I took two loans to increase my CIBIL score and closed them within 6 months. My CIBIL score has dropped by 24 points from 761 because I closed two loan accounts within 6 months. What should I do now to increase my points?

Ans: Iiit allahabad btech

Ans: HI,
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Ans: HI,
1. CMR IS BIT DIFFICULT FOR ECE
2. CHANCES ARE THERE FOR ECE AT RNS.
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Ans: HI GOURAV,
NIT.

Ans: Hello dear
According to any institution's refund policy, a partial refund is possible if the withdrawal is made within the stipulated UGC timeline. Follow up consistently via email and, if necessary, escalate through their official grievance redressal channel. To withdraw admission and request a refund, you must follow their official admission cancellation process, which is not via the fresher's portal but through email as specified on their portal. Write an email including your son’s application number, registered email ID, and reason for withdrawal. Attach proof of fee payment and ID documents. Mention that you couldn’t find a withdrawal option on the portal and that calls haven’t been helpful. If possible, seek legal assistance and try to visit the institute in person for an early solution.

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Radheshyam

Ans: HI
A little challenging. Do participate in counseling process.

Ans: Your question is very timely and thoughtful.

You have already completed over one year of EMI payments.

You are also planning a Rs. 10 lakh prepayment in Jan 2026.

This shows strong discipline and intention to reduce debt early.

That is highly appreciated.

Let’s evaluate the benefit from all angles before making the decision.

Let’s assess your EMI schedule, tax benefits, interest savings, and liquidity needs.

We will also look at emotional peace, risk readiness, and overall financial health.

» EMI Tenure and Loan Progress

– Your loan began in April 2024. EMI is Rs. 30,600 for 10 years.

– By Jan 2026, you would have paid 21 EMIs. That is nearly 2 years of repayment.

– You would still have around 99 EMIs pending after Jan 2026.

– Most interest is paid in the first few years. That’s how home loan schedules work.

– So prepayment at this stage can save you substantial interest.

– But, the benefit must be compared with your other financial needs.

– This is not only about saving interest. It is about holistic financial planning.

» Interest Cost Evaluation and Savings Opportunity

– Your home loan interest rate is not mentioned. But let us assume a normal range.

– Most floating-rate loans now charge 8.5% to 9.5% annually.

– Prepaying Rs. 10 lakhs will reduce the outstanding principal sharply.

– As a result, the total interest over the loan period will reduce.

– You may save many lakhs over the long term by doing this early prepayment.

– You will also reduce your EMI period or future EMI amount.

– That helps you become debt-free faster.

– But, timing matters. January 2026 is still over 5 months away.

– You must consider where that Rs. 10 lakhs is now kept.

– Is it earning anything? If kept idle in savings, it gives low returns.

– In that case, prepayment gives better value.

– But if it is growing in mutual funds or long-term instruments, returns may be higher.

– Compare this interest cost versus what you earn from that Rs. 10 lakh.

– You must also think about safety, peace of mind, and future stability.

» Tax Benefits on Home Loan and Prepayment Impact

– Under Sec 24(b), you get deduction of up to Rs. 2 lakhs on home loan interest.

– This reduces your taxable income. Helps especially if you are in the 20% or 30% slab.

– Also, under Sec 80C, you get Rs. 1.5 lakh deduction for principal.

– But that Rs. 1.5 lakh 80C is usually covered by EPF, PPF, insurance, ELSS, etc.

– If you prepay Rs. 10 lakh, your interest in future years may fall.

– Then, the Rs. 2 lakh interest deduction under Sec 24(b) may not be fully used.

– But remember, you are spending Rs. 10 lakhs to save Rs. 2-3 lakhs of tax.

– That alone should not decide the choice.

– Interest saved is usually more than tax benefit lost in the long run.

– Prepayment still makes sense. But only if you are not compromising other goals.

– Always assess tax benefit as a secondary aspect, not the main reason.

» Your Liquidity and Emergency Readiness

– The biggest question is: Will you have enough money left after prepayment?

– Will you still have emergency funds of 6 to 12 months of expenses?

