11 Points To Achieve Financial Freedom - Part II

Being independent is wonderful feeling. We got our independence from British after long struggle. Same is applicable to financial freedom. Let’s understand what financial freedom is:

 “Financial independence is a term generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities”

In part one of this post I have listed 5 points, do read it "11 Points To Achieve Financial Freedom - Part I".
Here I am listing remaining 6 points.

6. Purchase adequate life cover

The main purpose of term insurance is to provide the financial security to your loved ones in case of you died so that after you, your family will not be in any debt.

Understanding The Tax Benefit on Home Loan Interest

Most of us took home loan for purchasing our dream house and it is a very good tax saving instrument. There is a lot of confusion about the tax benefit on interest on home loan among people and in companies also.

I have experience in my previous and current company (with old payroll vendor) that they allow tax benefit only on one home loan and up to 1.5 lacks. So if you have more amount for tax benefit (i.e. Interest on a second home loan etc.) you have to file return to get back the paid tax.

5 ways to payoff home loan early

It is every ones dream to own a house and taking home loan to fulfill this dream is the most preferred way for most of them. But till you doesn't pay off your home loan house is not yours. So it’s also important to pay off the home loan early to get the full ownership of the house.

Let’s see how we can payoff the home loan early.

1. Opt for lesser tenure

Now these days some home loan lenders giving loan for 25 yrs tenure. Mostly people Opts for long tenure since long tenure reduces the EMI amount. Doesn't fall into this trap. You should understand that irrespective of tenure or EMI amount, the interest part EMI remains same. So if your interest rate is 11% that means you have to pay 11% interest annually irrespective of tenure, what it mean is the more is tenure the more interest you are paying.

You should opt for the minimum tenure you could afford. This will reduce the total interest paid.