POSTED BY February 18, 2014 8:44 pm COMMENTS (10)
ONHi,
I recently availed car loan of 2 lakhs from SBH, EMI will start from next month, I have a surplus of 90k with me , I am confused should I invest this for my kid education purpose or pay off my debt, please help me.
Regards,
Krishna
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Dear Krishna, if you are confident about this fund’s future performance, invest.
Thanks
Ashal
Hi,
Thanks Ashal for the suggestion , will do the same.
Regards,
Krishna
Hi Ashal,
How about ICICI Prudential Focussed Blue Chip Fund it is giving good returns in last 5 years.
Krishna
Dear Krishna, Please put all the amount into HDFC Top 200 or Franklin India Bluechip fund.
Thanks
Ashal
Ok, Thanks Ashal, in that case can I opt for HDFC top 200 or HDFC Prudence,or anyother MF that can be considered ?.
Thanks,
Krishna
Dear Krishna, please do not prepay your Car loan. Please use the amount to invest the way you are saying. After 5Y, your net return from Eq. and PPF ‘ll be better than the interest paid by you in all these 5Y.
There is one more thing. When retail inflation is running @ 10+%, it’s sensible to continue your loan as net payment from you towards your loan is not very much due to impact of inflation.
Thanks
Ashal
Hi Ashal,
I am planning to invest this through mutual funds and PPF combined in 85:15 ratio.
Also My loan tenure is 5 yrs and emi is around 4500 per month.
Regards,
Krishna
why not use 50% of the fund to prepay your car loan and 50% of the fund to invest in your kids’ education?
Dear Krishna,
Paying off debt is advisable since one saves on the interest outgo by doing the same.
In your case, you would have to understand if investing for your child’s education is a priority or repaying the auto loan. Also, the surplus of Rs. 90,000 could be utilized for generating income from mutual funds/fixed deposits etc. Evaluate these options before taking the next step of action.
Regards,
Credexpert
http://www.credexpert.in
Dear Krishna, if you opt to invest for your kid’s education, where w’d you invest from your own choice?
Thanks
Ashal