How about refinance the house? use the extra cash from the refinancing to clear the personal loan, as the rate is 11%. How many years your friend has been paying the hse loan so far? and what is the market value of the house?

While hse loan is at 4.4% (is much more lower than the personal loan)...
btw, how old is your friend? if he still young, can consider refinance.

the number of years you can borrow is up to 35 years or if your friend reach 70 yr old, whichever reach first. (correct me if i'm wrong).

personally, i will not go for the epf withdrawal as it still gives about 6% (assuming that your friend still working, and contributing to epf... the total will gradually grow).
i think in this case, refinance the house is a better option.

while, can use the epf for investment, that will be your retirement (Unless your friend has a better achievement in terms of ROI that is more than the epf 6% annually, else you can consider that.

While your friend get to clear the personal loan, he also can use the epf to invest. however, please be caution, that investment comes with risk. so it depends on your friend risk appetite, and the discipline for it.
if you go for high risk investment via epf, you may get high return, but you also may risk high losses. basically just do your due diligence.

How about borrow money from relatives/friends?

The amount is about 15k.
If he can save about 3k per month, it will be about 5 months. If he can borrow from money from his parents/relatives/siblings/friends.
If he can save about 2k per month, it will be about 7.5 months.

Eg, borrow 15k from them, then if want to give them interest to persuade them to part the money, maybe can offer 5% .. this will be about RM750. and said pay them by installment. The %, he can always discuss with them. at least better than personal loan at 11%.


I'm do not know if withdraw from hse loan acc after direct debit is possible, maybe the experts here can let us know, if this is possible.

but TS mentioned his friend personal loan has a 11% interest rate. If he do a balance transfer /cash on call via credit card, it will be about 4-9% and also got processing/admin fee if not mistaken.

9% and 11% not much difference.

i agreed that 15k is not a big limit. However, depends also on his friend's salary/income. If his friend able to save 2k to 3k per mth, he just need about 5-7.5 mths to clear.

If he can borrow from his relatives/friends/parents, by offering 3-5% for them, and at the same time nego to pay back in installment... this way not just can help his friend reduce/clear in few mths time, but also able to keep his epf intact. This is because his friend do not know about investment, and finds it complicated. Therefore, in this case, is better to keep the money in epf.

15k to some ppl is no big deal, but to some ppl it maybe a big deal... so it depends on various factors that TS's friend only knows.

If this is the case, there is nothing much your friend can do, except continue to pay the installment.
Just like what j.passing.by mentioned, i don't suggest using epf (even if this method is possible).

If he can't cope with the installment, then maybe he can approach AKPK to get advice.