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Home Loan and SIP: Have you ever calculated how much your loan is outstanding and how long will it take to repay the installments? If you have calculated the loan, then you must have seen that you have taken a loan of 10 percent and you are giving 20 percent more to the banks. But with the help of mutual fund SIP, you can make up for the interest on the loan. Let’s know how.
If you want to take a loan, then the bank has to pay interest. How much interest you have to pay depends on the type of loan and bank. It also depends on how long your loan is. For example, if it is a home loan, car loan or educational loan for 20-25 years, the interest will be the same. You have to give double the amount taken as a loan to the bank. You can calculate it by checking EMI.
You can use any bank calculator by searching EMI Calculator on Google. In EMI Calculator, you have to give information about the loan amount, interest rate and loan years. After this you will get complete calculation of your EMI and interest on it. For example, you have taken a home loan of Rs 40 lakh at an interest rate of 7.5 percent. For this you have taken a period of 25 years. In such a situation, your monthly EMI will be 29,500. In this way you will pay 88 lakh rupees to the bank in 25 years. That is, you will give Rs 48 lakh as interest to the bank on a loan of Rs 40 lakh. You can charge this amount with the help of SIP.
Your target for mutual funds will be set in advance. Your target is to get back the amount you have given to the bank as interest. Now you have to search SIP Target Calculator on Google. In this, you have to put your target that in how many years you want to achieve that target and how much returns you are expected to get in a year. If you choose a low -risk SIP, then by starting a SIP of Rs 3500 giving 12 % returns, you will be able to prepare a fund of Rs 59 lakh in 25 years. Out of this 59 lakhs, 49 lakh rupees will be mutual fund returns. If you choose SIP with high risk-high returns, then you can also get your target from SIP of 2200 to 2500 rupees.
Suppose you are going to pay a monthly installment of Rs 29,500, then you can recover the interest of the loan at less than 10 percent through SIP. This will not put much burden on your finance and the amount of loss you will be lost in the form of interest will also be compensated.