What this calculation tells you
A fair comparison needs the same starting resources and monthly budget in both scenarios. The cash route buys the asset outright and invests the monthly payment it does not owe. The loan route invests the cash it retained and uses the same monthly budget to repay the loan.
The asset is the same in both routes, so its future value cancels from the difference. The output compares terminal investment funds under a constant assumed return. It is not a borrowing recommendation: investment risk, emergency liquidity, taxes and fees can outweigh a modelled difference.
The method, explained
Cash route: pay cash now; invest an EMI-sized amount at every month-end Loan route: pay down payment; invest retained cash at the start; pay the EMI Difference = loan-route terminal funds − cash-route terminal funds
The inputs use the units printed beside each field. Values shown in result cards are rounded for readability; the calculator keeps more precision while applying the formula.
A worked example
Purchase price: ₹10,00,000.00 · Loan-route down payment: ₹2,00,000.00 · Loan annual interest rate: 9 % · Loan period: 5 years · Assumed annual investment return: 8 %.
Difference: loan-route funds minus cash-route funds: ₹−35,906.31
This example uses the inputs above. Your result changes when you change them.
Assumptions & limitations
- Both routes start with the purchase price available and have the same monthly cash budget.
- Loan rate is fixed; investment return is an assumed effective annual rate.
- No tax, processing fee, capital-gains treatment or early repayment is included.
Questions about this tool
Why does the cash route include monthly investing?
Otherwise the two scenarios use different monthly cash flows. Investing the avoided EMI creates a like-for-like comparison.
Does a positive difference mean I should borrow?
No. It only reports the arithmetic under the inputs. Returns are uncertain and the model omits personal circumstances and costs.
Context checked 30 September 2026. External sources do not endorse this tool.
Published by Sanu Tech Innovation LLP · Model notes updated 30 September 2026. Read our calculation standards or report a reproducible issue.