SIP vs. Loan Prepayment: The Ultimate Financial Dilemma

You have a surplus of ₹10,000 per month. Should you use it to prepay your home loan (earning ~8.5% in saved interest) or invest it in a Systematic Investment Plan (SIP) that could potentially earn 12% or more?

This is a classic financial crossroads. Prepaying your loan is a guaranteed, risk-free return. Investing in a SIP offers the potential for higher returns through market growth but comes with inherent market risks. The right choice depends on your risk appetite, financial goals, and market outlook.