Know how SIP makes home loan easy
Today we will discuss how
you can save money from SIP and pay home load easily. Know how the combination
of EMI and SIP can save your lot of money. We the best financial advisor in Lucknow is
here to share one interesting story on strategic investment. Have you ever thought what if your Home loan
tenure is reduced without increasing EMI and the interest rate also remains the
same. Sounds interesting right? Let’s read it to know how.
In year 2010, I bought 3BHK flat for
which I took the home loan of Rs 48 Lacs from one bank. In 2010 the interest
rates on home loan were around 10.5%. So I decided to take the loan for 20
years as I could afford the EMI of Rs. 47922/- only. I approached to the bank
and as per discussion the bank RM came to my office for completing the paperwork.
While filling the form he asked me about the loan tenure which I would like to
go for. I told him to go for maximum tenure as per my calculation i.e. 20
years. Bank’s RM told me, “Sir your maximum home loan limit is 25 years”.
According to my calculation I was ready for paying Rs 47992/, an EMI
amount for 20 years of tenure considering 10.5% interest and Loan of Rs 48
Lacs. So if I chose to go for 25 year tenure, the EMI would be lesser. Again I
started calculation and ended up with some unique result and a new idea. The
EMI for the 25 years was Rs 45302/, resulting into the saving of Rs 2600 per
month. So I decided to go for the 25 years loan tenure.
Now as per my previous
calculation, I was ready to pay for Rs 47992/ of EMI per month for 20 years. As
the EMI amount decreased with increase in loan tenure I decided to start an SIP
of Rs 2600/- and will use that amount accumulated through this SIP to repay the
Loan into the future. I did some calculation again to check how this SIP would
affect my loan repayment schedule. As a result I analysed that my older SIPs
were giving me some 18% kind of a CAGR, I assumed that my future SIP would
generate 15% CAGR. I found that I can repay my loan in just 18 years and 2
months. Can’t believe? Let me explain:-
After 18 years and 2 month, the
value of my SIP of Rs 2600/- per month would be approximately Rs 26.29 Lacs as
per 15% CAGR, which I can use to fully repay the rest Home Loan amount as the
outstanding loan principle amount would be equal to the Fund Value of SIP after
18 years and 2 months.
So, if you are planning to buy
the Home loan and if you have decided to take the loan for shorter period then
you can use the above idea to save some EMIs. So if you have decided to go for 15
or 20 years of tenure and your bank is providing you maximum 25 years of tenure,
I will suggest you to go for the higher tenure and start an SIP of the left
amount into the some good diversified equity mutual fund.
If you have already taken the home
loan from bank no worry, you can still utilize the above idea by asking bank to
increase the tenure or you can also transfer your loan from current bank to
another. After loan is transferred go for the maximum tenure. By selecting the
maximum tenure and doing the SIP can help you repay your loan earlier.
*The return showcased is the
assumed return and is not to be treated as any guarantee.
For more details contact us:-
Best financial advisor in Lucknow
Trusted investment company in Lucknow
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