– Will you have cash for job loss, health issues, or family needs?

– Rs. 10 lakh is a big amount. Once paid, you cannot get it back easily.

– Banks do not refund prepayments. So you must be ready for cash crunch.

– If you have other liquid savings of at least Rs. 3 to 5 lakhs, then it is safe.

– But if this Rs. 10 lakh is your full backup, wait before prepaying.

– You must not become asset-rich but cash-poor.

– Also, do not disturb investments set for your long-term goals.

– Check how your mutual funds, PF, PPF, child goals, and retirement are aligned.

– Your financial safety net should never be at risk due to a home loan prepayment.

» Emotional Peace and Debt Reduction Mindset

– Paying off loans early gives peace of mind.

– Mentally, it feels lighter to reduce your EMI burden.

– For many families, freedom from loans matters more than returns from investment.

– If this Rs. 10 lakh is not required for your next 5 years, then prepaying is peaceful.

– But if the same money is helping you sleep better by keeping it in hand, wait.

– Your comfort and security are more important than any math.

– Financial planning is not only numbers. It is also emotional readiness.

– A good Certified Financial Planner balances both head and heart.

– If you feel better seeing lesser EMIs or faster closure, then go ahead with prepayment.

– If you fear losing liquidity or missing opportunities, then wait.

– In either case, the aim is to stay financially strong, not just interest-efficient.

» Other Choices to Use That Rs. 10 Lakh

– If you are not fully prepared for long-term goals, this Rs. 10 lakh may help.

– Retirement corpus, child education, spouse goals — all need investment.

– If those are underfunded, invest this Rs. 10 lakh in mutual funds.

– But not in index funds or direct funds.

– Index funds may look cheap, but they follow the market blindly.

– They underperform in volatile or sideways markets.

– Actively managed mutual funds by experienced managers adapt better.

– Direct funds also seem cheaper on surface.

– But there is no support, guidance, or review.

– Regular plans through a qualified MFD with CFP guidance add long-term value.

– The extra 0.5% cost gives better selection, periodic review, and mistake-avoidance.

– That brings better return than direct, unmanaged investing.

– So if you delay prepayment, don’t keep that Rs. 10 lakh idle.

– Put it to work through a long-term, diversified, tax-aware mutual fund portfolio.

– Match it to your goals, age, and risk appetite.

– Use only debt funds for less than 3 years. Use equity for more than 5 years.

– Also follow the updated capital gains tax rules now in force.

– These will apply when you exit mutual funds later.

– If this Rs. 10 lakh is not required in near future, investing may grow your wealth.

– If this feels unsafe, then home loan prepayment is still a good call.

» Ideal Approach Based on Situation

– If you have no major upcoming expense, then early prepayment is useful.

– If your emergency fund is untouched, then this move is secure.

– If your long-term goals are already funded, prepayment clears debt faster.

– If interest rate is above 9%, prepayment becomes even more beneficial.

– If job is stable and no income interruption is foreseen, go ahead.

– But if any of these are weak or uncertain, do not hurry.

– Wait for 6-12 months. Observe how rates, income, and expenses move.

– Meanwhile, invest that Rs. 10 lakh in a short-term fund with liquidity.

– Let that money earn better than savings account.

– If situation remains strong by Jan 2026, you may prepay with full confidence.

– Else, you can decide again at that point based on comfort and readiness.

– Either way, you are still progressing.

– Both options — prepayment or investing — are productive, if handled with thought.

» Finally

– You are thinking in the right direction. That’s the best start already.

– You are not ignoring the EMI burden. You want to plan ahead.

– That is very encouraging.

– Do not feel forced to prepay or delay.

– The right answer depends on your comfort, liquidity, and goals.

– Early prepayment is good if your financial base is ready.

– But there is no harm in waiting a few more months and reassessing.

– Peace and clarity are more important than urgency.

– You can also take part prepayment route. Pay Rs. 5 lakh in Jan 2026.

– Keep another Rs. 5 lakh for emergency or mutual fund.

– That brings the best of both.

– Stay debt-free, but also stay liquid and goal-focused.

