Home Loan EMI+SIP Investment: How you recover Rs 87 lakh interest amount of Rs 70 lakh loan by making SIP worth 1/10th of EMI
Home Loan EMI+SIP: After some years into a home loan, one may start making an investment. It may generate a corpus that can cover the interest amount of a large loan with a monthly SIP investment of just 10 per cent of the home loan EMI.
Home Loan EMI+SIP: Repaying a home loan and making a systematic investment in a mutual fund are two different things. But getting a return from the investment can cover a substantial amount of the loan interest if one manages to invest an amount equal to even a fraction of the EMI. Know how a home loan and the SIP investment can work and how a monthly SIP investment equal to just 10 per cent of the EMI amount can cover the Rs 87 lakh interest amount of the Rs 70 lakh, 25-year loan.
Photos: Unsplash/Pixabay/Pexels
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)
How home loan pans out
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Examples of home loan
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Examples of home loan
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The estimated EMI in 20 years will be Rs 69,910, the estimated interest will be Rs 92,78,361, and the estimated repayment amount will be Rs 1,67,78,361.
The estimated EMI in 30 years will be Rs 63,064, but the estimated interest will increase to Rs 1,52,03,064, and the estimated repayment to Rs 2,27,03,064.
How SIP investment works
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From Rs 5,000 to Rs 5 cr corpus
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Creating a Rs 5 crore corpus from a Rs 5,000 monthly SIP investment seems to be an uphill task. But let's see how one may achieve it with a 12 per cent annualised return.
In 20 years, investment will be Rs 12,00,000, estimated capital gains will be Rs 37,95,739.60, and the estimated amount will be Rs 49,95,739.60.
From Rs 5,000 to Rs 5 cr corpus
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In 30 years, the investment will be Rs 18,00,000, estimated capital gains will be Rs 1,58,49,568.87, and the estimated amount will be Rs 1,76,49,568.87.
In 39 years, the investment will be Rs 23,40,000, estimated capital gains will be Rs 5,03,28,385.02, and the estimated amount will be Rs 5,26,68,385.02.
So, here you can see that with the same investment, the estimated corpus is growing faster with time.
Calculation for home loan
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What will be EMI?
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What will be SIP calculation?
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SIP investment duration
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What will be SIP returns in 23 years?
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