Understanding Mutual Funds

 

Methods of Budgeting

 

Interest Calculation - Simple & Compound

 

New Year Wishes

Dear all,

Wishing you a warm festive season and new year wishes for 2026!

                                                                                 Love

                                                                        Anoop Purushothaman

Finance Tips for Students

 

Stock Market - Beginners Guide

 

Investment Planning in India

As India continues its trajectory toward becoming the world’s third-largest economy, the landscape of personal finance is evolving rapidly. In 2025, investment planning is no longer just about "saving" for a rainy day; it is about strategic asset allocation to outpace inflation and leverage the country’s structural growth. Whether you are a salaried professional or a business owner, a robust investment plan is the bridge between your current financial status and your future aspirations.

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1. Defining Your Financial Architecture

Investment planning begins with a clear blueprint.Before choosing a product, you must categorize your goals by time horizon:

• Short-Term (0–2 Years): Goals like an emergency fund, a vacation, or a down payment. Focus here is on liquidity and capital preservation.

• Medium-Term (3–7 Years): Funding a child’s primary education or starting a business. A balanced approach between debt and equity is ideal.

• Long-Term (7+ Years): Retirement planning or buying a home. Here, compounding is your greatest ally, making equity-heavy portfolios preferable.

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2. High-Growth Avenues: The Equity Frontier

For long-term wealth creation, equities remain the undisputed leader in the Indian market.

• Mutual Funds & SIPs: Systematic Investment Plans (SIPs) have democratized investing in India. By automating a fixed monthly contribution, you benefit from Rupee Cost Averaging, buying more units when the market is low and fewer when it is high. For 2025, diversified Large-cap and Multi-cap funds offer stability, while Small-cap funds provide aggressive growth potential for risk-takers.

• Direct Equity: For those with the time and expertise to research, direct stock picking can yield market-beating returns. Focus on sectors benefiting from India’s "Manufacturing Renaissance," such as semiconductors, renewable energy, and digital infrastructure.

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3. Safety and Stability: Fixed-Income Instruments

A balanced portfolio needs a "shock absorber." Debt and fixed-income instruments protect your capital when equity markets turn volatile.

• Public Provident Fund (PPF): Still a gold standard for risk-averse Indians, PPF offers government-backed safety with a competitive interest rate (currently around 7.1%). It falls under the EEE (Exempt-Exempt-Exempt) category, meaning the investment, interest, and maturity are all tax-free.

• Debt Mutual Funds: These are more tax-efficient than traditional Fixed Deposits (FDs) for those in higher tax brackets, especially if held for the medium term.

• Sovereign Gold Bonds (SGBs): Instead of physical gold, SGBs offer a 2.5% annual interest plus capital appreciation linked to gold prices, with no storage worries and tax-free maturity if held for 8 years.

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4. Strategic Tax Planning (The 2025 Context)

With the shift toward the New Tax Regime, the traditional reliance on Section 80C is diminishing for many. However, for those still under the Old Regime or looking for long-term discipline, tax-saving investments remain vital:

Investment	Lock-in Period	Risk Level	Benefit
ELSS (Tax Saving Mutual Funds)	3 Years	High	Market-linked growth; 80C benefit
National Pension System (NPS)	Until age 60	Medium	Additional ₹50,000 deduction; retirement focus
Sukanya Samriddhi Yojana	21 Years	Low	High interest for girl child education

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5. The Golden Rules of 2025 Investing

To succeed in the current Indian market, keep these three principles in mind:

1. Don't Ignore Inflation: A 7% return on a bank FD might look good, but if inflation is 6%, your real growth is only 1%. You must have equity exposure to build real wealth.

2. Asset Allocation is Key: Do not put all your eggs in one basket. A typical "Balanced" portfolio in India might look like 60% Equity, 30% Debt/Fixed Income, and 10% Gold.

