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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.)

Shattered Narrative

Jul 20
2 min read

The recent claims made by Noreen Niazi, sister of former Prime Minister Imran Khan, completely expose Pakistan’s military myth-making and underline the widening gap between India’s capabilities and Islamabad’s illusions.


In a widely circulated interview, Niazi challenged the official Pakistani account of the confrontation that followed the Pahalgam terror attack, claiming that the country’s military leadership concealed the true extent of India’s military advantage during Operation Sindoor last year. Her most striking assertion, that Prime Minister Narendra Modi “could have fixed Pakistan” had India chosen a more aggressive course, has predictably triggered fury in Pakistan because it strikes at the very foundation of the establishment’s self-image.


Pakistan’s military establishment has always survived not merely through coercive power but the manufacture of perception. Its most enduring weapon been the narrative that Pakistan possesses an equal strategic footing with India despite the overwhelming differences in economic scale, technological capacity and military depth. That carefully constructed illusion has suffered a remarkable blow from a family member of Pakistan’s own most prominent political prisoner.


Niazi’s remarks shatter the reputation of Pakistan’s most powerful institution — the army headquarters in Rawalpindi — and its current chief Asim Munir, considered the mastermind of the Pahalgam massacre. Pakistan’s generals have always presented themselves as the ultimate guardians of national security, using confrontation with India as both a strategic doctrine and a domestic political instrument. Niazi’s statements have thoroughly exposed this hollow claim.


The statements also expose United States President Donald Trump’s repeated assertion that his intervention apparently helped bring an end to the confrontation, which saw the Indian armed forces striking deep into terror bases within Pakistan.


The episode should also force a rethink within India. For months, sections of the domestic political ecosystem questioned the government’s handling of security matters, sometimes treating every military assertion through the prism of partisan suspicion. While a democracy must permit scrutiny, mindless scepticism cannot become reflexive cynicism, particularly when national security decisions are involved.


The credibility of India’s armed forces cannot be reduced to domestic political contests. Nor can strategic assessments be shaped by ideological preferences. Countries are judged not by the volume of their arguments but by the strength of their institutions.


The Pahalgam attack was intended to project vulnerability in India and undermine the confidence of a rising power. Instead, it produced the opposite effect. With Operation Sindoor, India demonstrated that it would make Pakistan’s terror affiliates pay dearly while retaining the diplomatic and military maturity to control escalation.


The significance of this episode lies in the fact that the age in which Pakistan could use terror, brinkmanship and propaganda to maintain an artificial balance is drawing to a close. For decades, Islamabad relied on a combination of terror, international intervention and the assumption that India would exercise restraint regardless of provocation. That calculation has become hopelessly outdated.

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