How EPF Can Reduce Your Home Loan Principal or Monthly Installment Part 2

Hello Grasshoppa,

In my recent post, I have shared How Can EPF Reduce Your Home Loan Principal or Monthly Installment Part 1. In today’s post, I will be sharing more updates of my personal experience on the process & how soon I actually got my EPF withdrawals.

Just a quick recap, I went to the EPF office to ask about the procedure. I was given a form as above for my housing loan bank to fill up with the necessary details. After I was done with the EPF office, my housing loan banker has advised me to go directly to the branch where I applied for my loan to get the form filled. EPF office also informed me that I can only apply, once my first instalment is made.

Fast forward after I paid my first instalment, I went to the Maybank branch in town which is quite far away from my office to request for them to fill up the above form. Upon checking my address, the staff actually asked me why did I travel so far? LOL. After further clarification with them, we can actually go to ANY BRANCH to apply for this. All you have to do is fill-up the form with an option to collect the letter from that branch or get it delivered to your house. I opted for it to be delivered to my house as my house is very far from the branch. The bank staff mentioned that I will receive it within 7 working days. Guess how soon  I got my letter? I got mine within 4 days. Monday I applied for it & I got the letter via GDEX on Friday.

I went to the  EPF office the following Tuesday to submit my application along with the statement from the bank. At the counter, they asked whether I want to deduct my loan principal or monthly instalment. I personally chose to deduct my monthly instalment. They requested for my IC & account number that I want my EPF money to be transferred to (It may not be the same bank that you apply your housing loan for monthly instalment deduction). The EPF staff mentioned that I will be receiving my money within 14 working days. How long did it take for me to receive the money?

TWO working days. I applied on Tuesday & when I checked on Thursday, the money was already in. Isn’t that crazily efficient? In total, I took less than 2 weeks to successfully apply for my EPF withdrawal. Since this is my first-time application, EPF recommends for us to do it manually to ensure better accuracy in the application. To renew the housing withdrawal, I can do it via EPF app or via their website.

Why Did I Opt For Monthly Withdrawal Instead Of Paying My Loan Principal?

I have a 10 year plan to ensure I fully pay off my housing loan. In order for me to do so, my strategy is to set aside RM2000 monthly to pay for my housing loan & other expenses. I will also allocate 50% of my extra income earned from my year end bonus. The accumulation amount will be used to pay directly to my house principal at the end of the year. Based on my calculation, it is definitely possible to pay it off within 10 years provided if I don’t buy an extra property or any other commitment. It is important for me to stay focus on this but who knows what will happen in the future. I may be buying a bigger house to fit my family.

Anyway, I hope you guys find this update useful & hopefully you guys are able to capitalize on your EPF withdrawals to reduce your housing loan.

OSS!