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Will I Regret Borrowing My Home Equity to Pay Off My Home Loan?

Milind

Milind Vadjikar  | Answer  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 26, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Asked by Anonymous - Nov 24, 2024Hindi
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Dear Sir Kindly advise whether partial pf can be withdrawn for repayment of home loan taken from private bank.

Ans: Hello;

If you have been member of EPFO for 10 years or more you can do partial withdrawal from your EPF account towards repayment of loan.

You will require outstanding loan statement from the bank to process your request.

Best wishes;
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |10894 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Mar 20, 2025

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Sir i have two personal loan.Emi 18466 & 10359.Total Outstanding is approx 8lakhs.Rate of interest 23% & 13%.My slalry is 55000 per month.Can i use my PF amount to clear my loan.I have 7 lakh in my pf.
Ans: Monthly Salary: Rs. 55,000
Two Personal Loan EMIs: Rs. 18,466 + Rs. 10,359 = Rs. 28,825
Total Outstanding Loan Amount: Approximately Rs. 8 lakhs
Interest Rates: 23% and 13%
Provident Fund (PF) Balance: Rs. 7 lakhs
Key financial concerns:

High-Interest Burden: The 23% loan is significantly costly.
Major EMI Commitment: A large portion of your income goes into EMIs, limiting savings.
PF Withdrawal Dilemma: Using PF can reduce loan burden, but it also affects long-term security.
Should You Use Your PF to Clear Your Loans?
PF is meant for retirement and grows at a stable interest rate. Withdrawing it early should be a last resort. However, in your case, using a portion of it might be beneficial due to the high loan interest.

Pros of Using PF for Loan Repayment
High-interest loans cost more than PF returns:

Your PF earns around 8% interest, but your loan charges 23% interest.
Clearing the high-interest loan with PF saves more money than keeping PF intact.
Reduced EMI burden:

If you pay off a part of the loan, your monthly EMI will decrease.
This will free up cash flow for better financial stability.
Faster debt-free status:

Clearing debt earlier saves money and reduces financial stress.
Cons of Using PF for Loan Repayment
Less retirement savings:

PF is a long-term safety net. Using it now means losing compounding benefits.
No future PF withdrawals for the same purpose:

Once you withdraw, you cannot easily access PF for another emergency.
Tax implications:

If you withdraw PF before 5 years of service, it becomes taxable.
Best Strategy to Manage Your Loans Without Hurting Retirement Savings
Instead of using the entire Rs. 7 lakhs in PF, a structured repayment approach will help optimize both loan repayment and long-term wealth growth.

1. Pay Off the High-Interest Loan First (Debt Avalanche Method)
Your 23% loan is the biggest financial drain.
Use Rs. 4 to 5 lakhs from PF to fully clear or significantly reduce this loan.
Keep the remaining PF intact for retirement security.
2. Consider a Low-Interest Loan for Refinancing
Check if you qualify for a loan against FD, gold loan, or top-up home loan.
If possible, take a lower-interest loan (8-12%) and use it to close the high-interest loan.
This will reduce your EMI burden without touching too much of PF.
3. Keep Some Emergency Funds
Avoid depleting PF completely. Keep at least Rs. 2 to 3 lakhs in PF for emergency needs.
This ensures you have financial security while handling your loans.
4. Gradual Repayment of 13% Loan
Since 13% is a relatively lower interest rate, you can continue paying its EMI.
If you have additional funds in the future, prepay in small amounts.
5. Reduce Financial Stress with a Better EMI Plan
If loan restructuring is possible, request the bank to extend your loan tenure for lower EMIs.
This will ease monthly financial pressure without compromising long-term wealth building.
How to Move Forward?
Withdraw Rs. 4-5 lakhs from PF and clear the 23% interest loan.
Keep Rs. 2-3 lakhs in PF for retirement security.
Continue paying the 13% loan EMI regularly.
Explore options like a gold loan or FD loan for refinancing if needed.
Avoid new debt and focus on improving cash flow.
Final Insights
Using PF partially is the best approach.
Clearing the 23% loan first will save you the most money.
Keeping some PF balance intact ensures retirement security.
Avoid taking new personal loans, and focus on gradual financial recovery.
Once debt is under control, start investing in mutual funds via MFD with CFP credentials for long-term wealth creation.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment

