs frequent tracking. It needs research. It carries single-stock risk. One mistake may reduce your capital. In retired life, you need stability, clarity, and lower volatility.

Direct funds inside mutual funds also bring challenges. Direct funds lack personalised support. Regular plans through a Mutual Fund Distributor with a Certified Financial Planner bring guidance and strategy. Regular funds also support better tracking and behaviour management in volatile markets. In retired life, proper handholding improves long-term stability.

Many people think direct funds save cost. But the value of advisory support through a CFP gives higher net gains over long periods. Direct plans also create more confusion in asset allocation for retirees.

» Mutual Funds as a Core Support
Actively managed mutual funds remain a strong pillar. They bring professional management and risk controls. They handle market cycles better than index funds. Index funds follow the market blindly. They do not help in volatile phases. They also offer no risk protection. They cannot manage quality of stocks.

Actively managed funds deliver better selection and risk handling. A retiree benefits from such active strategy. You should avoid index funds for a long retirement plan. You should prefer strong active funds under a disciplined review with a CFP-led MFD support.

» Why Regular Plans Work Better for Retirees
Direct plans give no guidance. Retired investors often face emotional decisions. Some panic during market fall. Some withdraw heavily during market rise. This harms wealth. Regular plan under a CFP-led MFD gives a relationship. It offers disciplined rebalancing. It improves long-term returns. It protects wealth from poor behaviour.

For retirees, the difference is huge. So shifting to regular plans for the mutual fund portion will help long-term stability.

» Your Withdrawal Strategy
A planned withdrawal strategy is key for your case. You should create three layers.

Short-Term Bucket
This comes from your bank deposits. This should hold at least 18 to 24 months of expenses. You already have Rs 50 lakh. This is enough to hold your short-term cash needs. You can use this for household costs and some travel. This avoids panic selling of equity during market downturn.

Medium-Term Bucket
This bucket can stay partly in low-volatility debt funds and partly in hybrid options. This should cover your next 5 to 7 years. This helps smoothen withdrawals. It gives regular cash flow. It reduces market shocks.

Long-Term Bucket
This can stay in high-quality equity mutual funds. This bucket helps beat inflation. This bucket helps fund your travel dreams in later years. This bucket also builds buffer for medical needs.

This three-bucket strategy protects your lifestyle. It also keeps discipline and clarity.

» Handling Property and Rental Income
Your properties give Rs 40,000 monthly rental. This helps your cash flow. You should maintain the property well. You should keep some funds aside for repairs. Do not depend fully on rental growth. Rental yields remain low. But your rental income reduces pressure on your investments. So keep the rental income as a steady support, not a primary source.

You should not plan more real estate purchase. Real estate brings low returns and poor liquidity. You already own enough. Holding more can hurt flexibility in retired life.

» Planning for Medical Costs
Medical costs rise faster than inflation. You and your wife need strong health coverage. You should maintain a reliable health insurance. You should also keep a medical fund from your bank deposits. You may keep around 3 to 4 lakh per year as a buffer for medical needs. Your bank savings support this.

Health coverage reduces stress on your long-term wealth. It also avoids large withdrawals from your growth assets.

» Travel Planning
Travel is your main dream now. You can plan your travel using your short-term and medium-term buckets. You can take funds annually from your liquidity bucket. You can avoid touching long-term equity assets for travel. This approach keeps your wealth stable.

You should plan travel for the next five years with a budget. You should adjust your travel based on markets and health. Do not use entire gains of equity for travel. Keep travel budget fixed. Add small adjustments only when needed.

» Inflation and Lifestyle Stability
Inflation will impact lifestyle. At Rs 24 lakh per year today, the cost may double in 12 to 14 years. Your equity exposure helps you beat this. But you need careful rebalancing. You also need disciplined review with a CFP-led MFD. This will help you manage inflation and maintain comfort.

Your lifestyle is stable because your children live independently. So your cash flow demand stays predictable. This makes your plan sustainable.

» Longevity Risk
Retirement at 56 means you may live till 85 or 90. Your plan should cover long years. Your total net worth of around Rs 5.5 Cr to Rs 6 Cr can support this. But you need a proper drawdown strategy. Avoid high withdrawals in early years. Keep your travel budget steady.

Do not depend on one asset class. A mix of debt and equity gives comfort. Keep your bank deposits as cushion.

» Succession and Estate Planning
Since you have two sons who are settled, you can plan a clear will. Clear distribution avoids conflict. You can also assign nominees across accounts. You can also review your legal papers. This gives peace to you and your family.

» Summary of Your Retirement Readiness
Based on your assets and cash flow, you are ready to retire. You have enough wealth. You have enough liquidity. You have enough income support from rent. You also have good asset mix. With proper planning, your lifestyle is comfortable.

You can retire now. But maintain a disciplined withdrawal strategy. Shift more reliance from direct equity into professionally managed mutual funds under regular plans. Keep your liquidity strong. Review once every year with a CFP.

Your wealth can support your travel dreams for many years. You can enjoy retired life with confidence.

» Finally
Your preparation is strong. Your intentions are clear. Your lifestyle needs are reasonable. Your assets support your dreams. With a balanced plan, steady review, and mindful spending, you can enjoy a comfortable retired life with your wife. You can travel the world without fear of running out of money. You deserve this peace and joy.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

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