Should i Invest or Prepay Loan? is the classic dilemma faced by the borrowers. This catch 22 situation arises when a borrower receives a lump sum amount. The most common sources are an annual bonus, the maturity of deposits, a gift from parents/relatives or inheritance. Normally i don't suggest to prepay loan especially Home Loan from any amount received through inheritance or gifts from parents / relatives. The only exception is if you have signed proper gift deed or family settlement agreement to safeguard your financial interests. If you prepay loan from gifted/inherited money then it may ... Read More
Impact of Low Value Loan on CIBIL Score
Loan in any form is not good for financial health of an individual specially low value loan. I don't believe in Good Loan or Bad Loan, it should be avoided (If possible). Rather i believe in credit discipline and good credit practices to improve CIBIL score. I do agree that for an asset like property, an individual cannot be save such a huge amount to buy property without home loan. Barring few exceptions i.e. high value assets, we can manage our finances to avoid low value loan / borrowing. In my opinion, a Loan should be availed if following 2 conditions are fulfilled (a) Purchase / Buy ... Read More