PF Withdrawal for Home Purchase, Is It a Wise Decision?

House is a necessity and to Indian people, it defines the social status and also is a kind of psychological and emotional thing.  PF withdrawal for Home Purchase is a common thing to see in the Indian working community. But is it a wise decision to go with? Let us check in this article.

Why You Need PF Withdrawal?

PF Withdrawal for Home Purchase

If you are thinking about buying a home and are an employee, then you might think of buying a home on a home loan. Home loans are now easily available for those who have a decent amount of salary in some reputed organization. But the home buying becomes difficult for working people for the reason that they need to pay 20% of the property price as a downpayment. And for arranging this 20 % amount, people need to work for years. But still, because of rising in property prices, the downpayment amount sometimes gets hiked at an equal proportionate.

Soon, people come to the conclusion that saving money over the years is not the perfect solution for the downpayment. And try to find out other ways from where they can arrange money for a downpayment for a home purchase. People go for Gold Loans, Loans against other belongings like insurance, etc., and also PF withdrawal.  As other loans need to pay EMI’s and get a feeling of buried under debts, PF withdrawal is the only thing that feels risk-free and easy to opt for. So, people go with PF withdrawers for a downpayment of their dream home purchase.

PF Withdrawal, Is It a Wise Decision?

PF Withdrawal for Home Purchase

If we think deeply, the Provident fund is the scheme that is specifically designed to provide you financial security after retirement. Provident fund money can be a source of income when you are left with no income sources,  even to sustain your daily expenses.

The working days are the golden opportunity for you to save money so that you can have sustainable life after retirement. Planning a house with PF money withdrawal is not a wise decision, as PF can make you rich while retirement if you are constantly saving money in PF without any withdrawal. The principal amount that you are saving plus the cumulative compound interest that you are going to get over a period of time can make you rich at the time of retirement.

How To Get a Finance For Downpayment Then?

It is a wise saying that you should buy a home at an early age of your life. But it is also wise to save your PF money for retirement.

There are several ways you can try with

  1. Spend Money Wisely and concentrate on saving money up to 1/3 rd of your salary.
  2. Set some monthly and yearly goals to achieve the final downpayment amount for which you are looking forwards.
  3. Chose the home that is in your budget
  4. Switch to the Job where you can get higher pay
  5. Opt for Gold Loans
  6. Opt for soft loans, if available from your offices or relatives

If you have a less salary then you can opt-in for small living spaces and once you are capable of buying bigger homes, sell the present one and buy the new one. Buying a bigger home at an early age and going under an unnecessary financial burden is not a wise idea.

Disclaimer: The views of this expressed above are for informational purposes only based on the industry reports & related news stories. does not guarantee the accuracy of this article, completeness, or reliability of the information & shall not be held responsible for any action taken based on the published information.
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