KUALA LUMPUR: It is much easier for members of the public to withdraw their savings directly from the Employee Provident Fund (EPF) rather than using it as a support facility to apply for a bank loan.
As reported by Utusan Malaysia, Former Deputy Finance Minister II, Datuk Seri Johari Abdul Ghani said, this is in view that borrowers will be burdened with interest payments that will be charged on the loan.
Johari said, the scheme will also take time for the bank to process the credit review and the preparation of the legal agreement.
“If you borrow RM70, 000, let say the interest payment is five per cent per year that is RM3, 500. For 10 years the interest will be RM35, 000.
“That means you take a loan of RM70, 000 and the interest for 10 years is RM35, 000. The actual amount that you receive from the loan is RM35, 000.
“If that is the only amount, it is better to use directly the EPF money of RM35, 000 and need not have to pay the interest,” he said in a statement, Sunday.
Meanwhile, on 9th March 2023, the Unity Government has introduced a method that enables EPF contributor to use their contribution money at the agency as collateral to the bank for the financial financing.
However on Monday, EPF has announced contributors’ aged between 40 till 54 years are eligible to apply for bank loan via Support Facility Account 2 (FSA2) starting 7th April 2023. –Malaysia World News