Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Opportunity cost is the value of the next-best alternative given up when choosing one financial option over another.
What you give up by choosing one option instead of the next best alternative.
Central to decisions like prepaying a low-interest loan versus investing, or choosing a lower-yield safe asset over a higher-yield risky one; not always purely monetary.
Prepaying a 7% home loan instead of investing in an equity SIP expected to return 12% has an opportunity cost of the foregone difference.
What you give up by choosing one option instead of the next best alternative.
Opportunity Cost helps you evaluate products, compare options, and make informed decisions aligned with goals, tax rules, and risk tolerance in the Indian financial system.