3. The Emergency Fund First: Before you invest a single rupee in the stock market, ensure you have 6 months of expenses in a high-interest savings account or liquid fund. This prevents you from withdrawing your long-term investments during a personal crisis.

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Conclusion: Starting Today

The biggest risk in investment planning is procrastination. In a growing economy like India    ’s, the cost of waiting is high. Start with a small SIP, utilize the government-backed safety of PPF, and gradually increase your exposure as your confidence grows. Wealth in India is built through discipline and time, not by timing the market.

Cashless vs. Reimbursement: Which Path Are You On?

Navigating the world of health insurance can feel like learning a new language, especially when you are already dealing with the stress of a medical emergency. However, understanding the claims process is the single most important step in ensuring your policy actually works for you when you need it most.

​This guide breaks down the two primary types of claims, the step-by-step filing process, and the "golden rules" to avoid a dreaded claim rejection.

​1. Cashless vs. Reimbursement: Which Path Are You On?

​Before you even step into a hospital, you need to know which type of claim you will be filing.

​Cashless Claims (The Preferred Option)

​In a cashless claim, the insurance company settles the bill directly with the hospital. You only pay for "non-medical" expenses (like gloves, tissues, or registration fees).

• ​Requirement: You must be treated at a Network Hospital (a facility that has an agreement with your insurer).

• ​Benefit: Minimal out-of-pocket expense and less paperwork for you.

​Reimbursement Claims

​If you choose a hospital outside the insurer's network, or if your cashless request is denied, you must pay the entire bill yourself and then apply to the insurance company to get your money back.

• ​Requirement: Can be done at any registered hospital.

• ​Drawback: Requires significant upfront cash and meticulous record-keeping.

​2. Step-by-Step Guide to Filing a Claim

​Step 1: Intimation (Notification)

​Timing is everything. You must inform your insurance company or Third Party Administrator (TPA) about the hospitalization.

• ​Planned Treatment: Notify the insurer at least 48 to 72 hours before admission.

• ​Emergency: Notify within 24 hours of admission.

​Step 2: Pre-Authorization (For Cashless Only)

​At the hospital’s insurance desk, fill out the "Pre-Authorization Form." The hospital will send this to your insurer along with your medical records. The insurer will then issue an approval letter stating how much they will cover.

​Step 3: Treatment and Documentation

​Focus on recovery, but ensure someone is keeping track of the paperwork. Every single receipt—from a 10-rupee tablet to a major surgery—must be saved.

​Step 4: Discharge and Final Submission

​Upon discharge, collect the Discharge Summary, which details the diagnosis and treatment provided.

• ​For Cashless: The hospital sends the final bill to the insurer. You pay the remaining non-medical balance and leave.

• ​For Reimbursement: You pay the full bill, collect all original documents, and submit them to the insurer within 15 to 30 days.

​3. The Essential Document Checklist

​Missing even one document can stall your claim for weeks. Ensure you have:

• ​The Claim Form: Duly filled and signed (Part A by you, Part B by the hospital).

• ​Discharge Summary: Original copy is mandatory.

• ​Original Bills & Receipts: Itemized hospital bills and payment receipts.

• ​Prescriptions & Pharmacy Bills: Linked to the diagnosis.

• ​Diagnostic Reports: Original X-rays, blood tests, or CT scan reports.

• ​KYC Documents: A copy of your ID (Aadhaar/PAN) and a cancelled cheque for the bank transfer.

4. Why Claims Get Rejected (And How to Avoid It)

​Even with the best policy, claims can be denied. Here are the common pitfalls:

Reason for Rejection	How to Avoid It
Non-Disclosure	Always declare pre-existing conditions (like Diabetes/BP) when buying the policy.
Waiting Periods	Don't claim for specific illnesses (like Cataracts) before the 2-4 year waiting period ends.
Exclusions	Check if your policy covers "modern treatments" or cosmetic procedures (usually excluded).
Sub-limits	If your room rent limit is $200/day and you stay in a $400/day room, you will pay the difference for everything.
Lapsed Policy	Always pay your premiums during the "Grace Period" to keep the cover active.

