Can you please guide me on my current financial situation

1. Home loan - Interest rate of 9.65% on your home loan is high. You should contact the housing finance company and negotiate reducing the interest rates. Recently, most of the housing finance companies in India reduced the interest rates and therefore, you should avail this benefit.

2. Your SIPs – You are doing 3 SIPs for investing Rs. 1,700 per month. The total number of funds you are doing SIPs is high. You should have done SIP only in one good fund. Anyways, the funds selected for SIP are good.

3. Choosing between doing SIPs versus paying off your home loan, it is always prudent to pay off the loan first. But the question is can you pay-off Rs. 1,700 (your current SIP amount) additionally per month to the housing finance company? This is a question you need to ask to the company.

However, if you have some surplus lying with you, then you can pay off a part of the loan, request the housing finance company to reduce the EMI and continue the SIP for long term wealth creation. If the EMI is reduced you can even increase the monthly SIP amount as well.

4. Term Insurance – The current term plan only covers the home loan that you have taken. But what about having a term plan other than this? Since you are young, you should take a term plan now as considering your age the term plan premium would be very less. The suggested term plan cover can be 10-12 times of your annual income.

5. Mediclaim – Like term plan, each individual should also have a Mediclaim policy. Again in your case, the annual premium for a Mediclaim policy will be very less due to your age.

6. LIC policy – These policies neither generate desired returns nor give you enough life cover. The maximum return you could get maybe around 6%. If you take a term plan, your life is protected and mutual funds can take care of the long term wealth creation objectives. Then, do you really need this LIC policy? You need to think about this.

7. What is PLI? Is it postal life Insurance? If yes, then you may consider discontinuing this if you are taking the term plan.

Hope the above helps you.

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