– A Certified Financial Planner can help you model both paths and take balanced action.

– The right move is one that fits your full financial picture — not just the EMI part.

– Keep going strong.

– You are already ahead of many by asking this question today.

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

Ans: – You are managing family, career, and investments together.
– Starting SIP early is a very positive step.
– Taking responsibility for your brother’s treatment shows great strength.
– Planning coaching centre development is a wise idea.
– Having family health cover is also a good base already.

» Analysing the Loan and Its High Interest Rate

– Rs. 30 lakhs loan at 13% interest is quite costly.
– This means high EMI and high total interest outgo.
– Every rupee must be used carefully to avoid wastage.
– Unused funds from the loan must not sit idle.
– Interest burden will continue regardless of usage.

» Immediate Medical Emergency for Brother

– Rs. 10 lakhs for kidney transplant is necessary and unavoidable.
– Keep this amount fully liquid and easily accessible.
– Use savings account or short-term ultra-safe debt fund.
– Avoid locking this amount in business or market-linked funds.
– Medical treatment should be done on priority basis.

» Business Development – Coaching Centre Use

– This is an opportunity for future income growth.
– Plan expansion only after checking location demand.
– Avoid spending large amount at once.
– Phase out business investments over 6 to 12 months.
– Start with essentials like rent, furniture, and staff salary.
– Don’t overspend on branding or decoration initially.
– Use part of loan in setting up technology and marketing.
– Focus on breakeven as early as possible.

» Avoid Spending Full Loan Immediately

– You are not forced to use all Rs. 30 lakhs now.
– Keep a part of loan in low-risk parking place.
– Use short-term debt fund or liquid fund with no exit load.
– Withdraw when business or medical needs arise.
– Don’t allow funds to lie in savings account earning low interest.

» Do Not Use Any Amount for Consumption

– Don’t use loan money for personal luxury or lifestyle.
– No electronics, jewellery, or vehicles from this loan.
– You are paying 13% interest, use it only for value creation.
– Avoid giving any part of the loan to others as casual support.

» Managing EMI Alongside Household Budget

– EMI on Rs. 30 lakhs at 13% will be heavy.
– Your Rs. 75k salary will face pressure from EMI, SIP, and family.
– Keep fixed monthly expenses under tight control.
– Review all regular spends and cut non-essentials.
– Prioritise needs over wants for the next 2–3 years.
– Increase SIP only once your EMI is manageable.

» Continue SIP with Discipline

– Though amount is small, your SIP builds wealth habit.
– Don’t stop SIP even if budget becomes tight.
– Increase SIP slowly as income rises.
– Choose actively managed funds, not index funds.
– Index funds don’t protect during market fall.
– Active funds adjust to changes and give better protection.

» Direct Funds Are Not Ideal for You

– Avoid investing in direct mutual funds.
– You get no personalised support or guidance there.
– Wrong decisions can damage long-term wealth.
– Invest via regular plans with an MFD and CFP.
– Get full-time advice, updates, and goal tracking help.

» Emergency Fund is Missing

– You must keep Rs. 1–2 lakhs aside for emergencies.
– This should not come from loan amount.
– Build this over next few months from salary savings.
– Use high-liquidity options like liquid mutual funds or sweep FD.

» Child-Related Future Expenses

– You are expecting third child soon.
– Future expenses like education and health will increase.
– Avoid touching SIP or business funds for school fees.
– Plan separate SIPs for kids’ education goal later.
– Maintain health insurance with maternity cover wherever possible.

» Keep Personal and Business Accounts Separate

– Don’t mix business and personal funds.
– Create a separate bank account for coaching centre.
– Record all income and expense in simple format.
– Use business income to slowly repay loan too.

» Loan Repayment Should Be a Priority

– Try to repay part of loan early if possible.
– Business profit can be used to prepay some part.
– Even Rs. 2–3 lakhs paid early will reduce interest burden.
– Don’t wait for full term of loan.
– Avoid taking another loan till this one is cleared.

