EMI vs SIP: Should you pay off your loan or invest?
Strategic Action
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This is the ultimate dilemma for the modern Indian professional: If you have a surplus of ₹20,000 per month, should you use it to prepay your 9% Home Loan or invest it in a 12% SIP?
The Interest Arbitrage
Mathematically, if your investment yield (SIP) is higher than your loan interest cost (EMI), staying invested is better. However, the emotional 'debt-free' feeling often outweighs the math.
The Power of Prepayment
Prepaying just 5% of your principal early in the tenure can reduce a 20-year loan to 12 years. This guide explores the hybrid approach.
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