Prepay vs Invest
Should you close your loan early or build wealth via SIP?
Loan Details
₹40,00,000
8.5%
20 Yrs
Extra Amount Mode
₹10,000
Prepayment Frequency
Investment Details
12%
Nifty 50 has delivered approximately 12% CAGR over the last 20 years.
Tax benefits are calculated based on current Indian Income Tax laws (Section 24b and 80C). Actual benefits may vary based on your specific tax situation and the new vs old tax regime.
Prepay
Scenario A
Interest Saved
₹19.7 Lakhs
Loan Closes In
11.9 Yrs
Tax Saved (24b)
₹5.62 Lakhs
Net Benefit
₹14.07 Lakhs
Invest in SIP
Scenario B
SIP Corpus
₹30.42 Lakhs
Tenure
11.9 Yrs
Tax Saved (80C)
₹9.61 Lakhs
Net Benefit
₹-3.29 Lakhs
🏠 Prepaying wins by ₹17.36 Lakhs
SIP needs to return 17.39% p.a. for investing to beat prepaying
Net Worth Over Time
Prepay vs Invest Comparison
Break-even Analysis
12%
Current Return
Prepaying beats investing
Break-even at 17.39%