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Valmonk

Debt

Spare money, and a loan. Which one wins?

What the loan costs you against what the market might pay, over the same stretch.

Invest or repay?

₹
The assumed return is ahead here, after tax. It is still an assumption, where the interest the loan charges is fixed.
Repaying avoids
₹8,40,846
Investing keeps
₹17,29,259
  • interest you still pay76%
  • interest you avoid24%
  • Spare ₹2,00,000
  • Loan 9%
Valmonkvalmonk.com/repay · not advice

The link carries your numbers, so whoever opens it sees this exact result. Nothing is saved on our side.

Your numbers, your assumptions. Not advice. We can't see the rest of your life. What that means.

₹2L

A bonus, a maturity, whatever you're deciding about

₹30L

The outstanding balance, not the amount you originally borrowed

% a year

Pick the closest and adjust. Your loan statement has the exact figure.

What this assumes

All editable. Change one and the answer changes with it.

years

Both sides are measured over this same stretch. Comparing interest saved over five years against growth over twenty is how this sum is usually rigged.

% a year

This one is an assumption and the loan rate is not. The loan charges what it charges; this is a number you picked. Nothing here forecasts any return.

%

Interest you avoid is not income and is not taxed. A gain is. Long-term capital gains on listed securities run at 12.5% above ₹1.25L a year, and leaving that out is the commonest way this comparison gets tilted.

How this works, and where the numbers come from

One side of this is certain and the other isn't

A loan at 11% saves you exactly 11%. It is not an estimate, it is a contract. A return of "12%" is a number somebody picked, and the range around it is wide enough to swallow the difference between the two. This tool shows both figures and the gap between them, and it says so when that gap is small enough that your assumption is the only thing deciding it.

Three ways this sum is usually rigged

Different time horizons. Interest saved over the five years left on the loan, set against investment growth over twenty. Both sides here use the same stretch, which is what the loan has left to run.

Pre-tax returns against post-tax savings. Interest you avoid is not income, so nothing is taxed. A gain is. Long-term capital gains on listed securities are taxed at 12.5% above ₹1.25 lakh a year, and leaving that out flatters the invest side by roughly the tax rate. It is counted here and the rate is yours to change.

Ignoring a deduction. Under the old regime, home-loan interest on a self-occupied property is deductible up to ₹2 lakh a year, which makes that loan cheaper than its headline rate. On the new regime there is no such deduction. Both change the answer, and neither one is left as a silent default here.

Why the loan type changes everything

At 9% on a home loan the comparison is genuinely arguable and small changes in your assumption flip it. At 42% on a credit card there is nothing to compare, no assumed return gets near it. Tap through the presets and watch where the answer stops being close.

Educational, not advice. Your numbers under assumptions you set.

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Next question

  • Can I afford it?

    Before taking the loan on: what does the monthly commitment leave you with?

  • CTC → in-hand

    Your regime decides whether that loan interest is deductible at all.