I am 33 years old. I have an apartment in Bangalore. I had taken around Rs22.5 lakh loan for 20 years from HDFC Bank Ltd (floating). Last year I prepaid Rs5 lakh and decreased the loan tenure to 15 years. Now I have a loan of around Rs16.5 lakh. With the current return on investment of Rs10.75, my last instalment date is 31 March 2022. My questions:
1.I have around Rs3.5 - 4 lakh of cash now. Is it advisable to prepay the loan with the same tenure (15 years) or increase/decrease the loan period? Is there any other variation?
2.Or invest elsewhere?
3.From a tax benefit perspective which is better?
4.The apartment is vacant. Will I get tax benefit for both principle and interest?
5.Till now I haven’t invested in stocks.
In the current economic scenario, when things are likely to look up, I would not suggest you prepay your loan but rather invest it intelligently so that you are able to earn more than what you are paying. A well-thought- out investment in mutual funds could yield you better returns. From the tax point of view if you invest this sum in equity-linked saving schemes, you will get more benefits.
Regarding your third query, if the house is in your name and is the only residential property for which you have taken the possession, then you would get income-tax benefit.
I am new to the stock markets and am planning to invest Rs5 lakh in Educomp Solutions Ltd. I have a good risk appetite? What would you suggest?
It’s a good but very risky and volatile stock. Even if you have a high-risk appetite, I would not suggest to invest your entire sum in this stock. I would suggest you balance out your portfolio by investing in some other quality stocks as well.
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