Turn SIP gains into home loan savings
When Rohan signed the papers for his dream home, the numbers felt overwhelming. A ₹50 lakh home loan, 30-year tenure, and an 8.75% interest rate meant an EMI of about ₹39,000 every month. Like most first-time homeowners, he focused on just paying the EMI and keeping the bank happy. But one conversation with a financial advisor changed everything. “Why not make your money work alongside your EMI?” his advisor asked. “Start a small SIP — even ₹4,000 a month — and let compounding fight your interest.” The Plan Rohan decided to try it. Home Loan EMI: ₹39,000/month for 30 years SIP: ₹4,000/month in a diversified equity mutual fund Expected SIP Return: 12% per annum (long-term average for equity) He didn’t increase his EMI. He didn’t prepay the loan aggressively. He simply let the SIP run quietly in the background. The Magic of 30 Years Over three decades, the SIP grew into something remarkable: Total Invested in SIP: ₹14.4 lakh (₹4,000 × 12 months × 30 years) Value at 12% per annum: about ₹...