Where to invest my 5L to pay EMIs of the loan

I took a loan of 5L, interest 11.75%
I want to invest this money in the market to pay the loan emi. What is the best way to earn high profits.

Do you think it is the best way to take loan and then invest? I’m not able to save any penny from last 5 years, so thought of taking loan(invest the money) and repay the emi instead of saving the money.

How should I plan about my investments?

Loan and stock market dont go hand in hand

That too you are entering at election time, everyone is saying buy buy buy. What if Modi loses? The 5L will become 1L before May month is over.


Better to wait for sometime?

Took loan to save the loan money.
I’m earning decent salary from the starting but no savings :sweat_smile:

Thought of taking loan and save that money and pay the loan emi using the salary.

Then new thought pop up saying invest the loan money and get income from it and pay the emi.

pick low pe companies with projection of higher earning growths for next 3-5 years ,although we are in bull market but after good research you may be able to find good stock at reasonable price .

Do you think can I go with some case in smallcase ?

Or any fd in banks or mutual funds helps?

smallcase as a concept is quite good but personally i donot think we can outperform market with smallcase or any mutual fund ,so in order to create decent wealth one should have to take his own stand in market and otherwise if your looking for above fd returns say 13-14% then go for mutual funds

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If you invest yourself, its difficult to do it. You will see positions in red and get panic and sell in loss etc.

If you invest via mutual funds, returns wont be uniform. First few months it may give only 5%, then suddenly 20% and so on.

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Any suggestions on which mutual funds to invest?

The idea is good as you are unable to save this is good one even though you pay interest and interest rate is also in in acceptable range so no problem but the question here is how you are going to utilise the fund ,wait for few months as it is election time and also allocate funds properly.you should decide how you will your emi coverage should be like you will pay emi from salary or from income generated from the capital or from both…all the best

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MF’s are dead now a days 3-5 p.a

This is not a prudent idea. You have taken a loan at 11.75% so you need to earn more than that in stock market consistently if you are planning pay off the loan thru stock market investment. Over a long term you may be able to ear more than 11.75% via equity investment but remember that you need to pay emi every month. So I guess your intention is to start trading. The way you had asked the question I can safely assume that you are new into the world of investing and trading. There are high chances that you will lose your entire capital if you are not very careful about it. You mentioned that you earn a good salary but not able to save much. Don’t you think that you need to first fix that problem? Start budgeting and tracking all your expenses and I am sure you will find a way to save some money every month. Set up a SIP and start accumulating money slowly and at the same time start learning about trading and trading psychology. Once you have accumulated some money you can start trading with some of that which you can afford to lose. When you have a pressure of paying EMI every month and if you are going depend on your trading income for that you will make some silly mistakes and that can cost you. I am talking from my personal experience and I am not just preaching you. If you are a seasoned trader and you have been generating returns in excess of 12% for the past few year then taking a loan to add to your trading capital may not be a bad idea. But I don’t think we are there yet.


Yes repaying loan is not a matter for few months it takes few days to get loan and years to repay

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Can you suggest where I can put my 5L if I choose to pay the emi using the salary?

So you think that what fire55 said it is perfect yes he is right but not after you took the loan

I noted his points. I will implement tracking my expanses and will eliminate the unnecessary. :blush:

I would suggest close the loan right now and start investing the monthly emi in a equity multicap SIP. As you mentioned you wil pay the emi from your salary. why don’t you consider that as your savings and start investing instead of servicing a loan emi. As per my calculation you will need to pay an emi of approx 11000 to pay off your personal loan in 5 years. This means you will be paying a total of approx 1.75 lac as interest only. There are no investment that can guarantee you a return of 12% but your best bet is equity investing. If you hold it for long term and if you have chosen the MF or stocks carefully you may be getting a better return . But nothing is guaranteed. For a moment think of the personal satisfaction and the feeling you will have when you are able to save and invest 11000 every month systematically with out any loan burden. That feeling is something which has to be experienced.


If he forecloses loan now he will have to pay the entire loan amount + interest fully now in any bank

Are you sure ? If you want to go for a pre closure you may have to pay certain % of the outstanding . Again it differs from bank to bank. Axis and SBI allows preclosure with out any penalty.

I can’t close it. There is a lockin period 1 year

Ok. Then for the 1 year I would say you start investing the same emi ( 11 K) into a equity MF via SIP. Choose a multicap fund and over the long term you should do well. If you plan to withdraw this amount after 1 year then park them in Debt funds.

I believe you have some emergency fund built and parked in a FD or liquid mutual fund. The biggest mistake that many of us do is that we invest everything into equity and when a need arise in short term we have to dip into these funds since we don’t have anything saved. Then we come and blame that equity investment is risky and is giving only negative return. Please remember that equity investing is for long term and if you choose your fund or stock carefully over the long term no other instruments can give you better return than equity. Problem with retail investor is that we are short sighted and want to park everything in equity even when we know that we will need the fund in 6 months to 1 year. Before even venturing into equity investment you have to have some money kept aside for your immediate needs. Otherwise you will never benefit from equity investing and will join the group of millions who is constantly blaming stock market for their losses.