Dear Sir, My monthly income is 2.5 lac, savings include three land parcels (1.37 cr), mutual funds (43 lac), LIC (12 lac), and stocks worth 64 lac. I am not including PF in my saving. My liabilities include home loan emi 60k per month (58 lac outstanding) and emi of personal loan 40k per month (16 lac outstanding). Please note that i have not included my ancestral property (aaprox 4cr) back in my home town and my current house (1.2cr) in delhi as my investment and am not intended to sell them. I am doin SIP of 50k month in mutual fund as well. Please suggest if i should prepay my loans (14 years remaining in both) my disposing off my real estate assets, or by selling my mutual funds and stocks, or should continue to pay the emi.. I am a 39 year old workin in private sector.

Ans: Hello;

You must definitely prepay your outstanding loans as much as possible.

With the current corpus you can repay personal loan entirely and more then 50% of the outstanding home loan.

You may reduce the EMI on home loan by keeping the tenure same.

This will ensure more investible surplus available for investments into MFs, NPS, PPF, Gold and Bank FDs for your financial goals.

Best wishes;

Ans: You have made a disciplined start towards financial planning. Your family responsibilities are being handled well, especially your daughter’s SSY and the insurance covers.

Let us now assess your current financial picture, and explore suitable action points.

Income, Expenses and Loan Burden
Your monthly income is Rs. 1.25 lakh.

Plot loan EMI is Rs. 23,000. Personal loan EMI is Rs. 28,000.

Total EMI is Rs. 51,000 per month. That is 40% of your income.

This is a high EMI-to-income ratio. It limits your flexibility.

Your monthly SIP is Rs. 10,000. SSY is Rs. 12,000 per month.

You save Rs. 10,000 monthly after all these.

Your committed outflow is around Rs. 83,000 monthly. This needs careful planning.

Assessment of Your Loans
Personal loan is expensive. Tenure is short. EMI is high.

Plot loan is long-term. EMI is moderate. But interest rate is also high.

Personal loan is not asset-backed. Interest is high without tax benefit.

Plot loan is secured. Interest is also high but offers tax benefit.

Total outstanding loan is Rs. 34 lakh. That is 27 times your monthly income.

This is a financial stress point. Needs correction step-by-step.

Investments and Insurance Review
Mutual fund + stocks total is Rs. 6 lakh.

Emergency fund is Rs. 3 lakh. You are well-covered for 3 months' expenses.

SSY corpus is Rs. 3 lakh. A good start for your daughter.

Term insurance of Rs. 1.5 crore is ideal. You are rightly covered.

Health insurance of Rs. 15 lakh is sufficient for now. Good family protection.

LIC policy of Rs. 8 lakh sum assured, with Rs. 36,000 premium yearly.

LIC plans are low-yield. You may evaluate this further.

Your Financial Strengths
You are consistently saving. That is a great habit.

You have SSY for your daughter. A strong step as a father.

You have term and health covers. Risk management is in place.

You have SIP in mutual funds. You are investing for the future.

Emergency fund of Rs. 3 lakh gives you safety.

Your Financial Pressure Points
Two large loans are a burden. EMI eats away 40% income.

Personal loan interest is costly. It slows down wealth growth.

LIC policy is eating Rs. 3,000 monthly. Returns are not linked to inflation.

Limited surplus for investments due to EMI load.

Equity investments are just Rs. 6 lakh. Needs increase over time.

Ideal Action Plan — Step-by-Step
1. Personal Loan Repayment First

This loan is costlier than plot loan.

It has short tenure. Paying extra saves more.

Use monthly savings of Rs. 10,000 to prepay personal loan.

Do not increase SIP now. Prioritise debt clearance.

Even a partial prepayment every 6 months will help.

2. Stop LIC Policy After Evaluation

LIC gives low returns. Around 4–5% annually.

You are already insured through term policy.

If this LIC is not a pension or ULIP, consider surrender.

Use surrender value to prepay personal loan or invest in mutual funds.

Reinvesting this Rs. 36,000 annual premium in mutual funds is better.

3. Hold SIP Steady, Don’t Increase Yet

You are investing Rs. 10,000 per month in SIP. Keep it unchanged.

Do not stop or reduce SIP unless emergency arises.

Use only savings and LIC money for loan prepayment, not SIP money.

Your SIP should continue to compound long-term.

