Q:Is it wise to foreclose the home loan 12% int? I am in the highest tax bracket. Rent 8000 pm
Answer: Prepayment of loans is a common question yet personal in nature. What should you do with the funds you have at the moment can be determined by preparing your financial plan. However, mathematically, since you are in the highest tax bracket, the effective rate you are paying the bank is approximately 8.5% due to the tax benefits you get from the loan. Now, this may help you decide whether you need to foreclose the loan or use the funds for higher growth of investments for future goals.
From Your Expert @ InvestmentYogi