Is It Good to Withdraw PF for a Home Loan?
To support your dream of owning a home, withdrawing PF is a possibility. But should you? Is it good to withdraw PF for home loan? Maybe or maybe not. I’ll tell you about the benefits and consequences of both.
The Employees’ Provident Fund Organisation (EPFO) allows partial PF withdrawal to buy or construct a house, repay home loan or renovate your home. But you will only be able to do that if you have completed 3 years of continuous service. If you meet this requirement you can withdraw up to 90% of your total PF balance.
So, if you are a first time home buyer and want to make a down payment or reduce your home loan EMIs, this is a smart option.
However, you might compromise on your retirement corpus and might stop earning PF interest on the withdrawn amount. Hence, a walk towards financial strain in your post-retirement years.
I would say that if your situation demands urgent financial support then PF withdrawal for a home loan would be a practical choice. But putting your future in jeopardy knowing that you will be able to manage your finances, would be a risk not worth it IMO.