4. SSY Contribution is Mandatory

Rs. 12,000 monthly SSY for daughter is locked-in. That’s fine.

This is a social commitment. Let it continue.

It will create a corpus at her age 21. Don’t disturb this.

5. Keep Emergency Fund Intact

You have Rs. 3 lakh emergency fund.

That covers 3 months' expenses. Good decision.

Do not use this for loan prepayment or investment.

Keep it in a liquid fund or sweep-in FD for access.

6. Avoid Direct Stocks or High-Risk Assets Now

You already hold Rs. 6 lakh in MF and stocks.

Stocks are volatile. You are in a debt-heavy phase.

Avoid buying more stocks till loans are reduced.

Focus on debt reduction, not aggressive returns.

7. No New Loans or Commitments

No gold loan, credit card EMI, or gadgets on EMI.

No car loan or new real estate plan.

Avoid real estate as investment. It's illiquid and costly.

Your plot is for long term. Keep it that way.

8. Regular Fund Investments Preferred

You may have SIPs in direct plans. These look cheaper.

But direct funds do not offer advice or personal review.

Wrong fund choice in direct plan can lower returns.

Regular plans via CFP-backed MFD ensure guidance and tracking.

Long-term returns improve with portfolio review and timely changes.

9. Stay with Actively Managed Mutual Funds

Index funds may look simple and low-cost.

But index funds lack flexibility. They mimic the market.

In falling markets, index funds fall fully. No downside protection.

Actively managed funds give better defence and opportunity.

Let fund managers make dynamic decisions for better outcomes.

10. Monitor and Review Every 6 Months

Keep track of loan balances and interest saved.

Review SIPs and funds with CFP every 6 months.

Check if additional surplus can be used to prepay loans.

Once personal loan is cleared, divert that EMI into SIP.

Over time, increase SIP to Rs. 20,000 monthly.

11. Children’s Education Plan Later

Your daughter’s SSY is a good start.

After clearing personal loan, build an education fund.

Begin with Rs. 5,000 monthly SIP when surplus increases.

Use child-specific mutual funds with 10–12 year horizon.

12. Retirement Planning from Age 40

You are 36 now. Clear loans in 3–4 years.

From age 40, begin long-term retirement SIPs.

SIP of Rs. 20,000 monthly for 20 years builds good retirement wealth.

Delay in retirement planning can lead to pressure later.

13. Avoid Frequent Changes or Panic

Stick to your strategy. Be consistent.

Don’t stop SIP during market fall.

Don’t switch funds without reason or advice.

Avoid short-term goals with equity mutual funds.

14. Use Surplus Cash or Bonus Wisely

Use any annual bonus to prepay loans.

Avoid spending bonus on lifestyle upgrades.

Any maturity from LIC or FD should go to loan or SIP.

15. Tax Planning Must be Optimised

You are investing in SSY, ELSS may be part of SIP.

Avoid traditional plans for tax benefit alone.

Use term plan and ELSS for tax and growth.

Finally
You are already making smart money choices. That’s encouraging.

Clear personal loan first. It frees up cash and mind.

LIC surrender and reinvestment improves returns.

Keep SIPs running. Keep SSY untouched.

Increase SIP later with surplus from EMI reduction.

Build a child education fund post-loan closure.

Retirement savings can start at age 40 with higher SIP.

Don’t invest in real estate now. Avoid gold loans and credit EMIs.

Review your financial plan with a Certified Financial Planner every 6 months.

Your journey is strong. With right steps, you will create lasting wealth.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: Current Financial Position and Investment Overview
– You earn Rs. 2?lakh monthly.
– Your wife is a homemaker; no other income is mentioned.
– EMI for your home is Rs. 30?k (loan of Rs. 35?lakh).
– You save Rs. 48?k every month.

Mutual Fund SIPs: Rs. 37?k

Sukanya Samriddhi: Rs. 1?k

NPS: Rs. 5?k

VPF: Rs. 5?k
– You have Rs. 10?lakh in fixed deposits (FD).
– You are investing across equity and fixed-income avenues.
– You desire proper planning for kids’ education and safe retirement.

I appreciate your disciplined saving and investment habit.
Your mix of equity SIP, retirement contributions, and fixed deposits is good.
Now we need to sharpen the strategy for higher returns and debt freedom.

