The full form of EMI is equated monthly installment and the full form of SIP is systematic investment plan. EMI is a fixed amount that you pay to your lender for repaying a loan, SIP is an investment plan you pay every week, fortnight, or month.

EMI helps you to fulfill sudden requirements if you need to buy a laptop or phone urgently. You just can take a loan and buy it; waiting for it so long doesn’t make sense. Because in SIP you have to save every month and at least you have to save from 3 years, which can be very long.

Now, if you want to take a loan to buy your new house or car or if you want to save for your retirement SIP is the best option for that. You don’t want to take a loan for your first home or car. So it is better to start a SIP now for your dreams.

Points to remember

• Debt– If you take a loan you have to repay the loan amount and also the interest so it is kind of a financial and mental burden. In a loan, you have to pay your EMI amount on a fixed date on month if you miss one that can affect your CIBIL which is not good.

In the matter of SIP it is good debt as you have to pay you sip am0unt monthly on time but here you don’t have to pay the interest you will get interested. Now it’s your decision which one you would like to prefer.

• The burden of Money– As we said you have to pay the higher amount in EMI so there is no coming back if you took a loan. You have to repay that with interest. The longer loan tenure makes the interest rate higher.

In other hands, if you higher the SIP amount your interest rate will be high and if you also made it for long tenure your interest amount will be very attractive.

• Do not give anyone the control of your life– If you are paying an EMI or planning to take a loan you should know one thing you have to pay the EMI on the fixed time of every month and you just can’t quite it. So if you are planning to quit your job for starting a new business you just can’t do that for that debt burden on your head.

In SIP you just can do everything whenever you want. If you have a SIP it will help you to start your new business which is amazing!

So there are options available in hand now you have to choose which one you like! Both have advantages and disadvantages! SIP is suitable for long term goals and an EMI is perfect for problems of nowadays.