How does the 'Loan Recovery' SIP work?

By investing a small percentage of your EMI into an equity SIP, you allow the power of compounding (typically 12-15% CAGR) to work against the reducing balance interest of your loan (typically 8-9%), eventually cancelling out the interest cost.

EMI vs SIP Multiplier

Visualize how a SIP of the same amount as your EMI can effectively make your loan 'free' over time.

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Quick Summary: EMI vs SIP Multiplier

The EMI vs SIP Multiplier strategy involves starting a SIP equal to 10-20% of your loan EMI. Over a 20-year home loan, the wealth created by the SIP often exceeds the total interest paid on the loan, effectively making the loan 'interest-free' in FY 2026-27.

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Regulatory Disclaimer

Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

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