Mera monthly income 87000 hai maine 35 lac ka home loan liya hai 7% ki dar se liya tha ab 9% ho gaya hai.monthly emi 31041 katata hai.20 sal ke liye hai lic se.mai jyada amount jama keru ya kahi invest Karu plz sujhaw de

Ans: Given your situation, it's crucial to strike a balance between repaying your home loan and investing for the future. Here are some suggestions:

1. Evaluate your financial goals: Determine your short-term and long-term financial goals, such as retirement planning, children's education, and emergency funds.
2. Assess your risk tolerance: Consider your risk tolerance before making any investment decisions. Evaluate whether you're comfortable with taking on additional risk for potentially higher returns.
3. Review your home loan: With the increase in interest rates, consider refinancing your home loan to secure a lower interest rate, which could reduce your monthly EMI burden.
4. Build an emergency fund: Ensure you have a sufficient emergency fund to cover unexpected expenses, typically three to six months' worth of living expenses.
5. Consider investing: If you have surplus funds after meeting your expenses and building an emergency fund, consider investing in diversified assets like mutual funds, stocks, or fixed-income instruments. These investments have the potential to generate higher returns over the long term.
6. Consult a financial advisor: It's advisable to seek guidance from a certified financial planner (CFP) who can assess your financial situation holistically and provide personalized advice based on your goals, risk tolerance, and investment horizon.
7. Prioritize debt repayment: While investing is essential, prioritize repaying high-cost debt like your home loan. Consider making partial prepayments towards your loan to reduce the interest burden and shorten the loan tenure.
8. Regularly review your finances: Keep track of your income, expenses, investments, and debt obligations regularly. Periodically review your financial plan to ensure it aligns with your evolving goals and circumstances.
Remember, financial planning is a dynamic process that requires regular monitoring and adjustments. By making informed decisions and seeking professional advice, you can work towards achieving your financial objectives.

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

Ans: You have shared openly about your income, expenses, loans, and investments.

That helps in offering clear and useful recommendations.

Below is a detailed 360-degree review and action plan.

Income and Cash Flow Overview

Monthly salary is Rs. 1.47 lakhs.

Current fixed monthly outflow is about Rs. 85,000.

This includes all EMIs, LIC premium, expenses, and family support.

You are saving Rs. 7,000 monthly in mutual funds.

Cash surplus is around Rs. 55,000 per month.

It is good that you are already investing and sending support home.

But the loans and long tenure need careful attention.

Loan Assessment and Prioritisation

Home loan: Rs. 49.59 lakhs, 30-year tenure.

EMI details not shared. We assume approx. Rs. 38,000–Rs. 40,000 EMI.

Car loan EMI: Rs. 12,985. Will end in 2 years.

Personal loan: Rs. 4,000 EMI with Rs. 86,000 balance. Low balance.

Home loan interest is usually lowest. So pay other loans first.

First, close the personal loan fully using existing FD.

Rs. 86,000 can be paid from the Rs. 3 lakh FD.

This will save interest and reduce EMI load.

Car loan has 2 years left. Consider closing in the next 6–9 months.

Don’t touch all your FDs at once. Emergency fund is important.

For home loan, don’t rush closure immediately.

Focus on building fund first and invest smartly.

Emergency Fund Planning

Ideal emergency fund: 6 to 9 months of expenses.

Your current fixed monthly cost is Rs. 85,000.

Emergency fund required is Rs. 5 lakhs to Rs. 7.5 lakhs.

From your existing FDs of Rs. 20 lakhs, keep Rs. 7.5 lakhs aside.

This fund should be kept in a separate bank account.

Use sweep-in FD or liquid mutual fund to earn returns.

Emergency fund gives peace of mind and avoids future debt.

Review of Existing Fixed Deposits

You hold FDs of Rs. 10 lakhs, Rs. 7 lakhs, and Rs. 3 lakhs.

Keep Rs. 7.5 lakhs as emergency fund as discussed.