Home Loan Prepayment: Assess Before Acting
– You have Rs. 10?lakh in FD.
– EMI of Rs. 30?k is manageable with your income.
– But prepaying can reduce interest cost.
– Check current home loan interest rate.
– If above 8.5–9%, consider prepayment.
– If below 7.5–8%, prepayment gives little benefit.
– If loan tenure is shorter, focus on investments instead.

– Can use part of FD (say 4–5?lakh) to prepay now.
– Use future surplus monthly savings for more prepayment.
– Even quarterly prepayments can shorten tenure meaningfully.
– Before using FD, set aside 3–4 months of household expense as emergency.
– This protects family if income stops.

Equity SIPs: Keystones for Wealth
– You invest Rs. 37?k across equity categories.
– Fund division: Rs. 5?k balance dynamic, Rs. 5?k mid?cap, Rs. 20?k large?cap, Rs. 7?k small?cap.
– This shows strong equity exposure.

– Equity is best for long-term goals like education and retirement.
– But fund mix needs review.
– Balance dynamic or flexi?cap funds handle opportunities across market cycles.
– Too much small?cap may increase volatility.
– Large?cap funds give stability with growth.
– A good equity allocation could be 50% large?cap, 30% multi?cap, 20% mid?small?cap.

– Ensure you invest in regular mutual fund plans via CFP?approved MFD.
– Direct funds lack handholding and periodic review.
– Regular funds provide guidance, periodic rebalancing and behaviour control.

– You have a good SIP habit.
– But consider annual step?up of Rs. 5–10?per cent.
– As income increases, boost SIPs accordingly.
– This powers compounding for both kids’ goals and retirement.

Retirement Contributions: NPS and VPF
– NPS monthly contribution is Rs. 5?k.
– VPF is Rs. 5?k per month.
– These are disciplined approaches to retirement.

– VPF grows with a stable interest rate.
– It offers tax efficiency and final accumulation.
– Keep contributing till your retirement.

– NPS has equity option inside.
– Its maturity lump sum and annuity have tax efficiency.
– Continue NPS to strengthen retirement corpus.

– These fixed?income tools balance your equity exposure.
– They also ease risk near retirement.

Sukanya Samriddhi Scheme: Good for Girl Child’s Benefit
– You invest Rs.?1?k per month in Sukanya Samriddhi.
– It provides safe and tax?free returns.
– Good for long?term goals like your daughters’.

– Keep this account active.
– With current rate (7.6% approx), it grows well.
– You can increase contribution gradually as income rises.

Fixed Deposit Corpus: Review and Reallocate
– You hold Rs. 10?lakh in FD.
– This is safe but yields low real return.
– Post?tax, FD returns may not beat inflation.
– Instead, consider shifting some FD to conservative hybrid or debt fund.

– Use Systematic Transfer Plan (STP) of Rs. 50?k per month from FD to debt fund for 20 months.
– This smooths market entry and enhances returns.
– Keep Rs. 3–4?lakh in FD for emergencies.

Education Planning for Two Kids
– Kids are aged 10 and 5.
– Higher education likely starts from age 17–18 onwards.
– Elder child has about 7–8 years.
– Younger child has about 12–13 years.

– Education inflation runs higher than general inflation.
– Corpus requirement is large.
– Use goal?specific mutual fund folios for each child.
– For elder child, shift gradually to hybrid/debt funds by age 15.
– For younger child, keep equity allocation longer.
– Increase dedicated SIPs annually.
– Consider at least Rs. 10?k/month each per child.

– Sukanya Samriddhi and general investments together can cover cost.
– Regular review every year is important.
– Adjust corpus needed using updated fees and inflation rates.

Retirement Goal: Safe And Comfortable
– You plan for a safe retirement corpus.
– You have 16–17 years until retirement.
– Equity SIPs, NPS, VPF, and Sukanya scheme all add to creation.

– Use actively managed funds for flexibility and downside protection.
– Avoid index funds which just track market.
– Active funds offer tactical asset reallocation.

– Systematically shift equity to hybrid from age 55 onward.
– Maintain equity component post?retirement (~40–50%) for growth.
– Use SWP from hybrid and debt funds for monthly income.
– VPF and Sukanya withdrawals post?retirement are tax?efficient.

Tax Implications with Mutual Fund Withdrawals
– Equity funds LTCG above Rs. 1.25?lakh taxed at 12.5%.
– STCG at 20%.
– Debt fund gains taxed as per your slab.

