Home Loan v/s Goals – Which is the best bet ?

Home Loan

In last 6-7 years we have seen a surge in real estate buyers. With this sudden increase in demand for real estate the number people seeking home loans have also gone up. 7 out of 10 people that I meet are paying EMI’s for their home loans that they have taken. When I talk to people around they often raise a question “Should I prepay my home loan or should I save for my financial goals”.

Buying a home is dream for many

Whether you want to buy a home in the city you work or a home at a place where you want to retire isn’t a bad idea at all. Everyone wants to buy it whether it is someone who has just started earning or someone who has reached its peak earning years. With easy availability of home loans, this has been possible.

But just like this dream of yours, you also dream of travelling around the world, giving your kids the best education opportunities, living your today to the fullest and being financially free to enjoy the later years of life etc. Home loans can certainly aid you to buy one dream of yours but what about the other dreams that you have? Have you anticipated what would be its cost and how would you fulfil them?

Start an EMI for these goals too

Just like you buy your home in instalments from the bank, similarly anticipate the amount that you will need for your kids higher education or retirement or wedding. Start paying a monthly instalment for creating a corpus that would help you buy them too. This would ease out the burden to shell out huge sum in one go. Though you can’t see them right now, but you will have to pay for them too.

Use the increment for other goals

With time the expenses have gone up and so is your income. Now that you have a disposable income don’t use it to prepay your home just for the sake of getting debt free. As I quoted in the article last week that if it’s a good loan, continue it and use the balance to pay for your other goals as well.

But if you have some unexpected profits such as sale of other assets or bonus or otherwise, you may use the same to prepay you home loan. Before that make sure your plan for other dreams is on track.


SLA Financial Solutions is a Leading Advisory firm based out of Jaipur. We are amongst the top 5 Financial Advisory firm with a team of 20 + people. We have been awarded twice by CNBC as best Financial Advisor across North India.