Will you make your child a debtor or a millionaire? The complete details of SIP and education loans will clear all the confusion.

In today's time, the cost of higher education for children is reaching crores. This is the reason that the biggest challenge in front of parents is how to meet the cost of their child's education? In such a situation, only two ways are visible, sensible SIP and compulsion education loan. So let us understand which option can be chosen to meet the cost of a child's education.

It is the dream of every parent that their child should study well and make a big name in life. But in today's rising inflation etc., the cost of studying in IIM, IIT or abroad is skyrocketing, which is now reaching crores, not in lakhs. In such a situation, parents have two ways to meet this expense: first, sensible SIP (Systematic Investment Plan) and second, compulsion education loan.

Many times it happens that parents are in a dilemma that which path to choose between SIP and education loan. That is because one wrong decision of yours can put a heavy burden of debt on your child's future. So come, let's analyze this biggest confusion today and know what can be right for you.

SIP is considered to be the digital piggy bank of your time, in which you put a small amount (eg ₹ 5000) every month and this money is invested in mutual funds related to the stock market. The amount invested in it turns into a big fund over time through the 'magic of compounding'. Let's assume that if you start a SIP of just ₹ 5000 every month with the birth of your child, then after 18 years you can have a fund of about ₹ 35 lakh at an average return of 12%.

When the time for your child's education comes near and you do not have sufficient funds, then education loan seems to be the only option. In this, you will get money immediately but it will trap you in the debt trap. In such a situation, imagine, your child completed his studies by taking a loan of lakhs and as soon as his first salary comes, a large part of it will go in paying the loan EMI. So in such a situation, this financial burden will fall on you at the beginning of the career itself.

If you are also a parent and want that there is no tension of money in the future for your child's education, then SIP is a smart option. You can start it from the birth of the child and then gradually a big fund can be prepared with the help of which there is no need of education loan in the future. Whereas if you take an education loan, then there will be the burden of debt and there will also be tension of EMI, this loan increases the mental and financial burden of the child at the beginning of his career itself. So try to invest in SIP for the future of the child.

You should start a good SIP in your child's name as soon as he is born. Yes, the sooner you start it, the bigger the fund you will be able to create by investing less money. This will save your child from the burden of debt and he can get the gift of financial freedom. This can be your most valuable investment for your child's future.