– For kids’ education corpus, redeem gradually to avoid LTCG tax above exemption limit.
– For retirement corpus, plan SWP so you incur minimal LTCG each year.

Insurance and Emergency Buffer
– You have not mentioned term or health insurance.
– Ensure you hold adequate term cover for you and wife.
– Health cover for family is also essential.

– Keep emergency fund equal to 6 months of monthly expenses.
– This avoids forced withdrawal during emergencies.
– Use a liquid fund or short?term FD for this buffer.

Continuing Review and Rebalancing
– Review portfolio allocation every year.
– Track goals, fund performance and inflation.
– Rebalance equity/debt ratios accordingly.
– Step?up SIPs each year in line with salary increments.
– A Certified Financial Planner can guide this journey.

Final Insights
– Your monthly savings habit is strong and impressive.
– Prepayment of home loan can be done partly from FD if interest is high.
– Equity SIPs must continue with periodic increase.
– Retirement instruments like VPF and NPS are well utilized.
– Sukanya Samriddhi is a good add?on for daughters.
– FD corpus should be partially shifted to hybrid mutual funds.
– Clear goal?specific folios for kids’ education and retirement will improve clarity.
– Use actively managed funds for better performance and flexibility.
– Systematic step?up, prepayment, and asset rebalancing will build good corpus.
– Your planning can ensure both kids’ education and safe post?retirement life.

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

Ans: You are managing multiple loans and investments. Now let's work on a complete 360-degree solution for better financial management.

Understanding Your Current Financial Situation
– You are 39 years old with retirement in April 2046.
– You earn Rs 1.06 lakh monthly, which is a decent income.
– Your home loan is Rs 62 lakh with Rs 50,000 EMI for 20 years.
– You also have another home loan of Rs 11.8 lakh with Rs 19,000 EMI for 7 years.
– Your total EMI burden is Rs 69,000 monthly.

– PPF balance is Rs 1 lakh and Sukanya Samriddhi is Rs 2.2 lakh.
– You have Rs 21.8 lakh in NPS.
– Equity investments are around Rs 1.5 lakh.
– A SIP of Rs 10,000 started recently, which is a good step.
– You receive Rs 1 lakh yearly income from dry land.
– You also hold 3 plots now valued at Rs 75 lakh.

Your family consists of your spouse, son in 7th class, and daughter in 1st class.

Assessing Your Current Cash Flow
– Total EMI is Rs 69,000 out of Rs 1.06 lakh income.
– This leaves you with only around Rs 37,000 for all other expenses.

If your monthly expenses are higher, your savings will suffer.
So, your loans are eating a big part of your income now.

Analysing the Home Loans in Detail
Home Loan 1: Rs 62 Lakh, 240 Months
– EMI started in May 2025, EMI is Rs 50,000.
– This is a long-term loan, so interest outgo is large.

Home Loan 2: Rs 11.8 Lakh, 84 Months
– EMI is Rs 19,000, with 7-year tenure.
– This is a smaller and shorter loan.

Which Loan to Prepay First?
– Always prepay the small loan first.
– Prepay the Rs 11.8 lakh loan faster.
– This will free up Rs 19,000 EMI within 3 to 4 years.
– After clearing it, you can focus on the bigger loan.

Managing Investments and Loans Simultaneously
Don’t stop all your investments to pay loans.
But also don’t invest heavily while loans are pending.

Split your surplus cash wisely:

– Use part of your dry land income to prepay the small home loan.
– Use any yearly bonuses and incentives for loan prepayment.
– Don’t use equity or PPF for loan repayment now.

Your SIP of Rs 10,000 should continue.
This builds wealth for long-term goals.

Building Your Emergency Fund First
Before prepaying loans, build an emergency fund.
Keep at least 6 months of household expenses.

Park this in a liquid mutual fund or sweep-in FD.

This gives financial protection during job loss or medical issues.

Reviewing Your Insurance Cover
Check if you have pure term life insurance.
If not, buy it immediately for Rs 75 lakh to Rs 1 crore.

This will protect your family during your loan tenure.

Don’t mix insurance with investments like ULIPs.
Buy health insurance for the full family if not done yet.

Managing Existing Investments Wisely
– PPF and Sukanya are for long-term goals. Continue them yearly.
– NPS will support your retirement. Don't withdraw it early.
– Equity holding is small. Don't sell it now. Let it grow.

Your SIP of Rs 10,000 is a good start.
Keep increasing it by 10% every year.

