'A ₹10K raise turns into ₹86.9 lakh': Advisor’s SIP tip flips bank’s interest game

A Bengaluru couple earning ₹1 lakh each cracked the code to beat home loan interest—without making extra repayments.

In a LinkedIn post, Sujith SS, founder of Moneydhan.com and a SEBI-registered investment advisor, shared how smart investing helped a dual-income couple neutralize the interest burden of an ₹80 lakh home loan.

Back in 2022, the couple took a 20-year home loan at 8.5% interest, locking in a monthly EMI of ₹69,426. The wife shouldered the EMI, while the husband managed all household expenses. “Over 20 years, they would pay the bank ₹1.67 crore—₹80 lakh in principal and ₹86.6 lakh in interest,” Sujith wrote.

But a small tweak changed everything.

A year into the loan, the wife received a ₹10,000 monthly salary hike. “What do most people do with a hike? They spend it. A new phone. A vacation,” Sujith said. “We guided her differently.”

Instead of upgrading her lifestyle, she began a SIP of ₹8,700 per month in a large-cap mutual fund, while continuing her EMI as usual. The investment plan was simple: forget the SIP exists.

Over 20 years, she would invest ₹20.9 lakh. But at a conservative CAGR of 12%, that investment is projected to grow to ₹86.9 lakh—just enough to match and even slightly surpass the ₹86.6 lakh she’ll pay in loan interest.

“Do you see the magic?” Sujith asked. “She has completely set off the bank’s interest pain by just ignoring a single salary hike.”

Sujith argues this approach beats prepaying loans. “If you prepay, your money vanishes into the bank,” he said. “Next time you need capital, you’ll again go to the bank for another loan. But if you invest, the money stays in your control.”

The takeaway? Strategic investing, not aggressive prepayment, can be the smarter path to financial freedom—especially for disciplined, dual-income households.