POSTED BY Nabhanyu ON April 26, 2012 1:49 pm COMMENTS (9)

Would like to know which will be the best option to go on investing.
1. Repaying home loan by 12L which will reduce my Outstanding Principal to 5L (principal amount is now 1700000/-)
2. Increasing the monthly EMI to 70K pm from 35K pm (Now the Loan Period is 67Months)
3. Investing in Gold or land in areas like the price will get doubled in 5 years or so ( I have tried my Luck on Mutual Funds like ICICIPrulife and experienced bad results).
Please suggest.


9 replies on this article “Value-Investing”

  1. Nabhanyu says:

    Thanks all for your valuable thoughts….. I have decided to go for Repayment of homeloan as the best option.

    1. Dear Nabhanyu, how about prepaying 6L Rs. & investing 6L Rs.?



  2. Money should be invested where it will work the hardest. If the home loan is, for example, at 10% considering the tax benefits the actual loan cost may be about 7%-9.5% also depending on individual circumstances. Long term return on Mutual funds can potentially return higher so you can see where money will work the hardest.

    For books – I would add ‘One up on the Wall Street’ by Peter Lynch to the list.

  3. sunil says:

    Dear Ramesh… I am impressed when people tell other to learn Financial Planning and Asset Management…
    May i ask you how a person like me having little knowledge (in these fields) learn these, do we have any very good books (not on basics, but some advance concepts as well) or any websites where in we can mine the information.

    Thanks in Advance,
    Sunil Ramidi.

    1. Ramesh says:

      For starters, intermediate and advanced, the above mentioned books.

      For a smaller list:
      1. The Intelligent Investor (the newest edition, whichever).
      2. “The Only 3 questions you need to know” by Ken Fisher
      3. How to Win the Loser’s Game- Charles Ellis

      There are no shortcuts, in my honest opinion.


  4. Ramesh says:

    Since you have considered increased EMI as an equal option (prepayment, increasing EMI, other), my advice will be:

    Think like you do not have any home loan, and proper invest your 12 lakhs. If putting it in equity seems to be too risky, then put that money in a liquid / short term debt plan. This will build you another asset, since you are not very worried about prepayment.

    In any other condition also, my advice will be the same. The debt option will save you the principal and help you if you lose your job.

    Plus, please learn more about financial planning and asset management.


  5. Ram Mohan says:

    Option 1 — without any hesitation.

    If you lose your job by any chance tomorrow, then it’ll be a big pain to pay EMI

  6. TheZionView says:

    I would suggest to repay the home loan if you are in a job which is not permanent(govt job) otherwise you can invest the money

    May i ask “I have tried my Luck on Mutual Funds like ICICIPrulife and experienced bad results” what was that you tried?

  7. Abhinav Gulechha says:

    just a friendly expert advice and all…just pay off your loan…get the loan off your head..!

    go for point no. 1!

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