SIP return · average EMI rate · same balance sheet
Your SIP is up 11.7% this year. Your phone EMI is at 16%. Your bike loan runs 14%. Somewhere in your head, these feel like two separate stories, running on parallel tracks. They’re not. They’re running in opposite directions, on the same balance sheet — yours.
Per-borrower debt in India climbed from ₹3.9 lakh in March 2023 to ₹4.8 lakh by March 2025 — a 23% jump in two years. Non-housing retail loans, the small stuff (personal loans, credit cards, consumer durable EMIs), now make up 54.9% of household debt and consume 25.7% of disposable income on average. Separately, roughly 60% of personal loan customers in India are running three or more active loans at once — most of them would tell you they’re debt-free because there’s no home loan involved.
“60% of what I earn goes to EMIs, 40% I’m saving” is a sentence people actually say. It isn’t saving. It’s surviving.
11.7% is the number every SIP investor knows — the Nifty 50’s long-run average across roughly 25 years, verifiable on NSE’s own data. Now look at what sits on the other side of the same balance sheet, in the same month.
| Line | Annual rate |
|---|---|
| Nifty 50, 25-year average (your SIP) | 11.7% |
| Personal loan | 11–24% |
| Credit card EMI conversion | 14–18% |
| Phone / consumer durable EMI | 14–22% |
| Credit card revolving balance | 36–48% |
This is the important sentence, said slowly: when you’re paying 16% on debt while your SIP earns 11.7%, the SIP is not building wealth. It is slowing down the speed at which your debt is destroying it. That isn’t an opinion. It’s subtraction.
Take a ₹40 lakh home loan at 8.5% over 20 years — EMI roughly ₹34,700. After year one, an increment frees up ₹10,000 a month. Two paths. Path A: start a fresh SIP at 11% for the remaining 19 years — it grows to about ₹72.3 lakh. Path B: prepay that ₹10,000 into the loan instead. The loan closes in 12.5 years rather than 20, saving roughly ₹17.6 lakh in interest; the freed-up EMI then runs as a SIP for the remaining 7.5 years, landing around ₹65 lakh plus the interest saved.
On paper, Path A wins — ₹72.3L against roughly ₹65L. But 11.7% is an average, and averages hide what happens inside real windows. Someone who actually invested from 2008 to 2015 earned a real CAGR of about 3.28%, not 11.7%. Loan interest is guaranteed. SIP returns are an average across a window you may or may not be standing in. Which is why the honest answer is neither path alone — prepay aggressively when a rate exceeds the market’s long-run average, SIP the rest, and run both only after doing the actual math.
Below 7% interest, investing generally wins over time. Above 7%, prepaying wins — the interest saved is bigger than what a SIP can reasonably be expected to return.
| Debt | Rate | Call |
|---|---|---|
| Home loan | 8.5–9% | Borderline — tax deduction softens it |
| Education loan | 9–11% | Borderline — check Section 80E |
| Personal loan | 11–24% | Kill it |
| Credit card EMI | 14–18% | Kill it yesterday |
| Credit card revolver | 36–48% | Not a conversation |
When you’re paying an EMI, you don’t own what you bought — the bank does. And the bank owns something else too: your time. The hours going into work are paying off someone else’s asset, not building yours, until the balance clears.
Three minutes. Add every EMI hitting your account — phone, bike, laptop, personal loan, home loan, credit card EMI conversions, even “no-cost” installments, since they carry real hidden cost too. Divide by in-hand salary.
Calculating DTI by memory means forgetting at least one EMI — almost everyone does. TLDR finds every active EMI across every card and account in 60 seconds, calculates your real DTI, flags anything above 7% first, and shows on one screen whether your SIP is genuinely outrunning your debt or just decorating it.
We are opening seats in batches.
Join the waitlistBe first in line when we open more seats. No spam, ever.
Interest rates, loan terms and personal circumstances vary considerably, and the 7% rule's 20-year outcomes assume returns that no individual investor is guaranteed to see. This is an explanation of how the comparison works, not investment or lending advice.
A simple, conservative heuristic: if the loan’s interest rate is below 7%, investing generally wins over time. Above 7%, prepaying wins — the guaranteed interest saved is larger than what a SIP can reasonably be expected to earn. On that basis, personal loans (11–24%) and credit card EMIs (14–18%) should be paid down before any new SIP; a home loan around 8–9% is a genuine borderline case once you factor in interest tax deductions.
It’s a worked comparison: take a freed-up EMI amount and either start a fresh SIP with it, or prepay an existing loan and then SIP whatever EMI gets freed up once the loan closes early. On a representative ₹40 lakh, 8.5% home loan, pure-SIP can edge out prepay-then-SIP on paper — but only using a 20-year average return that no single investor actually experiences in real time.
Add every EMI hitting your account — phone, bike, personal loan, credit card EMI conversions, even “no-cost” EMI installments — and divide by in-hand salary. Below 20% is comfortable. 20–33% is manageable but leaves no room for new EMIs. Past 33%, a SIP running alongside that debt isn’t really building wealth. Past 50%, RBI’s own data suggests a structural problem, not a savings one.
No — it’s a roughly 25-year average, and real 7-year windows have looked very different from it. An investor who started in 2008 and exited in 2015 earned closer to 3.28% a year, not 11.7%. Loan interest is guaranteed and immediate; SIP returns are an average across a window you may or may not be standing in when you need the money.
Full access, no credit card. TLDR Money costs ₹299 a month, or less on the annual plan.
Join the waitlist