I have an outstanding home loan of Rs. 12 lakhs. I borrowed it from ICICI Bank and I paying interest at near about 10% rate. I have Rs. 7 lakhs in my savings account. Please suggest should I prepay a part of my loan from this amount or should I invest it somewhere.
Prepaying your loan may involve prepayment charges. In addition, it will reduce your tax benefits on EMIs. I will suggest you to use a part of your savings in prepaying your loan and keep the balance in savings account or FD as a buffer for rainy day.