Financial Advice
An emergency fund should be greater than 6th month of living expenses. Invest 15% of income for the Retriment fund. Loan Pre-Payment Benefits: Long-term loans like home loans allow you to take part in pre-payments. In a rising interest rate environment, rethink your home loan repayment strategy and consider making pre-payments to save on rising interest costs. Just an extra few thousand every month can reduce your interest payout over the long term. “Prepaying your home loan as and when funds are available can do wonders and shorten your ballooning loan tenor,” says Shetty. For example, if you pay 5 per cent of the loan balance every year, you can pay off your 20-year loan in 12 years. Prepaying one additional EMI every year can close your loan in just 17 years, and if you increase your EMI by 5 per cent every year, you can finish your loan in less than 13 years. A 10 per cent increase in your EMI every year can close your loan in about ten years. Lastly, consider refinanci...