"loan vs SIP optimization strategy"

 

🏠 Scenario: Home Loan Optimization + SIP Strategy

🎯 Client Profile:

• Home Loan: ₹50,00,000

• Tenure: 20 years (240 months)

• Interest Rate: 8.5% p.a. (typical housing loan)

• EMI: ₹43,391/month

• Suggestion: Increase loan tenure to reduce EMI, invest EMI savings in SIP

Step	Action
1️⃣	Increase tenure from 20 to 30 years
2️⃣	New EMI becomes ~₹38,530/month
3️⃣	EMI saving = ₹43,391 – ₹38,530 = ₹4,861/month
4️⃣	Start a SIP of ₹4,861/month for 30 years
5️⃣	In the long term, home loan will pay itself off from SIP returns

💰 Financial Comparison

🧾 Option 1: Normal Home Loan (No SIP)

• EMI = ₹43,391/month for 20 years

• Total Paid = ₹1.04 Crore

• Interest Paid = ₹54.1 Lakh

• Principal = ₹50 Lakh

• No investment growth

💡 Option 2: Extend Tenure + Invest EMI Savings in SIP

• New EMI = ₹38,530/month (for 30 years)

• SIP = ₹4,861/month (for 30 years)

• SIP Investment Total = ₹17.5 lakh

• Expected SIP Corpus @12% = ₹1.76 crore

• Total EMI paid over 30 years = ₹1.39 crore

• Net wealth after 30 years: ₹1.76 cr – ₹89 lakh (extra EMI interest) = ₹87 lakh gain

📌 You save interest and build wealth simultaneously!