SIP for Home Loan: If you do this work as soon as you take a home loan, you will not have to pay a single penny of interest from your pocket..
Start SIP with EMI: In recent months, property prices have risen a lot, making it difficult to buy a flat in big cities like Delhi, Noida, Mumbai, and Gurugram. It is necessary to live in these cities due to jobs, so buying a house becomes a necessity. Since it is not possible to pay the entire price in cash, taking a home loan is the only option left.
If you take a loan, you will have to pay interest even more than that. That is why after buying a house, as soon as the EMI starts, if you are able, then it is wise to start SIP. This will not only prove you to be a smart investor, but by the time the loan ends, you can at least make it interest-free.
Home loan: How much interest do you pay on the principal amount-
Suppose you are taking a loan of Rs 50 lakh from the bank. You have kept the loan period as 20 years and the bank is charging you 9.50 percent annual interest on the loan. According to the SBI home loan calculator, your monthly EMI will be Rs 46607. On this calculation, you will have to pay Rs 61,85,574 as interest to the bank in return for a loan of Rs 50 lakh in 20 years. Which is more than your principal amount. That means the total price of the house will be Rs 1,11,85,574.
Total home loan: Rs 50 lakh-
Interest rate: 9.50%
Loan tenure: 20 years
EMI: Rs 46607
Interest: Rs 61,85,574
Total payment to the bank instead of loan: Rs 1,11,85,574
SIP: Invest 20% of monthly installment in SIP
Monthly SIP: Rs 9320 (around Rs 9300)
Duration: 20 years
Estimated annualized return: 12%
Total investment in 20 years: Rs 22,32,000 (Rs 22.32 lakh)
Value of SIP after 20 years: Rs 85,54,673 (Rs 85.55 lakh)
Wealth gain in 20 years: Rs 63,22,673 (Rs 63.22 lakh)
More than home loan interest received in SIP Benefit-
It is clear from the calculator that the total fund accumulated by doing SIP in 20 years was Rs 85.55 lakh. But for this, you invested Rs 22.32 lakh in 20 years. Even if you withdraw your investment, you get a profit of Rs 63.22 lakh from SIP.
In the first case, you have paid interest of Rs 61,85,574 for a home loan of Rs 50 lakh. In this way, you get more benefits from SIP than the interest on the loan. That is, if you start a SIP of just 20 percent of one month's installment as soon as EMI starts, then after 20 years you will get the value of the total interest paid instead of bank loan.
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