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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.)

Knives out in legislature

Writer: Abhijit Mulye
Abhijit Mulye
Mar 20, 2025
3 min read

Updated: Mar 21, 2025

Disha Salian

Mumbai: Death of celebrity manager Disha Salian in 2020 once again rocked the Maharashtra legislature on Thursday. While cabinet ministers Nitesh Rane and Shambhuraj Desai demanded that Shiv Sena (UBT) leader Aditya Thackeray be arrested in the case, BJP MLA Amit Satam in the assembly and another BJP member Chitra Wagh in the council demanded that the report of SIT to probe Salian’s death be made public.


Incidentally, amidst repeated disruptions in both the houses, some members from the treasury benches were seen speaking in favour of Aditya Thackeray, while Shiv Sena (UBT) members like Adv Anil Parab were seen supporting the BJP members’ demand that the report of the SIT probe be made public. In addition, there were allegations and counter allegations and personal accusations among members from the treasury and opposition benches which led to heated debate on occasions.


The opposition termed the attempts from the treasury benches to link Shiv Sena (UBT) leader Aditya Thackeray’s name in the case, as a ‘conspiracy’.


“I think this matter has gone to the court. We have no idea what he (Disha’s father) has said, but Aaditya Thackeray is a mature leader, a young leader. The Bharatiya Janata Party is conspiring to defame him by putting pressure on him. We don’t need to answer to this conspiracy. The court will answer,” Ambadas Danve said.


Earlier in the day, when the house gathered for the business, Minister of State for Home appraised the assembly of the status in this case. “SIT has been formed to probe in the case. Their report has not been received as yet. However, the government shall act according to directives from the court,” the minister told the house.


Another BJP minister Nitesh Rane, however, said that since Satish Salian has levelled allegations against an MVA minister, that leader be treated like a common person and that everybody should be treated equally before the law. Shiv Sena minister Shambhuraj Desai too supported the demand. “Since the allegations are grave, the person in question should be immediately arrested and the case be investigated,” he said.


Later, while speaking to media in the legislature premises, Rane asked Uddhav Thackeray to come clean on the issue. “If they say that we are politicizing the issue, Uddhav Thackeray should also tell the people why he had called, not just once but twice, to the then union minister Narayan Rane urging him to save his son?” Rane said.


He also accused the opposition of shying away from coming clean on the issue. “If they feel that we are not telling the truth, they should say so in the house. But they are shying away from doing so. Bhaskar Jadhav, who is always aggressive, was nowhere to be seen when this issue came up in the house. Sunil Prabhu too escaped the house under the pretext of a phone call. I challenge them to say that whatever I said on the issue is wrong,” Rane said.


He also said that Aditya Thackeray should resign on moral grounds till his name is cleared in the case.


BJP MLA Amit Satam demanded that the details of the SIT probe be made public so that the people would know if the probe is headed in right direction.


Interestingly, while the ruling parties were targeting the opposition in the case, senior BJP leader Sudhir Mungantiwar surprised all with his unexpected support to Thackerays. “I do not have any evidences in the case. But if her father has made any fresh allegations that needs to be investigated thoroughly. The assembly can discuss the issue at length tomorrow. In the meanwhile, members like Rane, who seem to have some evidences in the case should hand them over to the investigating agencies and help the probe,” he told the house.


Shiv Sena’s Sanjay Gaikwad and Sheetal Mhatre too toed the line and demanded that more and more evidences should come forth.


Similarly, when members of treasury benches were pushing for revealing the details of the probe till date to the public, Shiv Sena (UBT) member Anil Parab supported the demand. “Doing that shall conclusively prove the innocence of Aditya Thackeray,” he said.

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