His current outstanding liabilities amount to nearly Rs. 18,00,000/-. His annual contribution towards these EMIs constitutes nearly 45% of his monthly income.
This means that almost half of his monthly income is consumed in meeting these loan EMIs. One of the options that can be considered is the prepayment of car loan. However, it comes at a cost of penalty and therefore may not prove to be a very feasible preposition. Also, since his car loan will be repayable in the next two years it will reduce such payables and will lead to higher savings (Rs. 3,00,000/-). Once these loans are repaid, the client will be left with sufficient money to be invested.
Mr. Smith requires a corpus of nearly 20 lakhs after 20 years for his son. He also needs to build his retirement corpus or Rs. 30 lakhs in the next 10 year. He is having investments in stocks and shares, FPF/ PPF and bank FDs worth Rs. 5 lakhs.
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