facebookI had been paying my HDB housing loan for the past 3 years. If I do Partial Capital Repayment using CPF, does it benefit me from the loan interest rate and also accrued interest on my Cpf.? - Seedly
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Anonymous

02 Jul 2019

I had been paying my HDB housing loan for the past 3 years. If I do Partial Capital Repayment using CPF, does it benefit me from the loan interest rate and also accrued interest on my Cpf.?

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    What are your thoughts?

    Yes I recommend to use more cash to pay for your loan, unless they are generating more than 2.5%. Keep a 3-6 months emergency buffer and you should be fine. Overall, it's all about asset allocation and you want to make sure you are not over allocated or too concentrated on certain asset class.

    Typically the asset classes are stocks, bonds, long term bonds, cash, commodities, home equity. Just make sure that by partial repayment you are not overly allocating your capital on home equity.

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      Eric Chia

      Eric Chia

      02 Jul 2019

      Level 7·Senior Financial Consultant at Prudential

      Just giving a brief answer here. Your interest rate does not change, though the accrued interest on your cpf will reduce.

      Good to do partial repayment if your cash or cpf OA investment is giving less than 2.6%p.a. returns.

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        Assuming you are taking hdb loan @2.6% interest. And you use your OA to pay partly. You will forgo 2...

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