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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.)

Unrest within Mahayuti

Writer: Abhijit Mulye
Abhijit Mulye
Jan 20, 2025
2 min read

Updated: Jan 21, 2025

Mahayuti

Mumbai: The state administration on Sunday stalled the appointments of guardian ministers in Raigad and Nashik districts. Chief Minister Devendra Fadnavis had cleared the appointments before he left for Davos in Switzerland to attend the World Economic Forum on Saturday. They are believed to have been stalled on behest of Deputy Chief Minister Eknath Shinde, who heads the state in absence of the Chief Minister.


NCP’s Aditi Tatkare and BJP’s Girish Mahajan were entrusted with responsibilities of guardian minister for the Raigad and Nashik districts respectively, where Shiv Sena’s Bharat Gogawale and Dada Bhuse had staked claims. Gogawale is a first-time minister while, Bhuse had been the guardian minister of the district during previous government under Eknath Shinde.


Shiv Sena, NCP and BJP all the three constituents of Mahayuti have strong roots in both the districts. However, the Shiv Sena and the NCP had been particularly on loggerheads there. The Shiv Sena, which had been demanding the guardian minister’s post in Nashik district has managed to win only two assembly seats in the district where the NCP has Six and the BJP has Five MLAs. On the contrary, in Raigad the NCP has won only one seat while the Shiv Sena and the BJP both have Three MLAs each in the district.


Sunil Tatkare, MP from Raigad Lok Sabha constituency and the stat unit president of the NCP and father of Aditi Tatkare, had been the guardian minister of Raigad between 2004 and 2014. Gogawale had always been his political opponent before Tatkare joined the Mahayuti government under Ajit Pawar’s leadership in 2023. Gogawale claimed that all the Six Shiv Sena-BJP MLAs in the district had opined in his favour to be the guardian minister of the district and after the decision to appoint Aditi Tatkare was announced, his supporters resorted to violent protests. They burnt tyres in bid to stall traffic on highway in the district. Reacting to the developments, Tatkare said that the issue should be pondered over after CM Fadnavis returns from Davos on Saturday and settled amicably.


In Nashik Girish Mahajan had been the guardian minister of the district between 2014 and 2019 when Fadnavis was the Chief Minister.


The post of guardian minister doesn’t have any constitutional mandate and is considered to be a political appointment. Guardian ministers head the district planning and development councils (DPDC) that control the funds for development works being carried out in the particular district. This control wields much of political power to the minister in that district whereby spreading the party in the district becomes much easier. This is the reason why the grass root politicians seem to be very sensitive to such appointments.


While Gogawale and Bhuse are unhappy about not being appointed as guardian ministers, some others like NCP’s Hasan Mushrif and BJP’s Pankaja Munde are unhappy about not being appointed as guardian district in their home districts of Kolhapur and Beed respectively. DCM Shinde is learnt to have gone to his ancestral village Dare in Satara district after the decision and BJP’s firefighters Chandrashekhar Bawankule and Girish Mahajan are expected to meet him there to try finding a way out of the issue.

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