Here my case. in 2014, I refinanced my house (1st time) and I took some money from account 2 for the same house.

after paying for 6 years, 5% ish interest and 35 year loan, I still have a balance of RM180,000. Non flexi loan

I wish to use my EPF (42K) and personal savings (8K) to make the loan to 130,000 and cut short the loan term to about 8-10 years.

as I understand from EPF, they can only make payment to the 1st loan. However due to the fact that 1st loan in non flexi, all additional payment is paid to the monthly installment instead. Or for refinance purpose the calculation is different?

1) 42K EPF and 8K personal is used to reduce the loan to 130K and refinanced it to new bank

2) EPF cant be used, only pay thru personal savings and refinance to new bank with better interest rate and flexi (pay when I have more savings in future)

What is the best option here?