5. Pro-Tips for a Smooth Experience

1. ​Keep Digital Copies: Scan every document before you submit the originals. If the courier gets lost, you need those backups.
2. ​The "24-Hour" Rule: Most policies require a minimum of 24 hours of hospitalization to trigger a claim (unless it’s a "Day Care" procedure like dialysis or cataract surgery).
3. ​Read the 'Fine Print': Understand your Co-payment (the percentage you must pay) and Deductibles (the fixed amount you pay before insurance kicks in).

​Final Thought

​A health insurance claim isn't just about filing papers; it’s about preparation. By knowing your network hospitals and keeping your documents organized, you can focus on what truly matters: getting better.

SMART Financial goals

Solution to retirement tension through retirement pension

 

In an era of rising inflation and increasing life expectancy, securing a financial cushion for your "golden years" is no longer optional in India. A pension plan—or retirement plan—is a dedicated financial tool designed to provide a steady income stream once you stop working.

​How Pension Plans Work

​The journey of a pension plan typically involves two distinct phases:

1. ​Accumulation Phase: During your working years, you contribute a fixed sum regularly. These funds are invested in various assets like equity, government bonds, or debt to build a substantial corpus.

1. ​Vesting (Distribution) Phase: Upon reaching retirement (usually age 60), you receive the benefits. In India, most plans allow you to withdraw a portion as a tax-free lump sum, while the remainder must be used to purchase an annuity, which provides a monthly or yearly pension.

​Key Pension Schemes in India

​The Indian market offers several options tailored to different professional backgrounds:

• ​National Pension System (NPS): A government-backed, market-linked voluntary scheme. It offers flexibility in asset allocation and additional tax benefits under Section 80CCD.

• ​Employee Provident Fund (EPF): Mandatory for most salaried employees, where both the employer and employee contribute. It offers guaranteed, tax-free returns (currently around 8.25%).

• ​Atal Pension Yojana (APY): Targeted at the unorganized sector, providing a guaranteed minimum pension of ₹1,000 to ₹5,000 based on contributions.

• ​Public Provident Fund (PPF): While technically a savings scheme, its 15-year lock-in and tax-free interest make it a favorite for building a conservative retirement base.

​Why Start Early?

​The "power of compounding" is the greatest ally of a retirement saver. Starting in your 20s rather than your 40s can result in a significantly larger corpus with smaller monthly contributions. Additionally, most pension plans offer tax deductions under Section 80C, helping you save money today while securing your tomorrow.

Loan application guide

 Securing a loan—whether for a first home, a new car, or a burgeoning business—is a significant financial milestone. While the prospect of receiving a lump sum of capital is exciting, the application process can often feel like a daunting task of paperwork and scrutiny.

The secret to a stress-free experience lies in preparation and transparency. This guide breaks down the loan application journey into manageable steps, helping you move from "applicant" to "approved."

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1. Know Your Numbers: The Pre-Application Phase

Before you even look at an application form, you need to understand your financial standing from a lender's perspective. Lenders primarily look at your ability to repay the debt.

• Check Your Credit Score: This is the single most important factor. A higher score typically unlocks lower interest rates.¹ If your score is below 670, consider taking a few months to pay down existing debt or correct errors on your credit report before applying.
• Calculate Your Debt-to-Income (DTI) Ratio: Most lenders prefer a DTI ratio of 36% or lower.² To calculate yours, divide your total monthly debt payments by your gross monthly income.³
• Determine Your "Need vs. Want": Be precise about the amount you need. Borrowing more than necessary increases your interest costs and can hurt your chances of approval if the monthly payments stretch your budget too thin.⁴

2. Choose the Right Type of Loan

Not all loans are created equal. Matching your needs to the specific loan product ensures you don't pay more than necessary.

