Home Loan+SIP Investment: How SIP worth 11% of EMI can recover Rs 1.29 cr interest of Rs 80 lakh, 25-year loan; understand it through calculations

Home Loan+SIP Investment: In most home loans, the borrower pays a higher interest amount than the principal amount. The reason is that home loans are taken for a long duration. So, when a borrower repays the loan, they spend quite a large amount from their monthly income just on interest. The interest amount can be reduced by paying an additional equated monthly instalment (EMI) every year. Or, a borrower can opt for prepayments. But sometimes, in a tight budget, there is not much scope for either of them. Is there any way to recover loan interest? The possible way can be to make an investment along with repaying the loan. But if one doesn't have money to pay an additional EMI or prepayment, can they arrange money to invest? In the initial years of the loan, it may not be a possibility. But as time passes and income increases, even a small monthly amount can be invested. In this write-up, we will project how, with just a mutual fund SIP worth 11 per cent of the EMI amount, one can generate fund that can easily match the interest amount of a Rs 80 lakh, 25-year home loan.
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