Loan closure versus investment, what should be the priority?
Hi. I took Education Loan of worth 12,00,000 for my graduation. At the time, when I started repaying it back, the Principal amount had gone up to 15,00,000.. the monthly EMI was set up for about 15,000 per month. I continued to pay 30,000 per month without missing Any instance. I have been repaying it for the last two years alongside doing my MF SIP. Still, the outstanding amount is about seven lakhs.. so I am thinking if I should reduce my investment and focus on Loan closure, first as a priority because it seems to be as a mental burden on me. Is this idea Good in terms of better finances, or I should equally keep investing along with what I am repaying currently??
Focus on loan closure.
It's amazing how much clarity you get once you remove debt from your mind.
Payoff debt early, Live debt free life. Reason, uncertainty in today's world in Job market and second, anyways returns from market are not promising
Compare the interest rate you’re paying on the loan with the expected returns from your investments.
Education loans usually have interest rates close to personal loans. If that’s the case, clearing the education loan first makes sense.
Investment returns depend on market conditions, so profits aren’t guaranteed. But once you clear your debt, you get mental peace and financial freedom.
I cleared my education loan almost 2 years ago. At that time, I was paying nearly double the EMI, similar to your situation, and hadn’t started investing yet.
This is just my opinion, you can sit down and calculate the numbers. You can also think about investing later in physical assets like land, which may give better returns over the long term.
12L ki kausi graduation hai? 😓
Amity se kiya hai
Even if you save some money by investing rather than loan closure, I’d still suggest to close that loan, just because of mental hurdle, I recently closed my parent’s loan against property of their home, and believe me it was excellent decision, If you’re still young and somehow belives that your income will raise then you don’t need these kind of hurdles to save some money.
According to finance closing a loan against an investment is a bad idea but according to human feeling sometimes it is a good idea but i would suggest don’t pull your investment from market’s in q1 2026 in next year u will get good return in market
If you are paying early, you need to talk to the banker to reduce the tenure. Otherwise they will only keep the emi payment as prepayment. You will not get the benefit of reduced principal. You need to visit the bank and fight for it because prepayment and tenure reduction is not profitable for the bank.
If your investment returns are greater than your loan interest rate then don't pay off your loan, Else pay off your loan