Loan Type	Common Use Case	Key Feature
Personal Loan	Debt consolidation, weddings, repairs	Usually unsecured; fixed rates.
Mortgage	Home buying or refinancing	Long terms (15–30 years); secured by property.
Auto Loan	Vehicle purchase	Secured by the car; shorter terms (3–7 years).
Business Loan	Startup costs, inventory, expansion	Requires a business plan and financial projections.

3. Gather Your Documentation

The most frequent cause of loan delays is missing paperwork. Having a digital folder ready to go will make you look like a low-risk, organized borrower. Typically, you will need:

• Proof of Identity: Government-issued ID (Passport, Driver’s License).⁵
• Proof of Income: The last two years of tax returns
• Financial Statements: Three months of bank statements for all checking and savings accounts.
• Employment Verification: Contact information for your current employer.

4. Shop Around and Get Pre-Qualified

Don't settle for the first offer you see. Even a 0.5% difference in interest rates can save you thousands of rupees over the life of a loan.⁶

Many lenders offer pre-qualification, which uses a "soft" credit pull that doesn't hurt your credit score.This gives you an estimate of the rate and amount you might qualify for. Once you find the best 2-3 options, you can move forward with a formal application, which involves a "hard" credit pull.

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5. The Formal Application Process

When you submit the formal application, the "underwriting" phase begins. This is where a human or an algorithm verifies every claim you’ve made.

Pro Tip: Be 100% honest. Discrepancies between your application and your bank statements are red flags that can lead to an automatic rejection.

During this time, avoid making other big financial moves. Do not open new credit cards, close old accounts, or make large, unexplained deposits into your bank account. These actions can shift your credit score or DTI ratio, potentially voiding an approval at the last minute.

6. Understanding the Offer: The Fine Print

If approved, you will receive a loan estimate or disclosure. Look beyond the monthly payment and focus on:

• APR (Annual Percentage Rate): This includes the interest rate plus any fees (like origination fees).                       It is the true cost of the loan.
• Prepayment Penalties: Check if you will be charged a fee for paying the loan off early.
• Fixed vs. Variable Rates: Ensure you know if your payment could increase in the future.

7. Closing and Funding

Once you sign the final documents, there is often a short "rescission period" (especially for home equity loans) followed by funding.¹⁰ Personal and auto loans are often funded within 24 to 48 hours, while mortgages can take 30 to 45 days to close.

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Final Thoughts

A loan is a tool, not just a debt. By approaching the application process with a clear strategy and organized documentation, you demonstrate to lenders that you are a responsible borrower. This not only increases your chances of approval but also ensures you get the most favorable terms possible.

 

Financial Illness to Wellness with Nutrition

 

A peep into Annuities

 

Gold Investment - Are you missing out?

 

Insurance Essentials - Do check out!

 

AI in Wealth Management

 

Loan approval process - what to expect

 

Understanding Credit Scores

 

Yoga & Financial Planning

Yogic principles can help you avoid the following financial mistakes adding on to wealth

Principle 1

Keep your ego at bay to avoid confirmation bias while picking up investment choices

Principle 2 

Don't be ignorant. Do not stay away from markets because your friends or relatives made losses.

Principle 3

Conduct a thorough analysis and gain knowledge about the fundamental principles before investing.

Try these yogic methods on the video for achieving balanced state of mind in financial planning.

Financial Goals for 2026 which caught my eyes!

These are the new year financial goals which caught my eyes!

Introduction to Financial Literacy

Financial literacy empowers individuals to make informed and effective decisions with their financial resources. It includes understanding how money works in the world how someone earns it, manages it, invests it, and donates it to help others. In an increasingly complex economic environment, being financially literate helps people avoid poor financial decisions, reduce financial stress, and improve their overall quality of life.

