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When Does Borrowing Make More Sense Than Redeeming Investments?
Maintain financial discipline while solving temporary liquidity needs.
To assess whether borrowing is financially sensible, investors should compare the effective loan cost with the combined benefit of portfolio growth and tax savings. If total borrowing costs are around 11% including processing charges, while the portfolio is expected to generate 12% returns and redemption would trigger roughly 3% in tax impact, the net outcome may still favor borrowing. Apply Now