Redeeming Investments or Taking a Loan: What's Better for You?

Loan apps and credit schemes have made borrowing easier than ever. But when you need to finance a goal or purchase, is taking a loan the right move? Or should you redeem investments you've already made? The answer depends on your situation, your goals, and the trade-offs involved. Here's a smarter way to make that decision.

1500 Cr.
AUM

20,000+
Clients

1900+
Google Reviews

350+ Media Mentions

How an Investing Expert Can Help You Choose Wisely

Clarity on Financial Goals

An expert can help you separate urgent purchases from long-term goals and ensure your funding decision aligns with your overall plan.

DTI Ratio Guidance

Keeping your Debt-to-Income (DTI) ratio below 20% is key. An expert will show you how loans or redemptions impact your ratio and monthly flexibility.

Protecting Long-Term Wealth

A financial advisor can guide you to avoid breaking long-term investments for short-term needs, helping you stay on track.

Radhika Gupta

MD & CEO

FinEdge's commitment to delivering elite service and their focus on putting clients first, distinguishes them in the industry. By consistently prioritizing their clients and providing investment platforms that cater to individual financial goals, FinEdge empowers people to achieve their aspirations.

When Should You Redeem Investments?

For goals that you've planned and invested for (like a wedding or higher education) and the target date is near

When your DTI ratio is already high and another loan would stretch your finances

To make a down payment for a home or car, if that investment was earmarked for the goal

If you’ve already reached 80–90% of your goal amount and need a small top-up

When loan interest costs would outweigh potential investment returns

What Our Clients Say

1800+ Google Reviews. A 4.7 Star Rating. Zero Sales Targets.

“Happy with the service provided and with all the financial advisors. ”

Rajesh Lekhak

What Our Clients Say

1800+ Google Reviews. A 4.7 Star Rating. Zero Sales Targets.

“I am associated with FinEdge from 2013. I am happy and satisfied with their services. My Investment Manager, Ms. Rishika Srivastava is really patient with me and explains to me all the processes very clearly as I am not at all tech-savy. She has an in-depth understanding of my portfolio, mutual funds and investment goals. My transactions have been handled very smoothly by her without any hassles. Therefore, I have no hesitations in refering her services to anyone. I wish her all the best for all of her future endeavours.”

Chandra Narayanan

What Our Clients Say

1800+ Google Reviews. A 4.7 Star Rating. Zero Sales Targets.

“I have been with Finedge from the last 8 years which has been a great experience. The advisors devote a lot of time and plan your financial journey well. Ms. Archana Lamba has assisted me in understanding the various issues and aims in achieving the goals with regular discussions and planning. She has guided me in most beneficial way for a better financial future. Thanks to Ms. archana and Finedge. ”

Naman Garg

When Is It Better to Take a Loan?

Taking a loan can be the right financial decision in specific scenarios — especially when the investment corpus is earmarked for future goals. Here's when a loan makes more sense than a redemption:

Essential, Time-Bound Needs

For education, medical emergencies, or immediate home purchases where delays are not feasible.

Low DTI with Stable Cash Flow

When your Debt-to-Income ratio is under 20% and monthly EMIs won’t strain your lifestyle.

Preserving Long-Term Investments

If your investments are aligned to goals like retirement or child education, it's better not to redeem them.

Mr. Pratheesh's Dreams into Action

At FinEdge it was always reinforced that these investments are linked to my goals and meant to be utilised a few years down the line

~ Pratheesh Gangadhar

Smart Financing: Redeem, Borrow, or Do Both?

Sometimes, the best approach is a hybrid one:

Redeem a part of your goal-specific investments to manage a portion of the cost
Take a short-term or low-cost loan for the balance, ensuring DTI remains reasonable
Avoid touching long-term investments like retirement or child education funds unless absolutely necessary
Always compare effective loan interest vs expected returns before choosing
Use expert guidance to assess both the cost and emotional impact of your funding choice

Why Choose FinEdge

FinEdge’s goal-based investing platform, Dreams into Action (DiA) blends cutting-edge tech and human expertise to provide unbiased investment guidance.

No Sales Targets
No Product Pushing
No Cross Selling/Upselling

People Purpose Product Personalization Process

FAQs

Is it okay to take a loan instead of redeeming investments?

Yes, if the loan is for an essential need, comes with tax benefits, and your DTI is manageable, loans can be a smarter move than disturbing long-term investments.

. What is a good DTI ratio to maintain?

Aim to keep your Debt-to-Income ratio under 20%. For big-ticket goals like home purchases, it can temporarily go to 30–35%, but should be brought down over time.

When should I redeem my investments?

Only when the investment is goal-specific and the goal is near. Avoid redeeming long-term investments for short-term lifestyle needs.

Are all loans bad?

No. Loans like education loans and home loans can be good for your long-term financial health if managed well. It’s high-cost, unplanned loans (credit cards, personal loans) that can hurt.

What should I do if I’ve taken multiple loans?

Prioritize repayment of high-cost loans like credit cards and personal loans. Create a clear plan to reduce EMI burden over time.