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By:

C.S. Krishnamurthy

21 June 2025 at 7:45:51 pm

Let Your SIP Fight Your EMI

When Ramesh bought his first home, he was delighted. The keys were finally in his hand, but another number immediately occupied his mind: the monthly EMI. “Now that I have some money left after paying my EMI, what should I do with it?” he asked his financial adviser. “Or should I start investing? And if I invest, won’t I be carrying a loan unnecessarily?” A home loan can run for 15, 20 or even 25 years, while the desire to become debt-free keeps growing. But does a borrower necessarily have...

Let Your SIP Fight Your EMI

When Ramesh bought his first home, he was delighted. The keys were finally in his hand, but another number immediately occupied his mind: the monthly EMI. “Now that I have some money left after paying my EMI, what should I do with it?” he asked his financial adviser. “Or should I start investing? And if I invest, won’t I be carrying a loan unnecessarily?” A home loan can run for 15, 20 or even 25 years, while the desire to become debt-free keeps growing. But does a borrower necessarily have to choose between repaying the loan faster and investing for the future? What if both could be pursued simultaneously? Could a Systematic Investment Plan (SIP) create a corpus that eventually helps reduce or even close the home loan? The idea merits consideration. A SIP is not a magic formula for becoming debt-free, but it can create a second financial track alongside the regular EMI. Two tracks, one objective Consider an illustration. Suppose a borrower takes a home loan of ₹50 lakh at an assumed interest rate of 8.5 pc for 20 years. The EMI would be around ₹43,400.
Instead of putting every available rupee into the loan, the borrower could consider investing ₹10,000 a month through a SIP, provided the household cash flow permits it. At an assumed annualised return of 12 pc, a ₹10,000 monthly SIP could grow to roughly ₹8.24 lakh in five years, ₹23.23 lakh in 10 years, ₹32.22 lakh in 12 years and ₹50.45 lakh in 15 years. While these are not guaranteed returns, the possibility of higher returns is also not ruled out. Meanwhile, the outstanding home loan would gradually decline through EMIs. Over eight to 10 years, the SIP corpus could become substantial enough to give the borrower an additional financial option. The important point is not to decide today exactly when the loan will be closed, but to review the position when the time comes. Why not simply prepay? Prepaying the home loan provides a relatively certain benefit because every rupee of principal repaid reduces future interest outgo, subject to the loan terms and applicable rules. The SIP serves a different purpose. It creates a financial asset and, over the long term, gives the investor an opportunity to participate in the growth potential of financial markets. The decision point comes later The strategy need not have a fixed finish line. After eight to 10 years, the borrower can review the situation rather than mechanically redeeming the SIP. What is the outstanding loan, the investment value and its performance? What are the prevailing market conditions? Is part-prepayment more appropriate than full repayment? These questions can guide the decision. If the corpus has grown sufficiently and circumstances are favourable, the borrower may consider using part of it to reduce the outstanding loan or, if appropriate, redeeming enough to close the loan completely. If the investment is better retained for the long term, there is no compulsion to exit merely because 10 years have passed. The strength of the strategy lies in this flexibility. Think beyond the loan A long-term SIP is not merely a future home-loan repayment fund. It can become a wealth-creation vehicle in its own right. Compounding rewards patience. A disciplined monthly investment held for the long term can help build a corpus for retirement, children’s education, other life goals or financial independence. Thus, while the home loan moves towards closure through the EMI, the investment has the opportunity to grow alongside it. Once the loan is eventually closed, the EMI disappears. Instead of allowing that money to quietly disappear into lifestyle expenses, the borrower can redirect some or all of the former EMI towards investments. A sensible balance This approach is not a universal prescription. Some borrowers may prefer aggressive loan prepayment, while others may find the combination of EMI and SIP more suitable. The SIP amount should also be comfortable. If ₹10,000 strains the monthly budget, start with less. The strategy should strengthen financial security, not create financial pressure. Adequate emergency savings and appropriate insurance should also form part of the overall financial plan. The larger lesson is simple: a home loan need not automatically put wealth creation on hold. With disciplined cash-flow management, a long-term investment approach and periodic reviews, the EMI can continue paying for today’s home while the SIP works towards tomorrow’s financial freedom. In the end, the question need not be, “Loan or investment?” It can be: “How can I use both wisely?” Disclaimer: “Mutual funds are subject to market risks. Read all scheme-related documents carefully.” (The writer is a retired banker and author. Views personal.)

Greens seek PM’s help over Belapur tree attack

Writer: Bhalchandra Chorghade
Bhalchandra Chorghade
1 hour ago
2 min read

Over 25 trees damaged despite repeated civic complaints

Mumbai: More than 25 mature trees in Kille Gaothan, CBD Belapur, have allegedly been poisoned in a renewed attack, prompting environmental activists to approach Prime Minister Narendra Modi after repeated complaints to the City and Industrial Development Corporation (CIDCO) and the Navi Mumbai Municipal Corporation (NMMC) failed to ensure their protection.


NatConnect Foundation has sought the Prime Minister’s urgent intervention, alleging that the authorities have failed to prevent the destruction of trees despite repeated appeals from environmentalists and local residents.


The affected trees include Bhokar (fragrant manjack), Badam (Indian almond), palm, tamarind and Beri (Indian jujube). Activists reported deliberate cuts on the bark, holes drilled into the trunks and suspected chemical injection. Liquid was also seen oozing from some trees, accompanied by a foul chemical odour.


The latest damage reportedly occurred on Saturday, after the alleged perpetrators had briefly stopped their activity following media reports about the incident.


“The perpetrators briefly halted their destructive activity following media reports but appeared to strike back with a vengeance on Saturday,” said activist Paramdeep Garewal, who spearheaded a citizen-led effort to revive the damaged trees.


“I am in tears today. Residents and environmentalists spent time, effort and money trying to save these trees, arranging water and treatment with the help of a tree expert. It is heartbreaking to see what appears to be a renewed attack on them,” Garewal said.


The trees are located just behind the NRI Coastal Police Station, virtually opposite the NMMC headquarters. NatConnect and local residents had earlier submitted an appeal bearing more than 75 signatures to the NMMC Commissioner, demanding action.


Vishnu Joshi, convenor of Parsik Greens, who inspected the trees along with Garewal, said the damage required scientific investigation and sustained treatment.


“These are mature trees that should be protected. The authorities must establish what substance has been used and identify those responsible. The trees need expert treatment and sustained monitoring, not a token response,” Joshi said.


Following the advice of plantation expert Rajiv Patil, Garewal and local residents treated the damaged portions with Bordeaux paste, removed weeds and construction debris, loosened compacted soil and applied humic acid and organic nutrients to improve the root zone.


NatConnect director B N Kumar criticised the civic response, alleging that officials merely applied lime while the Garden Department failed to ensure proper treatment and protection. He said blaming mischievous children for the damage could not substitute for a serious investigation.


“This cannot be dismissed as children’s mischief. The nature and scale of the damage demand a proper investigation. Both CIDCO and NMMC have been repeatedly alerted, yet the trees remain vulnerable,” Kumar said.


The incident has raised concerns over the protection of mature trees as Navi Mumbai grapples with pollution, rising temperatures and climate risks. Kumar cited the 3-30-300 urban greening rule, which recommends three trees visible from every home, 30% tree canopy in neighbourhoods and quality green space within 300 metres.


“While cities should be growing their green cover, we are struggling to protect mature trees. Authorities must act before these trees are lost,” Kumar said. 

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