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Got an extra ₹10,000/month? Should you prepay your home loan or invest in mutual fund SIPs? This calculator runs the numbers so you don't have to guess.
Historically, Nifty 50 index funds have returned ~12% CAGR over 15+ year periods. For conservative planning use 10–11%. For large-cap equity mutual funds, 10–12% is reasonable. Never assume past returns will repeat.
Prepaying reduces your outstanding loan, which reduces future interest. Since Section 24(b) allows deduction of up to ₹2L on home loan interest for self-occupied property, prepaying reduces this deduction — it's a trade-off. For investment property, full interest is deductible.
If your SIP is expected to deliver 12% and you are in the 30% tax bracket, your effective loan rate threshold is roughly 8.4% (12% × (1 – 0.30)). Below this rate, SIP wins. Above it, prepayment wins.
Absolutely. Many advisors recommend a hybrid approach: make one or two extra EMI payments per year (reduces tenure) while continuing SIPs. This balances debt reduction with wealth creation.
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