Investing Rs 30,000 per month to pay off loan

I am 24 years old. I have an EMI of education loan of Rs 29,000 starting from June next year. The loan outstanding is around Rs 13.8 lakh. I want to invest around Rs 30,000 through SIPs in mutual funds every month for the next three years to fully pay off my loan by 2020. What mutual funds would you suggest, with moderate risk appetite and with what interest rate? I wish to have some mutual funds going on for further savings after my loans paid.
--Shardul Singh Sengar

You have not mentioned the interest rate on your loan and the tenure. So, it is not possible to offer a personal solution.
Since you have an investment horizon of just three years, you should stick to safer investment options like debt mutual funds and bank deposits. It is not wise to expose your money to unnecessary risk when you have a short investment horizon. You may consider investing in a dynamic bond fund scheme. The dynamic bond fund category has returned around 10.38 per cent in the last one year. Note, debt mutual funds do not guarantee any returns and the returns are dependent on the debt markets.

A word of caution: do not invest in equity mutual fund schemes with an investment horizon of three years. It could prove extremely risky as stocks are risky and volatile in the short term.


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