Don’t stop mutual fund SIPs while paying loans.
You need both loan clearance and wealth creation together.

Avoiding Real Estate as an Investment
Your 3 plots have grown in value from Rs 33 lakh to Rs 75 lakh.
But plots don’t give regular income.

If you plan to use them for selling later, it is fine.
But don’t buy new plots for investment.

Real estate is illiquid and takes time to sell.
Also, managing dry land is not a consistent income source.

Future savings should focus on mutual funds, not plots or land.

Making Use of Dry Land Income
The Rs 1 lakh yearly income from land is helpful.

Use this income as below:

– 50% towards emergency fund and loan prepayment.
– 50% towards child’s future or your SIP top-up.

This way your passive income is also working for your goals.

Children’s Education Planning
Your son is in 7th class. Daughter in 1st class.

Their higher education will cost more in 7 to 10 years.

Start separate SIPs for their college education.
Allocate at least Rs 5,000 to Rs 7,500 for each child’s goal.

Mutual funds help beat inflation over the long term.

Don’t rely on Sukanya Samriddhi alone for your daughter.
It is safe but offers lower growth compared to equity mutual funds.

Retirement Planning Perspective
Your retirement is 21 years away in 2046.

NPS corpus is building well. Continue regular contributions.

Along with NPS, grow your equity mutual fund investments.
They will give higher growth in your working years.

Later, shift to balanced funds closer to retirement.

Cash Flow Management Month by Month
Your cash flow is tight due to high EMIs.

Try this plan:

– Household and lifestyle expenses: Rs 30,000 to Rs 35,000.
– EMIs: Rs 69,000.
– SIPs: Rs 10,000.
– Emergency fund build-up: Rs 2,000 to Rs 5,000.

If expenses exceed this, cut down on lifestyle spends.
Postpone luxury buys and vacations for 3 to 4 years.

Suggested Loan Prepayment Strategy Timeline
Year 1 to 4:

– Build emergency fund first.
– Prepay the small home loan slowly.
– Try to clear the Rs 11.8 lakh loan in 4 years.

Year 5 onwards:

– Focus on the Rs 62 lakh loan.
– Increase prepayment using the freed Rs 19,000 EMI.
– Target to close it in 10 to 12 years instead of 20.

This reduces your debt burden before retirement.

Should You Sell the Plots?
Don’t sell them immediately unless facing a cash crunch.
Plots have appreciated well and may grow further.

But if your cash flow becomes very tight, sell one plot.
Use the sale proceeds to clear the bigger home loan partly.

Selling plots reduces your interest burden faster.

Discuss this step with a Certified Financial Planner before selling.

Future Financial Milestones to Focus On
– Build Rs 5 lakh emergency fund in 3 years.
– Clear the small home loan in 4 years.
– Increase your SIPs gradually to Rs 20,000 monthly.
– Build your children's higher education fund in 10 years.
– Clear the big home loan 5 years before retirement.
– Build a retirement corpus to cover 25 to 30 years post-retirement.

Why You Shouldn’t Pause SIPs for Loans
Some people pause SIPs to repay loans fast.
This is wrong because they lose long-term compounding.

Keep your SIPs running while prepaying loans side by side.
This balance builds both wealth and peace of mind.

Avoid Index Funds and Direct Funds
Don’t choose index funds.

– Index funds blindly follow the market.
– They don’t protect you in market crashes.
– Actively managed funds give better long-term results.

Also, avoid direct mutual funds.

– Direct funds give no expert guidance.
– You will be confused during market falls.

Instead, invest in regular funds through an MFD holding CFP credential.
They provide handholding, monitoring, and rebalancing.

This is very important for a working family man like you.

Keeping a Long-Term View
Don’t get stressed by your present EMI load.
In 3 to 5 years, your cash flow will ease.

Your children’s education, your retirement, and a debt-free life are achievable.
Stay disciplined and avoid distractions like real estate investments.

Finally
Your financial journey has good foundations already.
Two things need improvement now. First, your high loan burden. Second, consistent wealth creation.

Take these steps next:

– Focus first on clearing the small home loan in 4 years.
– Continue SIPs and grow them over time.
– Avoid any more real estate purchases.
– Use dry land income wisely for wealth building and debt clearing.
– Review your plan yearly with a Certified Financial Planner.

In the long term, you will achieve both debt freedom and wealth growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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