Today, many people are fulfilling their dreams by taking a loan. Getting a loan has also become easier than before, but it also has a big concern like interest burden. When 15-20 years pass while paying the EMI of the loan and later calculate that you have paid more money than the real amount.
But do you know that there is a smart way that you can also fill the loan installments and finally get the same money back as you have paid to the bank with interest? Let us understand how we can recover the interest on loan…
Suppose you have taken a loan of ₹ 10 lakh, whether it is a home loan or a car loan. If the loan duration is long, then every month's EMI decreases slightly, but you can pay even double the amount. The interest gradually takes out a large part from your pocket. To avoid this, as soon as your EMI starts, start a SIP (Systematic Investment Plan) from the same day. SIP means investing a little money in mutual funds every month.
You need to apply about 20-25% of EMI in SIP every month. The advantage of this will be that as you repay the loan, the return on your investment will also increase and by the time the loan is over, you will have a good fund ready, which will recover the interest on your loan.
Suppose you took a home loan of ₹ 30 lakh for 20 years and the interest rate is about 9.5%. Your monthly EMI will be around ₹ 28,000. In 20 years, you will pay a total of ₹ 67 lakh bank, which will have only ₹ 37 lakh only interest. Now if you apply 25% of EMI i.e. ₹ 7,000 in SIP every month and run it for 20 years, then according to 12% annual return, your fund will be around ₹ 64 lakh, so that you can recover your full interest.
