I have taken ICICI bank home loan of Rs 28 Lakhs for 20 years in 2015 for an interest rate of 9.5.
I am paying total monthly EMI of 26375. If I pay till 20 years I need to pay a total of approximately 60 Lakhs. (28 Lakhs Principal and 32Lakhs interest amount)
Now we have 20 Lakhs.
Can I close the home loan by paying the total amount or is there any other way I can use that amount and pay the EMI’s for 20 years?
Also, can I invest this total amount in mutual fund and get regular monthly amount(systematic withdrawal plan) so that I can pay EMI’s for 20 years.
If this Rs.20 lakh is surplus amount after meeting your monthly investments towards the goals like Emergency Fund and other financial goals (like Retirement Planning or Child Education), then you can prepay and close it. However, you lack those basic financial goals, then better to fund towards those goals and then think of pre-closure.
Regarding investing this Rs.20 lakh in MF and get regular monthly income, NO Mutual Fund will generate you GUARANTEED monthly income of more than 9.5% (your home loan interest). Hence, don’t experiment that.