» Don’t Invest Remaining Loan in Risky Options

– Don’t try to grow loan money via equity investments.
– You are paying 13% interest.
– Most equity returns are not guaranteed and are market linked.
– If returns go down, you still pay full interest.
– Use loan only for fixed needs like business or treatment.

» Avoid Insurance-Cum-Investment Products

– Don’t use loan money for buying ULIPs or endowment plans.
– They give poor returns and lock your money.
– They mix insurance with investment, which is harmful.
– If you already hold such plans, review and consider surrender.
– Use that money in good mutual funds for better results.

» Long-Term Financial Strategy After Loan Use

– Once business is running, start surplus-based SIPs.
– Create specific SIPs for child education and retirement.
– Review insurance needs again after third child is born.
– Don’t over-rely on health cover from employer.
– Take term insurance separately for family safety.

» Monitoring and Support

– Review all goals every 6 months.
– Track loan balance, business income, SIP growth.
– A CFP can support you across all financial areas.
– Work with MFD for implementation and fund advice.

» Finally

– You are taking bold and smart steps under pressure.
– Rs. 10 lakhs for brother’s health is unavoidable.
– Use it only for that and keep it liquid.
– Use balance money gradually for coaching centre.
– Don’t spend full Rs. 30 lakhs in one go.
– Avoid luxury or emotional spending with loan money.
– Keep EMI low by avoiding misuse of loan.
– Continue SIP without fail.
– Avoid index funds and direct funds.
– Use only actively managed mutual funds through MFD.
– Repay loan as early as possible.
– Start new SIPs once income improves.
– Maintain strong financial habits and discipline.
– Your future will surely improve with right planning.

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

Ans: – You have built solid assets already. That shows strong commitment.
– Both of you save well and invest with structure.
– At age 38, with 17 years till retirement, your timing is perfect.
– Clear goals, solid income, and strong savings are a powerful combination.

» Snapshot of Your Current Financial Position

– Your monthly post-tax income is Rs 4.7 lakh.
– You spend only Rs 1.2 lakh. That means Rs 3.5 lakh is available monthly.
– That gives over 70% surplus. This is excellent.
– You already have Rs 50 lakh in mutual funds.
– PPF and PF combined give Rs 73 lakh in fixed-return debt instruments.
– Rs 23 lakh sits in fixed deposits as emergency funds.
– You have a Rs 50 lakh property that gives Rs 15,000 rent monthly.
– You also have an outstanding home loan of Rs 40 lakh.

» Income to Expense Ratio – Very Favourable

– Rs 4.7 lakh income and only Rs 1.2 lakh expenses means huge savings potential.
– Even with loan EMI, you can easily save Rs 2.5–3 lakh monthly.
– This level of saving makes your retirement goal very realistic.
– Increasing your monthly SIPs now will help later withdrawals to stay lower.

» Evaluating the Asset Allocation

– Your mutual fund exposure of Rs 50 lakh is solid for age 38.
– PPF and PF give safe long-term returns but have liquidity limits.
– FD corpus as emergency fund is rightly placed. Keep it untouched.
– Rental property gives low yield. Capital locked. Not flexible.
– Home loan is still running. Interest cost needs to be tracked.

» Rental Property – Keep Realistic Expectations

– Rs 50 lakh property gives Rs 15,000/month rent. That’s just 3.6% yearly yield.
– This is low when compared with equity fund returns.
– Property is illiquid. Difficult to sell fast if funds needed.
– Also, rental income is taxable. It adds little real value.
– Don’t buy more real estate for investment.
– Use mutual funds for long-term wealth creation.

» Home Loan – Assess Prepayment Option

– You still have Rs 40 lakh loan outstanding.
– Interest rates remain high. Evaluate cost vs return.
– If the EMI is below 20–25% of income, continue.
– If surplus is high, consider part prepayment each year.
– Don’t disturb SIP for loan prepayment. Use bonuses or windfalls.

» Retirement Goal – Corpus Estimation

– You spend Rs 1.2 lakh monthly today.
– Add future inflation at 6–7% yearly.
– By age 55, your monthly need may be Rs 3–4 lakh.
– For a 30-year retirement, you will need over Rs 7–8 crore.
– But this is today’s estimate. Keep reviewing every 2 years.