Budgeting & Money Management

Creating a budget starts with understanding your sources of income and listing all your fixed and variable expenses. Once these are clearly outlined, you can identify areas to cut unnecessary spending and allocate funds more efficiently. Regularly reviewing and adjusting your budget helps maintain financial balance. Money management also includes paying bills on time, avoiding overdrafts, and setting limits for discretionary spending.

Saving & Emergency Funds

Saving should be treated as a non-negotiable part of your budget. Aim to save at least 10–20% of your income, depending on your financial goals. Emergency funds should ideally cover 3–6 months of essential living expenses. This buffer protects you from falling into debt during tough times and provides peace of mind.

Understanding Credit & Debt

Not all debt is bad. Loans for education, homes, or business investments can be considered “good” if they add value to your future. However, “bad” debt like high-interest credit card debt can quickly spiral out of control. A credit score, which is a numerical representation of your creditworthiness, is affected by how you manage your credit. Keeping debt levels low, paying on time, and not maxing out credit limits helps maintain a good credit score.

Banking & Financial Services

Understanding different types of bank accounts helps you use the right tools for specific purposes. A checking account is ideal for daily transactions, while a savings account is used to earn interest and store money for future needs. Online banking platforms have made it easier to monitor balances, transfer funds, and manage accounts from anywhere. Selecting a reliable financial institution and understanding their fees and services is essential for effective money management.

Investing Basics

The key principle in investing is the relationship between risk and reward the higher the potential return, the higher the risk. Diversification (spreading investments across different asset classes) helps reduce risk. Long-term investing strategies focus on gradual wealth building through compounding returns. Basic knowledge of how different investments work enables better decision-making and helps you align your investments with your goals.

Avoiding Scams & Financial Pitfalls

Being financially literate includes knowing how to identify and avoid scams. Never share sensitive personal or financial information with unverified sources. Learn to recognize signs of fraud, such as offers that sound too good to be true, high-pressure tactics, or requests for payment through unusual methods. Regularly monitoring your financial accounts and credit reports can help catch suspicious activity early.

Conclusion & Action Steps

Financial literacy is not something that happens overnight. It’s a lifelong journey of learning and improving. Start by applying one or two principles consistently like creating a budget or starting an emergency fund. Over time, these habits will strengthen your financial skills and give you the confidence to face more complex decisions like investing or retirement planning. Remember, small steps today lead to big results tomorrow.

Make these financial goals a reality in year 2026!

7 Reasons You Should Hire a Real Estate Agent

 

Why Hire a Real Estate Agent?

Buying or selling a home can be a complex process. From knowledge of the market to negotiation skills, there are many reasons to consider bringing a professional onto your team. Swipe right to discover the top reasons why hiring a real estate agent can make all the difference.

Reason 1:

Market Knowledge

Realtors understand the local market, from pricing trends to neighborhood insights, they have the inside scoop.

Reason 2:

Negotiation Skills

An experienced real estate agent can negotiate the best deal on your behalf, potentially saving you thousands.

Reason 3:

Time Savings

With a Realtor handling property searches, negotiations, and paperwork, you can focus on what matters most to you.

Reason 4:

Access to Listings

Realtors can provide you with access to more listings, some of which may not be widely advertised.

Reason 5:

Paperwork Expertise

Navigating real estate contracts can be complex. A Realtor will ensure you understand everything before signing.

Reason 6:

Ethical Consideration

Realtors are bound by a code of ethics and committed to treating parties fairly in a transaction.

Reason 7:

Price Guidance

Realtors can provide data to help you make an informed decision about the price you're willing to pay or accept.

Ready to Find Your Realtor?

These are just a few reasons to consider hiring a real estate agent. If you're ready to simplify your home buying or selling process, click here to connect with the team today. 

Free Budget Planner

 Today I am sharing a free budget planner to track your expenses and income.

Here is a short video for budget planning. Please share like and subscribe if you liked it.

Map Your Goal with Financial Planning

 

Which financial dilemma are you in?

 

Courtesy - Sri.Sankar

Why do health insurance claims really get rejected?

