Know what is Right: 30% Increase in Salary after Getting a New Job, Repay Home Loan first or increase the SIP amount
Experts say that most of the home buyers today are paying interest at the rate of 9%.
Recently many people have changed jobs after getting increment. After getting the new job, his salary has increased by 30 percent to 40 percent.
In such a situation, they do not understand how to increase the SIP amount or repay their home loan before making the prepayment. We are telling you the solution to this dilemma, if you are also there.
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Know what is beneficial
Financial experts say that if a person’s salary has increased, then it would be right to increase the SIP because SIP invests in shares. In the long run, equity will give much higher returns than the interest being paid on the home loan.
Moreover, if he decides to repay the home loan first, he will incur a loss overall. In 10 years, the decision to repay the home loan prematurely will reduce one’s wealth. His net worth will be higher if he increases SIP.
Why the deal of paying home loan early is is disadvantageous?
Experts say that most of the home buyers today are paying interest at the rate of 9%. At the same time, if you invest 12% for long term in direct plan and 12% in regular plans of mutual fund, you will get a return of 13.5%.
That means you will get returns in mutual funds and not in home loans. Therefore increasing SIP is beneficial.
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