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Home Loan at 0% Interest

Discussion in 'Investment Analysis' started by shabbir, Sep 14, 2016.

  1. shabbir

    shabbir Administrator Staff Member

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    @shreeux shared this on Whatsapp

    Home Loan @ 0% Interest

    Do you know❔
    -------------------------------
    You can get back all your Home loan interest you pay through EMI's.

    How❔
    -------------------------------
    If you avail Home loan of 10 lacs for 20 years with an interest rate 9.5% your.....

    Monthly EMI: Rs. 9,321.31/-
    Principal Amt : Rs. 10,00,000/-
    Interest Payable : Rs. 12,37,144/-
    Total Amt Payable: Rs.22,37,115/-

    -------------------------------
    Now to get back your interest you just have to keep aside 0.10% of your home loan amount.
    ie 0.10% of 10,00,000/- is 1,000/- per month till the tenure of your home loan.

    Start an SIP Till the tenure of your home loan with the amount you are keeping aside. (ie Rs. 1,000/-)

    -------------------------------
    what will be value of Rs. 1,000 pm @15% if invested through SIP❔

    After 20 years ➡

    Principal Amt: Rs. 2,40,000/-
    Value@ 15%: Rs. 14,97,239/-

    -------------------------------
    In Home Loan you pay an Interest of Rs. 12,37,144/- in 20 years.
    While in Mutual fund SIP you generate a wealth of Rs. 12,57,239/- which is more than the Interest amount you are paying in next 20 years.

    Start your SIP now and enjoy interest free home loan.

    Let the learning continue..
     
    shabbir, Sep 14, 2016
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  2. mannbsk

    mannbsk New Member

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    Very interesting
     
    mannbsk, Sep 14, 2016
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  3. shabbir

    shabbir Administrator Staff Member

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    So true.
     
    shabbir, Sep 14, 2016
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  4. shreeux

    shreeux Member

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    Which Mutual Fund to park money for prediction ...that is the million dollar questions?
     
    shreeux, Sep 14, 2016
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  5. vilasnagare

    vilasnagare Member

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    Shabbir. I have a question here. Suppose currently I am investing in MF which are performing well. If due to some reason same funds are underperforming after 2 years then what should be the decision. Redeem all Units and Invest in MF which is Performing at that time? Or We keep the holding as it is for long term?. What is actually the strategy for that?

    Thanks
    Vilas Nagare
     
    vilasnagare, Sep 14, 2016
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  6. shabbir

    shabbir Administrator Staff Member

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    Vilas, it is about knowing the reasons for everything. If you understand that why some fund is not performing, you can take an informed decision. Let's say the fund is under-performing because it has invested in stocks in same sector but those have not performed compared to others or they have exposure to other sectors when compared to same fund in the same category then it does not make sense to be making a switch but if the fund does not perform because fund manager has done some blunders or is investing in stock that diverts itself from its benchmark then it does not make sense to be remain invested in such funds.
     
    shabbir, Sep 14, 2016
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  7. rajesh_gaikwad

    rajesh_gaikwad Member

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    Yes, Very true .
     
    rajesh_gaikwad, Sep 14, 2016
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  8. Suresh_Sinha

    Suresh_Sinha Active Member

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    Awesome.
     
    Suresh_Sinha, Sep 18, 2016
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  9. manickarajan

    manickarajan Responder

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    If I take personal loan for 6 lakhs at 14% interest for 5 years will this work like investing 600 for 5 years

    Sent from my Redmi Note 3 using DIY Technical Analysis mobile app
     
    manickarajan, Dec 4, 2016
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  10. manickarajan

    manickarajan Responder

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    manickarajan, Dec 4, 2016
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  11. shabbir

    shabbir Administrator Staff Member

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    Investing 600 for 5 years means?
    What is not working?
     
    shabbir, Dec 4, 2016
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  12. manickarajan

    manickarajan Responder

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    Investing 600 (.10% of loan amount) for every month.will it recover interest payable for personal loan as per above example

    Sent from my Redmi Note 3 using DIY Technical Analysis mobile app
     
    manickarajan, Dec 4, 2016
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  13. rrjain319

    rrjain319 Member

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    Hello,

    The above calculation will work only if the loan tenure is more than 20 years, it will not work correctly for less tenure..

    For your case,

    If you take loan of 6 lakhs at 14% interest for 5 years, at the end you will paying interest of approx Rs 2,37,657

    With Rs 600pm and assuming 15% return, you would need to invest for min 12 years to recover interest component..

    Below is summary of your wealth (investment @ 6oo pm and return at 15%)
    5 years --> 0.5 Lakhs
    8 years --> 1.1 Lakhs
    10 years --> 1.7 Lakhs
    12 years --> 2.4 Lakhs
    15 years --> 4.1 Lakhs
    18 years --> 6.6 Lakhs
    20 years --> 9.1 Lakhs
    22 years --> 12.4 Lakhs
    23 years --> 14.5 Lakhs

    Inorder to recover your interest component in 5 years you would need to invest min Rs 3000 pm..

    5 years --> 2.7 Lakhs

    Hope this helps..

    Regards,
    RJ
     
    rrjain319, Dec 4, 2016
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  14. manickarajan

    manickarajan Responder

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    manickarajan, Dec 5, 2016
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  15. jaimal_dtm

    jaimal_dtm Member

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    Sounds good

    Sent from my SM-G570F using DIY Technical Analysis mobile app
     
    jaimal_dtm, Dec 8, 2016
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  16. techsridhar10

    techsridhar10 New Member

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    How to select such fund

    Sridhar
     
    techsridhar10, Dec 26, 2016
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  17. Suresh_Sinha

    Suresh_Sinha Active Member

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    Using valueresearchonline but also why find more such fund and use the same fund


    Sent from my iPhone using DIY Technical Analysis mobile app
     
    Suresh_Sinha, Dec 27, 2016
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