POSTED BY January 29, 2014 8:55 am COMMENTS (4)
ONMe and my wife have taken SBI home loan for 30 lacs and EMI is Rs 38025. We both are working and have income salary Rs 50K per month.
I am confused whether I should invest some money to other places like FD, RD or MF OR should transfer all our savings into Loan OD account to get rid of home loan soon?
Please advise. Also tell me where and how much we should invest?
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Dear Vikas
Something is wrong in the numbers you provided. Either the loan tenure should be between 10-12 years or the EMI should be approx 30K not 38K or else the Loan amount itself should be 38 Lac or so instead of 30 Lac.
Thanks Ashal and Divya..
My Home loan is started on Oct-13 and of 20 years.
I would suggest home loan first. I am not sure when have you taken the loan but unless it is last few years of your home loan you will be paying lot of interest.
Ask your bank for month wise break up of principal and interest and you can then decide if paying home loan is better or depositing in FD. there are lot of online calculators as well that give you this information.
The way loan works is as follows for a loan of 240 months when you pay EMI of first month bank will take interest of 240th month and the remaining is deducted from principle. So you now know how big is the interest component early years.
My personal advise is if you already have sufficient emergency fund and already taking care of your retirement pay off home lon as early as possible.
Dear Vikash, transfer all the salary from both of you on credit day to Max Gain OD account. Once this is done, invest and spend from OD account. The money lying even for few days in OD account ‘ll help to cut interest. Personally I w’d prefer to invest for retirement of both of you in MF SIPs from OD account.
Thanks
Ashal