Should you prepay your Home loan? The best part of any loan is the outgo of amount is fixed and predetermined which is called EMI. EMI remains same during entire loan term, as your salary increases the EMI remains the same, over the course of time your savings will also increase. With the extra savings one can either prepay his loan to clear the loan faster or invest the extra funds in return earning avenues or the same funds can be invested in the form of SIP’s in Mutual Funds. You should consider the following things before you think about prepaying your home loan: 1. Do you have a Rainy Day Fund? Life is full of uncertainties, you would face many worst case scenarios in your life which you wouldn’t have thought or planned for like Job loss, Medical Emergency etc. It is always advisable to stash some money say 8 to 9 months of your living expenses including your Loan obligations (EMI’s) in liquid funds or savings accounts. 2. Short term Goals Once you set up an emergency fund your
Add caption The world economy facing an economic downturn worse than the Great Depression, thanks to COVID-19. World governments are giving trillions of dollars in stimulus packages to boost their economies, but all these stimulus packages might not help you to sail your life safely. The global recession will impact purchasing power and that will be reflected in prices for all goods and services. Job losses, pay cuts, appraisal deferments, contraction of GDP, these are the buzzwords you hear and see these days. Whether Covid 19 will trigger a recession or its a hyped let's leave that to the economists what we can do is making our life a recession or crisis-proof. Now is the time to act quickly and manage your finances smartly. “The person who doesn’t know where his next dollar is coming from usually doesn’t know where his last dollar went.” Let’s see some practical tips to manage the finances during the crisis. Reduce your discretionary spending If you have an emergency fund now is