 

Courtesy - Sri.Sankar

Chart your retirement!

 

Investors List

Raising your Fixed Deposit target between 10 - 25 lakhs?

The below list of prospects write cheque without any hesitations. They do not need you to have a premium car or an Iphone.

Three things to keep in mind

Seek their overall portfolio first. If they have invested in small finance bank earlier, they understand your space.

Get warm introduction

One warm introduction beats 50 cold calls or emails.

Narrow down to 10 to 15 investors. Then focus on the serious ones in your sector.

I have a database of 50 plus investors across the small finance bank who has helped to raise 25 lakhs with ease.

Comment Investors and I will send you the list of 50 investors with a nominal cost of Rs.5,000.    

Have you started achieving your target journey?

Download your free personal finance data sheet !

Today I am sharing with you a link to download the free personal finance data sheet to record your financial details.

Download for free

Term Plans just got more affordable!

 

Beyond Financial Planning

 Life & Financial Planning - What is Financial Life Planning Anyway?

No mention of Financial planning is complete without a reference to Life Planning. Ever really wondered what they are? Well, if you really want to know here is the answer...

• Figuring out what money represents to your client

• Foreseeing life events and transitions, and prepping up for the transitions

• Assisting clients in the process of establishing financial goals that firms up their life goals

Did you know that Financial Life Planning process includes Life transitions, Balance & Meaning in their lives, Strong need of self direction, Active Listening, To engage adults in understanding a product, service or process and their relevancy or direct application to their lives ?

Financial Life Planning is all about transition thinking than transaction thinking.

News Source : Economic Times

Good to start thinking about tax planning early !

 

As I interact with lot of investors, I realize that most of them, predominantly in the salaried class have the habit of procrastinating their investments till end of a financial year, precisely to be March. I am not saying that this is completely a wrong practice, but one should check that, how many times have they ended up making a thoughtless investment decision just to satisfy the tax monster, letting the surplus money sleep peacefully in the savings account by earning nominal bank interest and not spreading the money effectively through various timely investment vehicles?

Planning during this year's upcoming fourth quarter is more of adventure than normal as there may be pressure points shooting up from various levels of the organization to achieve targets, performance appraisals, top management visits and what not ! Despite knowing all these, we still manage to make investments randomly and be an impulsive investor.

A two pronged strategy will make your investment decisions unbiased, eliminate forced buying, better liquidity management, life goal oriented .. Last but not the least, it works as your tax saving tool too.

Financial Planning and Disciplined Investing are associated directly with stability and security. Financial Planning is a process that determines how we can best meet our life (Personal as well as Professional) goals, through the proper management of our financial affairs.  Disciplined investing is all about mind setting to start investing early during the year. It could be lump sum, bits and pieces, monthly depending on the comfort levels of the investor. 

When there are plenty of Financial Advisors, Agents, Relationship Managers presenting you with umpteen investment options, setting a financial goal is the first step to financial freedom which could be short term, medium term and long term respectively.

Short Term goals could be School fees of kids, Purchase of household appliances, Buying tax planning investments like insurance, tax saving funds etc. Foreclosing a loan, Foreign trip, Buying a new vehicle, Saving for buying a property falls into Medium term and thirdly the long term goal which covers building retirement corpus, estate planning, wedding expenses, post retirement living essentially life planning. 

To sum up, Financial Planning is like an endowment plan which ensures life goal protection and a sober investment mechanism. 

A well thought and systematic investment pays a better interest ! 

Hope you enjoyed the article - if you have any thoughts or suggestions feel free to add in the comments section.

Psychology with money - Understand your Psyche

 

In terms of our money matters there are certain factors which affects our psychologies. So if you know these factors we can manage our money more effectively.

