In 2009, I purchased flat on loan from LICHF. My total savings are Rs. 35 lakhs ? Rs. 10 lakhs in FD, Rs. 3 lakhs kept separate as emergency funds, flat of Rs. 22 lakhs. I am thinking of using entire Rs. 35 lakhs in repaying loan and get rid of the tension of debt. Am I right?
Emergency fund should should not be touched for loan repayment. In long run, your flat can yield huge returns. Rs. 10 lakhs deposited in a FD is already earning interest @ 9% p.a. I don’t think that using these funds will be justified.