Investment vs Loan: Which to Choose?

When considering borrowing, weigh the expected return from investments against the effective cost of the loan (interest + fees). If your investments reliably earn more than the loan cost after taxes and risk, investing may make sense. Otherwise, paying down debt is usually safer.

Questions to ask

• What is the guaranteed vs expected return on investments?
• What are loan processing fees, prepayment penalties, and taxes?
• Does the loan create liquidity or cashflow constraints?

Model both options with the EMI Calculator and an investment return scenario to make an informed decision.