Invest or Pay Off Loan - What should you choose? | Investment vs Loan Repayment
Investment or Loan Re-payment - What should you choose? So, you have got some surplus money and you want to decide what to do with it. If you are confused, about whether to use that #money to #repay your home loan or #invest the surplus, here is the thumb rule. If you get higher interest from #investing the money as compared to the interest you are paying on your home loan, then it is wise to invest. Let us consider some examples, Home Loan 7-8% interest Gold Loan 9-11% interest Personal Loan 13-15% interest Business Loan 15-20% interest Credit Card 33-36% interest These are the various types of #loans and their interest rates. Now, considering different types of #investment options #Bank FD & Debt Mutual Funds 5.5 to 6% interest PPF & SSY - 7-7.6% interest Gold & Gold ETF - 8-8.5% interest Commercial Paper, Corporate #FDs - 10-12% interest Equity, Index Funds, Mutual Funds - 13-15% interest If we consider home loans, for example, then we can find that we get more interest in mutual funds than the home loan interest. So, if you have surplus money then you can invest in mutual funds rather than pre-payment. But, wait !! Here are some exemptions. Following are certain conditions in which you should opt for a repayment If you are near retirement: If you are about to retire, then you should opt to clear off your loans first. Home Loan is from NBFC or small finance banks: Then you should pay off the loan because these have higher interest rates. If you have recently taken a loan then, you should make a pre-payment if you have a surplus. This is because, in the initial years, the EMI contains more interest than the principal. So, pre-payment will help you save interest. So now you know when to pay the loan and when to invest your surplus. Want to know which investment is best for you? Give us a call at 9460825477 #financialfriend #invest #loan #prepayment #paydebt #homeloan #mutualfund #repayments #interestrates #investmentproperty #propertyloan #mutualfunds nt #stockmarket #financialfreedom #finance #sip #stocks #sharemarket #nifty #mutualfundssahihai #investor #financialplanning #money #wealth Financial Friend Contact at 9460825477 [email protected] Grow your wealth with Financial Friend - The Most Trusted & Certified Financial Planner Financial Planning Investment Planning Retirement Planning Insurance Planning Invest in Mutual Funds Invest in Gold Bonds Invest in Corporate FD Invest in RBI Bonds Invest in National Pension Scheme Visit our website - www.financialfriend.in Follow us on Facebook - / financialfri. . Instagram - / financialfr. . LinkedIn - / fina. . Telegram - https://t.me/financialfriend1
