Whether it is better to use EPF saving to settle the remaining balance and enjoy 20% off... It depends on your balance amount and current monthly repayment amount.

I make an Excel table for the calculation and it shows I get to save a little more by settling the loan now (using EPF).

Points to consider for the calculation. Some pro some cons...

1. EPF does not guarantee 4% or 6% or 8% return. 2.5% is possible. You have no control.
2. Settling PTPTN loan clears it off your CCRIS. Good if you're planning to buy bigger house.
3. EPF's dividend is calculated based on daily-rest.
4. Flexibility in cash flow is good.
5. Discipline is very important (as in everything about money).

If you have the discipline to still contribute the monthly repayment amount into a good investment (stocks, mutual funds, etc) after settling the PTPTN loan; then you should be fine.

If you use the additional cash flow for shopping (zero-interest 24-month installment plan for iPhone) after settling the PTPTN loan; then you are screwed.

All in all, if you have no idea what I'm talking about... Just keep your EPF money where it is now and pay PTPTN every month.

This post has been edited by Ethan: Nov 30 2018, 09:23 AM

A friend of mine went to apply for full settlement using her money in EPF Account 2.
Submission and all went smooth until... an SMS from KWSP saying withdrawal has been rejected.
Reason given is the transcript & degree scroll provided do not tally with the course mentioned in the loan offer letter.

She was from MMU. She took the foundation study which is a 1-year program prior to the 3-year management degree program. Apparently KWSP treat this "completion of foundation study and continue with degree program" as a "course change"... and rejected the withdrawal.

If you are in similar situation, you will need letters from PTPTN and the institution (in her case, MMU)... saying you have changed course, or explain the situation to KWSP.

Good luck.

There ARE benefits using the EPF money to settle the loan now.

First off, you get to clear one item off your CCRIS.
Then, you get to enjoy a 20% off your debt.
And... 10 20 years down the road, nobody knows for sure about EPF's dividend payout.

There are investment which gives return better than EPF.

So, it's up to one's situation and financial planning.

Yes, apparently there are a few students (including my friend) have called MMU and asking for letter regarding this matter. That's why I am telling you about it.

My friend's application has been approved yesterday. :-)
Got the notification sms when we were having lunch together yesterday.

Actually, it took MMU (Exam & Records Unit, Melaka) 4 biz days to retrieve the record of entrance and continuation to degree program. She called them everyday to follow up... hehe.

The letter from MMU was in an email. When submitting, KWSP requested for "certified true copy"... WHAT?!?!
But they back off and accepted the printed letter after showing them the email from MMU.

It's another 4 days before KWSP replied to confirm the withdrawal.

Now it's all done.

Good for you.

My friend's application was rejected (due to the "change course" issue") after the biometric verification.
She is so glad it's all settled now.

PTPTN staff told her the monthly salary deduction would still go on for this month for one last time. And then the excess amount paid would be returned... No idea how soon though.