..Read more

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Nayagam P

Nayagam P P  |10858 Answers  |Ask -

Career Counsellor - Answered on Dec 16, 2025

Asked by Anonymous - Dec 13, 2025Hindi
Career
Hello sir I have literally confused between which university to pick if not good marks in mht cet Like sit Pune or srm college or rvce or Bennett as I am planning to study here bachelors and masters in abroad so is it better to choose a government college which coep and them if I get them my home college which Kolhapur institute of technology what should I choose a good university? If yes than which
Ans: Based on my extensive research of official college websites, NIRF rankings, international recognition metrics, placement data, and masters abroad admission requirements, your choice between COEP Pune, RVCE Bangalore, SRM Chennai, Bennett University Delhi, and Kolhapur Institute of Technology (KIT) fundamentally depends on five critical institutional aspects essential for successful masters admission abroad: global research output and international collaborations, CGPA-based competitiveness (minimum 7.5-8.0 required for top international programs), faculty expertise in emerging technologies, international student exchange partnerships, and proven alumni track records at globally-ranked universities. COEP Pune ranks nationally at NIRF #90 Engineering with India Today #14 Government Category ranking, offering robust infrastructure and 11 academic departments with research centers in AI and renewable energy, though international research collaborations are moderate compared to IITs. RVCE Bangalore demonstrates strong national standing with consistent COMEDK admissions competitiveness, excellent placements averaging Rs.35 LPA with highest at Rs.92 LPA, and established international collaborations through Karnataka PGCET-based MTech programs, providing solid foundations for masters applications. SRM Chennai maintains extensive research partnerships with 100+ companies visiting campus, highest packages reaching Rs.65 LPA, and documented international research linkages through sponsored programs like Newton Bhaba funded projects, significantly strengthening masters abroad candidacy through diverse research exposure. Bennett University Delhi distinctly outperforms others in international institutional alignment, recording highest placements at Rs.137 LPA with average Rs.11.10 LPA, explicit academic collaborations with University of British Columbia Canada, Florida International University USA, University of Nebraska Omaha, University of Essex England, and King's University College Canada—these partnerships directly facilitate seamless masters transitions abroad and represent unparalleled institutional bridges to international graduate programs. KIT Kolhapur records respectable placements at Rs.41 LPA highest with average Rs.6.5 LPA, NAAC A+ accreditation, autonomous institutional status under Shivaji University, and 90%+ placement consistency across technical streams, though international research visibility and foreign university partnerships remain comparatively limited. For international masters admission success, universities globally prioritize bachelors institution reputation, minimum CGPA 7.5-8.0 (Bennett and SRM facilitate this through curriculum rigor), GRE/GATE scores (minimum 90 percentile), English proficiency (TOEFL ≥75 or IELTS ≥6.5), research output documentation, and faculty recommendation quality reflecting institution's research culture—criteria most strongly supported by Bennett's explicit international collaborations, SRM's documented research partnerships, and COEP's autonomous departmental research centers. Bennett simultaneously offers global pathway programs reducing masters abroad costs through articulation agreements and provides curriculum aligned internationally with partner institution standards, representing optimal intermediate bridge structure versus direct masters application. The cost-effectiveness and structured transition support through international partnerships, combined with demonstrated placement success and faculty research visibility, position these institutions distinctly above KIT Kolhapur for masters abroad aspirations. For your specific objective of pursuing masters abroad, prioritize Bennett University Delhi first—its explicit international university partnerships with Canadian, American, and European institutions, highest placement packages (Rs.137 LPA), and structured global pathway programs create seamless masters transitions with reduced costs. Second choice: SRM Chennai, offering extensive research collaborations, documented international linkages, and competitive placements (Rs.65 LPA highest) strengthening masters applications. Third: COEP Pune, delivering strong national standing and autonomous research infrastructure. Avoid RVCE and KIT due to limited international visibility and explicit foreign university partnerships compared to the above three institutions. All the BEST for a Prosperous Future!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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