I have a home loan pending 11 lacs in 6 yrs and car loan pending 3 lacs, my current saving is 0 and total monthly emi around 35000. Should I draw around 6-7 lacs from epf account and do downpayment ?
Ans: Given your situation, it's understandable to seek ways to manage your loans effectively. Drawing from your EPF account can seem like a tempting option to make a substantial down payment. However, it's crucial to assess the long-term implications before making a decision.
Taking a significant chunk from your EPF can impact your retirement savings. It's like borrowing from your future self. While it may alleviate immediate financial strain, it could compromise your financial security later on.
Consider the interest rates of your home and car loans. If the interest on these loans is higher than what your EPF is earning, it might make sense to prioritize paying off those loans gradually rather than depleting your EPF savings.
Moreover, exhausting your EPF prematurely means missing out on potential compounding growth. This growth could significantly augment your retirement corpus over time.
Exploring alternative strategies to manage your loans, like restructuring your EMIs or increasing your income, could be more sustainable approaches. It might require some adjustments, but it's crucial to protect your long-term financial well-being.
Remember, financial decisions should align with your overall goals and priorities. While it's essential to address immediate concerns, it's equally vital to safeguard your future financial stability.
I encourage you to consult with a Certified Financial Planner to devise a comprehensive financial plan tailored to your needs and aspirations.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
