Where should I invest a lump sum amount of Rs. 1 lakhs? I have a home loan with an 8.4% interest rate. Should I simply pay off the loan or invest in any other profitable avenue?
Personal Finance will require you to deal with situations where you will be confused about which option is best. However, it may be beneficial if you consider talking to a professional financial planner if the situation involves a large amount of money.
Answer and Explanation:
This home loan rate is substantially high and you would be better off paying off the home loan. The average return on mutual funds in India yield returns in the range of 7% to 9%. Therefore, it is difficult to make a decision about which would be better. Paying off the mortgage would save you from foreclosure and minimizing your interest you will pay on the home loan. It is always better to pay off debt.
Financial Disclaimer: The information on this site is for your information only and is not a substitute for professional financial advice.
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Learn more about this topic:
from Finance 305: Risk ManagementChapter 3 / Lesson 3