financial planning for dad.
26M here, looking for some unbiased financial advice regarding my father’s financial planning and whether he may be over-leveraging himself.
My father served in the armed forces for 25 years and later took voluntary retirement and joined a public sector bank. Current financial situation:
- Armed forces pension: ₹40,000/month
- PSU bank salary: ~₹1.5 lakh/month
- Rental income: ₹40,000/month
So total monthly inflow is roughly ₹2.3 lakh before taxes.
Liabilities:
- Home loan EMI: ₹25,000/month
- Car loan EMI: ₹15,000/month
Now the main concern: because bank employees get loans at very concessional rates, he is planning to take another loan of around ₹60 lakh at 5.5% simple interest.
His plan is to use this money to create a library or some flats on our land in town.
Personally, I feel he may be over-leveraging himself, especially considering he already has existing EMIs and is nearing retirement age from the bank job as well.
Some additional family context:
- I’m 26M and currently preparing for civil services, so I have no income right now.
- My sister is married and financially settled (her husband is a Group/Class A Central Government officer).
- my family is covered under ECHS, therefore no medical expenses also for my parents.
Questions:
- Does this level of leverage seem risky considering his age and current obligations?
- Is taking a low-interest loan for income-generating assets actually financially smart here?
- What factors should we evaluate before taking this additional ₹60 lakh loan?
- Would you personally do this in his situation?
Would appreciate practical advice, especially from people experienced with real estate investing, leverage, or PSU/bank employee loan structures.