The Hidden Cost of Credit for Business Owners
Introduction: For Business Owners, Every Credit Counts
As a business owner, leveraging credit is often a key driver for accelerating growth. A strong credit line can provide multiple benefits—it ensures smooth cash flow for daily operations, enables strategic planning for expansion, and keeps you prepared to seize opportunities as they arise. However, while long-term credit can offer significant advantages, it comes with a hidden cost: the staggering amount of interest paid over time.
Did you know that the total interest on a loan can often exceed 1.5 times the principal amount?
An interest rate of just 0.75% per month might not seem like much at first glance, but over the long term, it can lead to substantial financial outflows. This impact is particularly noticeable when working on thin margins, where every rupee counts.
But what if we could reclaim that interest and turn it into an opportunity for wealth creation? With the Delego EMI Saver Strategy, business owners can transform their long-term loan repayments into a smart, strategic tool for building wealth.
Let’s explore this further with an example of a loan taken against a residential property:
The Cost of Long-Term Loans: A Home Loan Example
Let’s break down how much we actually pay when we take a long-term loan:
- Loan Amount: ₹50,00,000
- Tenure: 25 years
- Interest Rate: 9%
- Monthly EMI: ₹41,960
By the end of 25 years, here’s the total cost of the loan:
- Total Payment: ₹1,25,87,945
- Principal Paid: ₹50,00,000
- Interest Paid: ₹75,87,945
Yes, you read that right! You’ll end up paying ₹75.87 lakh in interest—more than 1.5 times the principal amount.
As business owners, we are always looking to optimize costs and maximize returns. But with loans like these, a huge chunk of our hard-earned money is slipping away in interest payments. What if we could reclaim this interest and use it to build a substantial corpus?
Solution: The Delego EMI Saver Strategy – Reclaim and Build Wealth
Alongside paying our EMIs, we have to invest just 10% of our EMI amount to offset our loan costs. Lets see how:
- Monthly EMI: ₹41,960
- Monthly SIP Investment: ₹4,200
- Expected Annual Return*: 15%
- Tenure: 25 years
Here’s how the numbers stack up:
- Total Investment Over 25 Years: ₹12,60,000
- Total Wealth Accumulated: ₹1,37,93,110
- Net Profit (Interest Reclaimed): ₹1,25,33,110
By the time we pay off our home loan, not only will we have released our property, but we’ll also get back our total amount paid for the property.
Why This Matters for Business Owners
- Turn Loan Repayments into Wealth: As a business owner, every rupee matters. This strategy transforms your loan repayment process into a powerful wealth-building exercise, ensuring your money works as hard as you do.
- Reduce the Cost of Credit: Offset the long-term financial burden of hefty interest payments by reclaiming a portion of what you pay in interest. This reduces the hidden costs of credit and improves your financial efficiency.
- Enhance Return Margins: By Strategically re-investing the funds saved through this approach, you can boost your long-term return ratios and improve the profitability of your business.
- Strengthen Financial Resilience: With the EMI Saver Strategy, taking credit becomes stress-free. You’ll manage debt for effectively, preventing it from creating a significant dent in your balance sheet, and ensuring your business remains financially robust.
Conclusion: Make Credit Work for You
As business owners, we already understand how to leverage credit to fuel growth. Now, take it a step further. With Delego’s EMI Saver Strategy, transform your long-term loan repayments into an opportunity to build wealth. Pay your EMIs with confidence and watch as your money starts working for you, reclaiming interest and securing a prosperous future for you and your business family.
Delego Capital – Your Money, Our Responsibility.
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