Home Loan Repayment vs Investing in Mutual Fund vs depositing money in Max Gain Account

POSTED BY maheshgaur ON November 16, 2013 10:46 am COMMENTS (2)

Dear Manish/Ashal,

I have just finished your book ” How to be Your Own Financial Planner in 10 Steps”

Superb book, good effort in simple language, started implementing some actions based on it.

Currently i have this query

I have 2 Home Loans

23 Lacs from HDFC @10.65% interest and 10 lacs from SBI with Max Gain @ 10.25%

Now every month i have a surplus of about 20-25K but getting confused what to do out of 3 options as below:

1. Invest in MF approx return 12-14% in long term interest free (Non guaranteed)

2. Repayment of HDFC Loan saving of 10.65% interest but losing on income tax front (but getting debt free)

3. Keeping in Maxgain and saving 10.25% interest and losing on income tax front. (assured saving and liquid money)

As i have 2 home loans i take interest benefit in SBI loan(upto1.5Lacs) and full interest deduction in HDFC loan after showing rent income.

Please advice on this.

 

2 replies on this article “Home Loan Repayment vs Investing in Mutual Fund vs depositing money in Max Gain Account”

  1. ashalanshu says:

    Dear Mahesh, if you can really afford to invest for long term I w’d ask you to invest the amount into MFs and let the loans run as it is. The inflation is working in your benefit here. Paying 30K EMI in 2010 and 30K EMI in 2013 is not same in money purchase value. Please think over it.

    Thanks

    Ashal

  2. Credexpert says:

    Dear Mr. Gaur,

    Planning and organizing finances is an important step to have a healthy financial life.

    Currently you have 2 outstanding loans and hence it would be a good option to repay/prepay the loan with the higher interest first and get debt free. As your cash flows today allow you to repay the outstanding, we would suggest that you do the same since any future uncertain activities can impact your cash flows thereby impacting your repayment capacity.

    Regards,
    Credexpert
    http://www.credexpert.in

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