Cut the pain or up the gain

Prateek works with a software company and earns about Rs 2 lakh monthly. He lives with his homemaker wife and two kids - a five-year-old daughter and a three-year-old son. His monthly expenditure is Rs 60,000. Besides this, he pays an EMI of Rs 60,000 for a home loan that he took a couple of years back. The current outstanding amount of the loan is around Rs 58 lakh. With this, the family's total monthly outgo is Rs 1.2 lakh. Besides getting an investment road map for his retirement and children's higher education, Prateek wants to know if he should divert the surplus to prepay his home loan. At present, he has a sizeable corpus of Rs 42.4 lakh spread across mutual funds, NPS, PPF and others.

This article was originally published on April 02, 2020, and last updated on November 23, 2022.