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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.)

Tibetans, Nepalis worry, pray for kin

Quaid Najmi
Aug 28
3 min read
Thakkar Bapa Vidyalaya Samithi students during a candle prayer vigil in Chennai on Friday for the victims and survivors of the flash floods in Nepal. Pic: PTI
Thakkar Bapa Vidyalaya Samithi students during a candle prayer vigil in Chennai on Friday for the victims and survivors of the flash floods in Nepal. Pic: PTI

Mumbai: Thousands of Tibetans and Nepalis settled in Mumbai and parts of Maharashtra are worried stiff about their relatives, friends and other citizens in their native countries hit by the devastating avalanche and floods in the Himalayan region.


An estimated 1000 Tibetans and more than four-lakhs Nepalis live in Maharashtra and Mumbai engaged in various professions or academics. Friends of Tibet (FoT) Coordinator Tenzin Tsundue and United Nepali Organisation (UNO) Advisor Bharat Rawal are liaising with the Indian, Nepal and Tibetan authorities for information sought by their respective members.


The Tibetans are particularly anxious as communication lines are still not restored or restricted by the local authorities, making contacts with families difficult, said Tsundue.


“Though details are sketchy and blocked by the Chinese authorities, there is a suspicion that at least 14 small-to-medium hydro-power plants, including 5 under construction, on the rivers in the Rasuwa and Nuwakot areas, along with dams, diversion structures and cofferdams could have played a role in triggering or aggravating the situation,” Tsundue told ‘The Perfect Voice’.


He claimed that in and around the Kyirong County – the lowest and greenest in Tibet’s southern region, where the avalanche and floods originated on Wednesday - “at least 400-500 are feared missing” although the official figures by China are different.


“As per current information available, evidence points to the initial floods being generated upstream in Tibet, rather than the Nepal hydropower stations,” added Tsundue.


Rawal said that so far one member from Thane, Santosh Niraula has confirmed that his niece, Richa Niraula, working as an engineer in the Upper Trishuli – one of the worst-hit regions – is missing and he has rushed there to join the search and rescue operations.


“Following a request from Deputy Chief Minister Eknath Shinde, Nepal’s dynamic GenZ leader and Rashtriya Swatantra Party MP, K. P. Khanal, 26, immediately helped in tracing, rescuing and arranging for the return of at least 37 pilgrims from Maharashtra stuck in the floods on the Tibet-Nepal borders,” Rawal told ‘The Perfect Voice’.


No Information

A Nepali eatery co-owner in Malad Geeta Rana said that her entire family of Ranas is stuck in Chitwan, a tourism haven, with little or no information reaching Mumbai as communication and power lines are affected, and there are reports of other Nepalis facing a similar ordeal in different parts of their homeland, especially in Dhading and Nuwakot districts.


290 tourists from Maharashtra stranded but safe

Mumbai: As many as 290 people from Maharashtra are stranded but confirmed safe in various parts of Nepal following the devastating flash floods while 60 tourists are still untraceable, a state government official said on Friday.


Further, 105 people from Maharashtra who were in Nepal at the time of the tragedy are on their way back to India, said the State Disaster Management Department official.


Sixty people from the state who were on a Nepal tour organised by Mumbai-based Richa Tours Pvt Ltd could not be contacted, he said.


“So far, 395 people from Maharashtra have been confirmed to be stuck in Nepal. Of these, 105 are on their way back to India, while our control room has established contact with the remaining 290 people, who are safe but stranded in various parts of Nepal,” he added.


As many as 37 pilgrims who were stranded in Tibet after completing the Kailash Mansarovar Yatra left for Kathmandu on Friday morning following Chief Minister Devendra Fadnavis’s intervention.


According to the Chief Minister’s Office, the group, which includes pilgrims from Thane, Pune, Raigad, Alibag, and Dombivli, left Saga in Tibet around 6 am via the Nyalam check-post and is travelling towards the Nepalese capital. Their return flight from Kathmandu is scheduled for 2 pm on August 29, the CMO statement said.

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