Loan Strategy Comparison

Same setup, three strategies. You have a fixed monthly cashflow to deploy and a loan to service over a long horizon. The three strategies differ only in how you split your cashflow between EMI and SIP, and the time-in-market gap is what shows up at horizon end.

Bank's Advice · Sequential 20+10

Pay off loan first, then invest

Bank logic: get debt-free fast, then start SIPs. Take a 20-yr loan, use all spare cashflow to pay EMI, only start SIP for the last 10 years.

Loan tenure—

Total interest paid—

SIP starts at month—

SIP duration—

Net Worth at Horizon End

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Client's Instinct · Rush 15+15

Aggressive prepayment, then catch up

Client logic: clear the loan even faster (15-yr tenure with higher EMI), then deploy full cashflow as SIP for the remaining 15 years.

Loan tenure—

Total interest paid—

SIP starts at month—

SIP duration—

Net Worth at Horizon End

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NLE's Choice · Parallel

Long loan + immediate SIP, in parallel

Take the longest available tenure (matches horizon), pay only minimum EMI, route everything else into SIP from month 1. Maximises time-in-market.

Loan tenure—

Total interest paid—

SIP starts at month—

SIP duration—

Net Worth at Horizon End

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Wealth Build-up Across Horizon

Each line tracks (SIP value − outstanding loan balance) over time. NLE's parallel approach starts compounding from month 1, while the Bank's wait-and-then-invest plan starts only after 20 years. That difference is the visible gap.

Loan

Cashflow & Horizon

Pay off loan first, then invest

Aggressive prepayment, then catch up

Long loan + immediate SIP, in parallel

Verdict

Wealth Build-up Across Horizon

See Also