If you build or buy a home loan, interest is charged by the banks. This interest comes with our EMI, which we have to pay every month. Sometimes our monthly and yearly budgets also get spoiled in terms of EMI. Currently, home loan rates are being cut by banks. This is also the right time to buy a house, but we should keep an eye on interest rates. Because of compound interest, scientist Albert Eintin has said that it is like the eighth wonder of the world. That is why he who understands it earns money from it and he who does not understand loses his money. Suppose Ravi has recently bought a house in Bengaluru.
For this, he has taken a loan of Rs 50 lakh for 20 years at an annual rate of 9%. Ravi’s EMI was Rs 44986. By the time Ravi will repay the entire loan amount, he will have paid Rs 1.08 crore. At 50 lakh rupees, he would have paid 58 lakh interest. With this, you can take time to know how much interest is charged on the home loan. Now the question arises whether Ravi can reimburse this amount given as interest. Can he recover it from elsewhere or earn such amount from elsewhere. Yes, why can’t he earn this amount? This information is being given through this article. Let’s see –
How to Reimburse Home Loan EMI?
If you invest only a part of the EMI of a home loan in a good mutual fund scheme, you can reimburse the interest paid on the home loan. Just invest in mutual funds through SIP and reimburse the interest paid on the home loan.
Realize the EMI of a home loan by investing in a mutual fund
Suppose Ravi invests 7 thousand rupees every month through SIPs in equity mutual funds. This amount is very less for a rich businessman and even a person with good salary can invest this amount. Ravi invested for 20 years till the end of the home loan period through SIP. Suppose he received an average return of 11% on it. Now you can guess how much total return he would have received. You can calculate the investment received over 20 years through SIP using Indian Money Investment Calculator. By calculating, you will find that by investing in SIP, he got more than 61 lakh rupees. This means that Ravi has reimbursed the interest on the home loan. Thus we can see that by investing a portion of EMI amount in SIP, we can reimburse the interest and it is easy.
Why invest in mutual funds through SIP to reimburse interest paid on home loan?
If you can manage to pay the EMI of a home loan, then you can also invest a part of that amount in a mutual fund. However, many people are afraid to invest in equity because they think they will lose their hard-earned money. But this is not completely true. Equity mutual funds invest in stocks from different sectors. You can benefit by diversifying your investment portfolio. Investing in equities for a long period gives good returns. It is true that stocks fluctuate, but this volatility does not last long.
So if you stay invested in it for a long period, then this investment is considered quite safe and it also gives good returns. It is best to invest in mutual funds through SIP. Through this, if you invest only 500 rupees a month for 35 years, you can get up to 97 lakh rupees. 500 rupees is a small amount. Everyone can invest it easily. Investment in mutual funds is regulated by SEBI.
In addition, AMFI is also running the program Mutual Fund is right to make people aware of mutual funds. The purpose of this program is to inform and educate investors about the benefits of investing in mutual funds. Investing in mutual funds through SIPs provides compounding returns. Along with this, invest in mutual funds based on your savings, means of income and risk-taking ability. Mutual funds provide higher returns at higher risk. Also, it is better to invest through SIP with experience and information.