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> Housing Loan, Housing Loan

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TSrinapua
post Apr 23 2019, 04:09 PM, updated 4w ago

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Housing loan with bank - period 30-35 years.

If got money in epf account 2, is it better we withdraw it to pay for housing loan so that our loan with bank can settle more early?

Or keep the money in epf to earn interest everyear?


Zot
post Apr 23 2019, 04:22 PM

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I think depends on what is your priority. Put aside which one will max your earning. You have different targets:

1) Keep in EPF and hope the EPF keep performing and at the end you gain more interest. However, you cannot shorten your loan
2) Withdraw and pay a lump sum after accumulate certain amount thus shortened your loan period. However, you need to keep up with same monthly payment.
3) Withdraw and pay a lump sum after accumulate certain amount but maintain loan period thus lowering monthly payment. This will easy your money constrain should inflation rises faster than your income biggrin.gif

Third may sounds good for having more cash on hand, but people tend to spend on unnecessary thing if not having containt as in First and second option.

Between 1 and 2, I think 1st one is better because your saving increase exponentially, not linearly.
propertybuddy
post Apr 23 2019, 07:31 PM

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QUOTE(rinapua @ Apr 23 2019, 04:09 PM)
Housing loan with bank -  period 30-35 years.

If got money in epf account 2, is it better we withdraw it to pay for housing loan so that our loan with bank can settle more early?

Or keep the money in epf to earn interest everyear?
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It depends what's your financial plan and investment goal

Eg
If you loan 500k, 4.5%
Your epf 500k, 6%
Why not keep in Epf and pay your installment

It can be other scenario.. Really depends on your goal
ManutdGiggs
post Apr 23 2019, 07:40 PM

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Is the prop for own use or rental play???

Let's look at rental play. Lower or zero interest meaning higher or max taxable rental income. I'm fine with tat. Not sure bout u.

For own use then u hav to figure out which is best for suggestion above.
eric.tangps
post Apr 23 2019, 08:08 PM

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Can also withdraw from EPF for monthly loan payment. Withdraw from EPF for monthly loan payment and you continue with your monthly loan payment, effectively you will be doubling your instalment monthly and reducing your loan tenure by more than half.
Mijac
post Apr 23 2019, 08:19 PM

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Options are stated above.
Use them wisely to suit your need & financial situation.
TSrinapua
post Apr 24 2019, 10:58 AM

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thank you everyone for advise.

I think I should check back what are the interest bank charge me for the loan first ....
if bank charge me lower interest company with what EPF give out every year...then I will just forget about pay by EPF.


How about if I use my extra money (saving) to pay for loan?


This post has been edited by rinapua: Apr 24 2019, 11:00 AM



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