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Message: <blockquote data-quote="Hyaenidae" data-source="post: 31358592" data-attributes="member: 530392"><h3>The Real Comparison: After 5 Years</h3>Imagine two versions of you. Both have 10 lakhs today and both earn the same salary.<table style='width: 100%'><tr><td></td><td>You (Loan + FD)</td><td>You (Cash + Saving)</td></tr><tr><td>What you do today</td><td>Keep 10L in bank. Take 9L loan.</td><td>Pay 9L cash. Keep 1L in bank.</td></tr><tr><td>Monthly Action</td><td>Pay LKR 20,941 to the bank.</td><td>Put LKR 20,941 in your own FD.</td></tr><tr><td>Interest Earned</td><td>LKR 500,000 (on the 10L)</td><td>LKR 415,000 (50k on the 1L + 365k on savings*)</td></tr><tr><td>Interest Paid</td><td>LKR 356,485 (to the bank)</td><td>LKR 0</td></tr><tr><td>Total Cash in Hand</td><td>LKR 1,500,000</td><td>LKR 1,771,000</td></tr></table>*Calculated by putting the LKR 20,941 monthly installment into a 10% savings plan instead of giving it to the bank.You are mathematically correct that there is a small "surplus" in your specific calculation (500,000 - 356,485 = 143,515).But you are comparing "Loan" vs "Doing nothing with your monthly salary." If you compare "Loan" vs "Paying cash and saving the monthly installments," paying cash makes you LKR 271,000 richer at the end of 5 years.Essentially: Why pay a bank 14% for the "feeling" of having 10 lakhs in your account, when you can own the bike for free and build a bigger bank balance yourself?</blockquote>

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