Buying a home is a BIG milestone, but with HIGH property prices, most opt for a HOME LOAN. Meanwhile, SIPs (Systematic Investment Plans) are a powerful way to grow wealth. Should you pay a HIGHER EMI or INVEST in SIPs? Let’s break it down.
EMI (Equated Monthly Installment) is a FIXED monthly payment towards your home loan, including PRINCIPAL + INTEREST.
EMI Formula : EMI=P×r×(1+r)n/((1+r)n−1)EMI = P \times r \times (1 + r)^n / ((1 + r)^n – 1)
Where:
SIP is a method where you invest a FIXED AMOUNT REGULARLY in mutual funds, benefiting from RUPEE-COST AVERAGING and COMPOUND GROWTH.
| FACTOR | HOME LOAN EMI | SIP |
|---|---|---|
| FIXED OBLIGATION | YES | NO |
| PURPOSE | LOAN REPAYMENT | WEALTH CREATION |
| TAX BENEFITS | SECTION 80C & 24 | ELSS ONLY |
| RETURNS | FIXED RATE | MARKET-BASED |
| WEALTH GROWTH | HOME OWNERSHIP | COMPOUNDING RETURNS |
OPTION A: LONG TENURE LOAN + SIP INVESTMENT
OPTION B: SHORT TENURE LOAN (HIGH EMI, NO SIP)
✅ SIP INVESTMENT (OPTION A) BEATS INTEREST SAVINGS (OPTION B).
| Option | 10% EMI into SIP | No SIP | High EMI + SIP |
|---|---|---|---|
| Loan Amount | ₹30 Lakh | ₹30 Lakh | ₹30 Lakh |
| Interest Rate | 9% | 9% | 9% |
| Tenure | 20 Years | 20 Years | 15.5 Years |
| EMI | ₹26,992 | ₹26,992 | ₹30,000 |
| Total Interest Paid | ₹34.78 Lakh | ₹34.78 Lakh | ₹25.73 Lakh |
| Total Loan Repayment | ₹64.78 Lakh | ₹64.78 Lakh | ₹55.73 Lakh |
| SIP Investment | ₹2,700 | ₹0 | ₹30,000 |
| SIP Maturity Value (15% return) | ₹37.11 Lakh | ₹0 | ₹26.12 Lakh |
✅ HIGHER EMI + SIP = FASTER LOAN CLOSURE + WEALTH GROWTH!
A COMBO OF HOME LOAN EMI + SIP GIVES THE BEST RESULTS! 🚀
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