Man Pays Off Home Loan 8 Years Early, Friends Call It 'Stupid' Financial Decision

Buying a home is a major life milestone, but it often comes saddled with decades of debt. In a now-viral post, one individual revealed they paid off their Rs 45 lakh home loan eight years ahead of schedule. However, instead of praise, they were met with negativity from friends who deemed the prepayment a "stupid" decision, arguing the money should have been invested instead.

"Took a Rs 45L home loan in 2018. Paid it off completely last month, 8 years ahead of schedule. Every spare rupee went into prepayment instead of investments," the user wrote in a Reddit post.

The homeowner's celebratory dinner announcement was met with caution, as friends advised that it was the wrong financial move.

"The reaction was not what I expected. Two of them genuinely argued I'd made a financial mistake, that the money would have compounded better in mutual funds, and that I'd essentially "wasted" the opportunity."

The homeowner said, despite the reaction from the friends, they were content with the decision as they were sleeping better than they ever had due to the lack of a loan burden.

"Maybe they're right mathematically. But I sleep better than I ever have. Was this the wrong call? Would love to hear from people who've been on both sides of this decision."

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'You Did Right'

As the post gained traction, the majority of social media users assured the homeowner that they took the right call, as nothing could beat the feeling of being debt-free.

"You did right by yourself. I paid my loan in 8 years, and I am telling you I have no money to invest and a house fully paid that I can live in; whatever happens in the market, nothing bothers me," said one user, while another added: "I think you did the right thing cause investing money while aggressively lowering the debt is not a great idea. You own it, don't think too much."

A third commented: "I am very neutral on this, what I did was when the interest rates were above 10.75 per cent on a home loan, I prepaid a sizeable amount. Also, claimed 200,000 on principal from a tax perspective. When the interest rate dropped to 9, I started investing in MFs instead of part payment of a home loan. Helped a lot in boosting my corpus."

A fourth said: "Life does not run on math. If you are sleeping better after that, it's the right thing you did. Now you have the EMI amount left with you, invest that till the loan tenure. Everything is not about investment and more money."