I am seeking guidance on my current financial situation. I am 50 years old, with a net take-home income of 1.42 lacs per month, while my wife earns approximately 75k monthly. We have two daughters pursuing higher education, with annual fees totalling 6.10 lacs.
In the wake of the COVID-19 pandemic, I faced a significant setback when I was unable to pay my home loan EMI, leading me to opt for a moratorium. Despite having already paid approximately 43.85 lakhs towards my home loan of 58.50 lakhs taken in 2017, the principal outstanding has astonishingly increased to 59.45 lakhs. I now find myself committed to an EMI of 65,000 monthly, further straining our financial resources.
To cover both my daughters first-year college fees, I took out a gold loan of 5.5 lakhs, for which I currently pay 50,000 a month.
I had invested in a family health insurance policy with Star Health, covering 10 lakhs, but due to poor service I stopped paying my premium, which had an accrued value of 17.50 lakhs.
I hold a provident fund account with a balance of 2.5 lakhs. I am concerned about planning for my elder daughter's wedding in the next 2 to 3 years and my retirement.
I would appreciate any advice or strategies you could provide to help me navigate this situation effectively.
Ans: Hello;
Try and understand from the home loan lender as to how 59.45 L principal is overdue despite paying a sum of 43.85 L, despite factoring 80% of this as interest payment, the overdue principal should be below 50 L.
Double check if this is as per the terms of moratorium.
If you are not satisfied with replies from the lender escalate the matter to the highest authority at lender or RBI.
Lender can't behave irrationally just because you availed moratorium during COVID.
In my view you should have just sold the gold rather then taking loan against it.
That way you could have lessened EMI burden on your finances and ensured investments for retirement and other goals.
Unfortunately we have a tradition of attaching emotional value to precious metals and real estate.
The best "jewellery" you can offer to your kids is good education, which you have already done.
In matters of health insurance never discontinue a policy due to dissatisfaction with the insurer, port it to another insurer, 1.5/2 months before the renewal date so that your benefits remain intact. Now you may be need to find another health care insurance.
You may begin a monthly sip of 25-30 K in diversified large cap oriented mutual fund for 5 years.
Also give a thought to NPS, you can contribute till 70 age, for retirement pension.
Best wishes;