Use Rs. 86,000 from Rs. 3 lakh FD to close personal loan.

Remaining approx. Rs. 12.5 lakhs can be reinvested.

FD interest is taxable. Returns are around 5–6% post tax.

Long-term wealth creation needs better options.

You can invest in mutual funds with a longer horizon.

Systematic Transfer Plan (STP) from liquid fund to equity is better.

Mutual Fund Strategy – Need to Scale Up

Monthly SIP is Rs. 7,000. Total corpus is not shared.

With Rs. 1.47 lakh income and Rs. 55,000 surplus, SIP can increase.

Step up SIP gradually to Rs. 20,000 over 6–12 months.

You may follow below breakup:

Rs. 8,000 in large cap

Rs. 4,000 in flexi cap

Rs. 4,000 in multi-cap

Rs. 4,000 in mid cap

Avoid small cap at this stage due to higher volatility.

Avoid index funds. They track the market but can’t beat it.

Index funds don’t have downside protection.

They lack active fund manager expertise.

Actively managed funds adjust to market cycles.

They reduce risk and enhance performance.

Direct mutual funds may appear cheaper but can be risky.

Without guidance, mistakes are common.

Choosing and rebalancing direct funds is not easy.

It is better to invest through a Certified Financial Planner.

Regular mutual funds via a CFP-managed MFD offer better handholding.

It ensures suitability, reviews, and adjustments as per your goals.

LIC and Insurance Coverage

You pay Rs. 2,800 per month for term insurance.

This is good. Continue this without any changes.

LIC premium of Rs. 45,000 yearly is a concern.

LIC traditional plans give low returns (4% to 5%).

Check if any of these are ULIP or Endowment plans.

Surrender them only if minimum years are over.

Reinvest that amount in mutual funds after careful analysis.

Insurance and investment must be kept separate.

Home Loan Strategy and Early Closure

Many feel early closure of home loan is best.

But this needs to be balanced with other goals.

Your home loan interest is likely lowest among all debts.

Instead of full prepayment now, start a separate fund.

Create a “Home Loan Prepayment Fund”.

Invest Rs. 20,000 monthly into a balanced fund.

After 3–4 years, use the amount to part pay the loan.

This gives better returns than FD or loan prepayment now.

Don’t compromise emergency fund or investment for EMI savings.

Regular part payments every 1–2 years help reduce tenure.

This gives both flexibility and tax benefits.

Provident Fund and Retirement

PF corpus is Rs. 2.5 lakhs.

Continue your monthly contributions.

Do not withdraw PF even during financial pressure.

Let this grow for retirement.

It offers safe, long-term and tax-free returns.

Support to Family and Monthly Expenses

Rs. 15,000 sent home monthly. Keep continuing as per family need.

Rs. 41,000 for grocery, travel, and expenses is acceptable.

Try to track and reduce unnecessary spends.

Use simple tools like Excel or app to budget.

Saving Rs. 5,000 more monthly helps in long term.

Suggested Monthly Allocation Going Forward

Let’s assume you build Rs. 7.5 lakhs emergency fund and close personal loan.

Here is an ideal monthly plan:

Home Loan EMI: Rs. 38,000

Car Loan EMI: Rs. 12,985

LIC Premium (average monthly): Rs. 3,750

Term Insurance: Rs. 2,800

Family Support: Rs. 15,000

Expenses: Rs. 41,000

SIP in Mutual Funds: Rs. 15,000

Home Loan Prepay Fund SIP: Rs. 15,000

Total: Rs. 1,43,535

Surplus: Rs. 3,000 buffer monthly for flexibility

Finally

You have steady income, good saving habit, and valuable assets.

Closing small loans first is more efficient.

Keep strong emergency fund. Don’t skip this step.

Grow your investments smartly with proper asset allocation.

Don't rush to close home loan fully now.

Use SIP and part payments every few years.

Stay away from direct funds or index funds.

Seek help from a Certified Financial Planner for better guidance.

This gives clarity, confidence, and better wealth growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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