So today we are going to talk about 3 psychological factors which affects our money spending. One may be an extreme spender or one may be a balance spender. So balance spending affects our psychology positively.So the first thing we need to analyse is whether we are a spender or a saver. So spender means one who spends all money for his needs first and then thinks about saving. Now for savers they think only about how to save and they do not have any idea of spending the money. So if you could do a small exercise to analyze yourself whether you are a spender or a saver and put your comments in the comment box so that I could understand your pattern.

Now the second factor is full budgeted versus free budgeted psychology.Which is your psychology? Are you fully writing down your expenses and based on that you do the spending. You do not end up spending more than your budgeted expenses. They will also feel uncomfortable if any sudden inflow of money comes above their budgeted expenses and will have unnecessary worries. For free budget they will spend money as long as it gets over and if any shortfall comes they will avail loan and spend money. So the extreme approach for both fully budgeted and free budget is a tricky situation. So our goal should be attain a balance between these two approaches. So identify yourself which category do you belong to.

Now comes the third category of people where safety is of utmost importance to them. They will write down each expenses and ensure that they save according to the budget and turn out to be misers. They may even avoid purchases in the family stating that the expenses are not written down in the budget. The other type is status oriented spenders. They will spend money to ensure that they are matching with the status of living of other people in the society. For example one decided to buy a car and they may be able to buy a budget car without taking any loans. But they look at the people living next door and compare their status and decide to buy a bigger car because they would like to equalize the status with others next door. So when you are purchasing anything whether you consider safety aspect as a decision maker or status as a decision maker. 

Now with the above you may able to understand your psychology with money and act accordingly and manage your money more effectively. If you find this article useful please share,like and follow me for further updates.

Double benefits for your investment plan!

 

How to buy a dream home without home loan

 

How to build a home without home loan

Today we are going to talk about how to build a home without home loan. Many a times people will go and take loans for 11 percent or 12 percent and they fall into a debt trap and face a frustration. The cost of house may be 50 lakhs and the loan availed may 20 or 25 lakhs and they end up facing legal complications.

Going forward the next generation at least can think about buying a home without home loan. Most of the times when we talk to people they say that they will be able to build a house with their salary and will be able to take loan for majority of their income. One always know that at a start of career buying a home is a plan but one can always consider living with family for a certain period of time or may be rent a house for a certain period.First they can save their income for the 5 years to 10 years and then from the returns on this savings they can build a home. So in order to dream buying a home this method will help you to carry forward your dream of building a house. 

For example if you are taking a housing loan of 50 lakhs for 20 years, your approximate EMI will turn out to be Rs.35,000 and with an interest portion and other charges you will end up paying 90 lakhs over 20 years. Now if you consider loan tenure of 10 years, your EMI will be approximately Rs.55000 and you will end up paying 65 lakhs in total. And if you sell your house above Rs.65 lakhs then only you will be selling more than what you have bought for. So as soon as you get the idea of buying a home, you will calculate the EMI you can pay for towards loan. Instead of that why dont you consider investing Rs.25,000 as a SIP. You can think of it in many ways, if you are young you may invest directly into equity based SIP or else invest into an aggressive stocks and them monitor and review it appropriately. If you invest Rs.25,000 into equity SIP for 10 years it will be around Rs.30 lakhs and with 10 % compounding it will grow to Rs.45 lakhs and if you fetch a 12% it will grow to Rs.50 lakhs and if your investment fetches 15% the total fund will grow to 55 lakhs. So once you get the idea of buying a home, understand the portion of EMI you are ready to pay and consider investing it towards SIP and pay your SIP like an EMI. Once you accumulate the funds as above, you can go ahead and buy a new dream home. So if you say that the accumulate amount may not be enough considering inflation etc then you can increase your SIP amount and save accordingly. Or you can consider apportioning your annual hike into your savings. 

Hence if you go by the above method of accumulating savings towards SIP, you will never have to take a home loan for buying your dream home. You can rent a house and plan like this and there is no mistake in doing this. So here is wishing you a way to financial freedom and plan your purchase of dream home through this method.

Happy buying!