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If you have some money, you can make your loan installment easier by investing it in another way. Suppose you have 1 lakh rupees. A monthly installment of Rs. 1,161 on a 10-year loan of Rs. 1 lakh. But if you do SIP in mutual funds, then you can get an annual return of 12-15% per annum.
- Interest rates are still below 7%, so it is the right time to take a loan
- Loans can be repaid by depositing money in mutual funds or FDs.
A lot of people do the same with respect to the loan, which bank is giving loan at low interest, who is taking less processing fees, who is giving loan more quickly and conveniently. However, all these things end when you take a loan. But if you take care of one thing while taking a loan, then you will benefit. Try to always take a loan for a short time. This will save your money.
Think of a loan of 1 lakh as such
This is how we approach Lone’s strategy. Suppose you have taken a loan of 1 lakh rupees. If you take this loan at the rate of 7%, then you will get a monthly installment of Rs 1,980 for 5 years. That is, you have to pay 23,760 rupees every year. In 5 years, you will repay Rs 1,18,800 for a loan of 1 lakh rupees. If we look at this for 10 years, then your monthly installment will be Rs 1,161. The installment was reduced as your loan repayment time doubled.
1.39 lakh will have to be given in place of 1 lakh in 10 years
According to 1,161, you will pay Rs 13,932 in one year and in this context, you will pay Rs 1,39,329 in 10 years. If this loan becomes 15 years, then your monthly installment will be reduced to Rs 899 and you will have to pay Rs 10,788 annually. But instead of 1 lakh in 15 years, you will have to pay Rs 1,61,820. If you took this for 20 years, then the installment of the month would be Rs 775, but in 20 years you would have to pay Rs 1.86 lakh. That is, you had to pay Rs 1.39 lakh in 10 years, but in 20 years it has become Rs 1.86 lakh. You had to pay 46 thousand rupees more in 10 years.
Loan amount is high
However, this calculation is on a loan of 1 lakh rupees. Usually home loans or car loans are more. Home loan can also be 10 lakh, 20 lakh or 30 lakh rupees. Car loan can also be 5 lakh to 10 or 20 lakh. Therefore, when the loan size will increase, the savings that you will save in 10 years will be more.
Keep collecting a little bit of money
Try always, whenever you have a little money, you put it in the principal amount, and instead of reducing the installment, you reduce the time. What will happen from this is that a little money will be able to help a lot in the long run. 500-1000 rupees may be saved in the installment, but when the time decreases it decreases more.
Interest rates below 7%
Currently interest rates are below 7%, so this is a calculation. If we catch 8% interest rates, then it will save more for you. However, this is the right time to take a loan. Some states still have exemption on stamp duty and registration. Banks are still giving loans at 6.65%. The loan interest of most banks is between 6.75 to 6.90%.
You can also save money by investing
However, if you have some money, you can make your loan installment easier by investing it in another way. Suppose you have 1 lakh rupees. On a 10-year loan of 1 lakh, he is paying an installment of Rs. 1,161 monthly. But if you do SIP in mutual funds, then you can get an annual return of 12-15% per annum. That is, the interest rate of the loan is 7% and the return here is 12%. In such a situation, you can get a benefit of 5%.
Another way is to put it in the FD of a company with a good rating. Here you get 8.50% interest. Even then you are saved in 1.5% of the year.