Most of the individuals prefer to have their own house. Having an own house is considered more important to most rather than a rented apartment. Most of people have taken a home loan to buy a property, and so starts the EMI on your home loan.
But have you ever thought of recovering your home loan? How will you do that?
Suppose Mr. Devang Mehta has a home loan of 1 Cr @7.5% for 30 years. So Devang will end up paying EMI of Rs. 69,921/- for 30 years. So, this will total to Rs. 2,51,71,722/- at the end of 30 years.
So, with an EMI of Rs. 69,921/- Devang will end up paying total loan amount of Rs. 2,51,71,722/- at the end of your loan tenure which is more than what he had borrowed. This extra amount is the interest which he will pay to the bank.
Let’s see how Mr. Devang can recover his home loan.
Now just think to pay extra EMI of Rs. 15000/- (20% of existing EMI) for 30 years (i.e., the tenure of the home loan): –
So, if Devang start’s an SIP of Rs. 15,000/-, he will end up with total investment through SIP of 54 lakhs and thereby creating a corpus of 3,11,89,391 by the end of 30 years (i.e., the loan tenure). From this corpus, even if Mr. Devang deducts his SIP initial investment amount of 54 lakhs, he will save around 2,57,89,390 which is almost near to cover his entire home loan amount with interest.
The conclusion is if you are planning to buy a property by taking a home loan, then one must start investing in mutual funds through SIP route simultaneously. This will help you to cover your home loan amount or foreclose your loan early and also help in wealth creation.
But have you ever thought of recovering your home loan? How will you do that?
Suppose Mr. Devang Mehta has a home loan of 1 Cr @7.5% for 30 years. So Devang will end up paying EMI of Rs. 69,921/- for 30 years. So, this will total to Rs. 2,51,71,722/- at the end of 30 years.
| Loan Amount | 100,00,000.00 |
| Tenure | 30 Year |
| Loan Interest | 7.5% |
| EMI | Rs. 69,921.45 |
| Total loan repayment amount | Rs. 251,71,722.31 |
So, with an EMI of Rs. 69,921/- Devang will end up paying total loan amount of Rs. 2,51,71,722/- at the end of your loan tenure which is more than what he had borrowed. This extra amount is the interest which he will pay to the bank.
Let’s see how Mr. Devang can recover his home loan.
Now just think to pay extra EMI of Rs. 15000/- (20% of existing EMI) for 30 years (i.e., the tenure of the home loan): –
| SIP Amount | Rs. 15,000.00 |
| Tenure | 30 Year |
| Expected Return | 10% |
| Total Investment Through an SIP | Rs. 54,00,000.00 |
| Maturity amount of an SIP | Rs. 311,89,390.74 |
| % of recovery of total payment | 102.02% |
So, if Devang start’s an SIP of Rs. 15,000/-, he will end up with total investment through SIP of 54 lakhs and thereby creating a corpus of 3,11,89,391 by the end of 30 years (i.e., the loan tenure). From this corpus, even if Mr. Devang deducts his SIP initial investment amount of 54 lakhs, he will save around 2,57,89,390 which is almost near to cover his entire home loan amount with interest.
The conclusion is if you are planning to buy a property by taking a home loan, then one must start investing in mutual funds through SIP route simultaneously. This will help you to cover your home loan amount or foreclose your loan early and also help in wealth creation.