I was having a conversation with one of my friend about the difference between PF withdrawal or taking a Home loan. Actually if you are buying a home or construct a house you can withdraw upto 90% of your PF amount. Now the think is PF gives around 7.8% returns whereas the Home loan would be around 8.3%, so taking out the PF instead of taking a loan is little better option.
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But the thing is PF is that amount which helps you in your retirement. It is a type of debt fund which helps you as your retirement corpus. So touching thar would not be great for a lot of people because a lot of people don't invest but PF helps you to invest unknowingly. And that's why even if you are paying extra EMI it's fine rather than taking out the PF.
But it all depends on person to person. A person who cannot give more EMI can opt for taking out the PF whereas person who have manageable EMI can take the loan and keep the continued. Along with that if someone who has never saved for retirement should not touch the PF at any cost, because when you take the EMI your expenses will go down and in the mean time your PF will continue to rise. And that's why I have mentioned my friend all the scenarios if he wants to take more loan and give more EMI or if he wants to take less loan and take out money from the PF.
I know tak8ng loan is not a good option but people usually take the loan mostly the Home loan for their first home and you cannot deny it. And that's why taking home loan is not a problem for most of the folks if you can manage the EMI.
