Should I pay off the loan for apartment

 Whether or not to pay down the loan for the apartment depends on several factors..

Lets assume a person has 50 Lacks Loan and he/she has some money by which he can pay down the loan or pay it off completely. Lets also assume the interest rate for the loan is 8%. Now, say the person has 50 Lacks. Should he pay off the loan or let the EMI continue?

lets discuss

1. What will you do with the money if you dont have payoff: If the money will be sitting in Fixed Deposit or any such investment and earning less than 8%, it is financially better to pay off the loan. The reason being, the person is paying 8% interest while earning less then that. So Verdict: If you will put the money in Fixed deposit or bank where it will earn less then 8% (10% for tax adjustment), it is better to pay off the loan

2. Some people prefer to pay off the loan well because it is headache, extra work to manage/maintain the loan, EMIs (what is EMI is forgotten to be paid on time and so on). In that case, if Auto pay is also not working, then it is best to pay off the loan and live a tension free life.

3. You will zero (or limited) emergency funds available: If you are going to use all your savings for the loan and might not be left with decent amount of Savings left, then it is better to keep some Emergency funds and pay only part of the loan while keeping some money for a rainy day. 

4. You are going to take spend/invest in risky assets: Some people don't like money lying around and prefer that they spend it away or invest in risky assets. In that case also, its best to pay off the loan for the lack of discipline/control one may have

Other options include, having SBI Max Gain, Advantage loan account where in you can pay off the loan but can take back the money in the future if you need it. That is a mix of these options and can also work for some folks. These account work in the manner of a checking/savings account where you can put in or take the money anytime you want. At times linked to your saving account. Do note that interest rates for such loans is slightly higher then regular loan.

So net net, if you don't have an avenue to earn more than your interest rate, its best to pay off the loan. If you can reliably earn more than interest rate of the loan, it's better to hold off and not pay the loan (Just keep paying of EMI)