» Achieving the Retirement Corpus – Path Forward

– Continue investing at least Rs 2–2.5 lakh/month in mutual funds.
– Equity exposure should stay above 70% till age 50.
– Slowly shift 5–10% per year to hybrid or debt after age 50.
– Use goal-based investment buckets. Avoid random investing.
– Don’t wait till 55 and then plan withdrawals. Plan SWP strategy in advance.
– Avoid using PPF or PF as your only debt source. Mix with debt mutual funds.

» Mutual Fund Strategy – Go with Active Management

– Avoid index funds. They give average returns with no downside protection.
– Actively managed equity mutual funds perform better during market cycles.
– They offer tactical changes, better sectoral play, and human expertise.
– Continue investing through MFD guided by a Certified Financial Planner.
– This helps in fund selection, periodic rebalancing, and long-term handholding.

» Why Direct Mutual Funds May Not Work for You

– Direct funds look low-cost but lack expert support.
– Wrong schemes or missed rebalancing can reduce final returns.
– Regular plans via a Certified Financial Planner come with expert advice.
– Guidance matters more than saving 0.5% in expense ratio.
– You are building Rs 8–10 crore wealth. Get it managed well.

» PPF and PF – Use for Debt Stability, Not Growth

– You have Rs 73 lakh in long-term fixed-return schemes.
– These are safe, but returns are capped.
– PPF has a 15-year lock-in. PF is job-linked and taxable on withdrawal above limits.
– Don’t increase exposure further in these instruments.
– Allocate future debt needs through debt mutual funds.

» Emergency Fund – Already Well Placed

– Rs 23 lakh in fixed deposits is more than enough for emergencies.
– This covers 18–20 months of expenses. Very comfortable.
– You may even shift a part to liquid mutual funds for slightly better yield.
– But keep at least 6–8 months in FD for instant access.

» Insurance Check – Life and Health Protection

– Make sure you both have pure term insurance.
– Cover should be 10–12 times your annual income.
– Don’t rely only on employer group insurance.
– Also, keep Rs 10–15 lakh family floater health insurance outside the job.
– Include super top-up of Rs 20–25 lakh. Health costs are rising sharply.

» Planning for Child – Secure Education Fund

– Your child is 4 now. Education goal is 12–15 years away.
– Start a separate SIP in child’s name through minor PAN.
– Keep this goal separate from your retirement.
– This will avoid conflict in fund usage later.
– Choose growth-focused actively managed equity funds.

» Diversification – Is Anything Missing?

– Your current asset mix is decent.
– You have equity, debt, property, and emergency corpus.
– Avoid over-diversifying. It may dilute returns.
– Add international mutual funds if comfortable with currency exposure.
– Else, stay focused on Indian equity for growth.
– Don't add gold or ULIPs or annuity plans. They lack growth or flexibility.

» Taxation – Understand New Mutual Fund Rules

– LTCG on equity above Rs 1.25 lakh taxed at 12.5%.
– STCG on equity taxed at 20%.
– Debt mutual fund gains taxed as per your tax slab.
– Use tax-loss harvesting, staggered redemptions, and switch plans wisely.
– Certified Financial Planner can help plan your exits smartly.

» Mental Preparedness – Discuss Retirement Together

– Align on post-retirement lifestyle.
– Consider if you will downsize home or relocate.
– Decide if part-time work or consulting will be taken up.
– Estimate health care and travel plans.
– These affect corpus needed and withdrawal strategy.

» Finally

– You are already ahead of many people your age.
– Stay consistent with investing and goal clarity.
– Don’t chase fancy instruments or trendy products.
– Stick with mutual funds and professional guidance.
– Increase SIP every year as your income rises.
– Review plan every 12–18 months.
– Avoid locking money in new real estate.
– Don’t buy insurance-cum-investment products.
– Plan now for child education, insurance and tax smart exits.
– You can easily reach and even exceed Rs 10 crore corpus by age 55.
– Stay disciplined. Work with a Certified Financial Planner regularly.

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