In daily life, you can often hear others say that it is better to use provident fund loans and that there are so many benefits. So, what are the benefits? Let’s take a look with the editor.

What are the advantages of provident fund loans?

1 Provident fund loan interest rates are lower than commercial loan interest rates

When it comes to provident fund loans, the most direct advantage is that their provident fund loans Loan interest rates are lower than commercial loan rates. Currently, the benchmark interest rate for provident fund loans is 2.75 for less than five years and 3.1 for more than five years; the benchmark interest rate for commercial loans is 4.90 for more than five years. If employees use provident fund loans when buying a house, they can save a lot of house purchase costs.

2 The loan term is long and the monthly repayment amount is small

Commercial loans often have certain restrictions on the loan term. Generally, the loan term can only be extended to 30 years if the loan term is higher, and most of them Older second-hand houses can only be loaned for 10 years, which puts greater pressure on monthly payments. In contrast, provident fund loans have smaller age restrictions on houses.

3 The down payment ratio of provident fund loans is low

Generally, the down payment ratio of provident fund loans is lower than the down payment ratio of commercial loans. For example, if Sha buys his first house, the down payment is 20; if he uses a commercial loan to buy his first house, the down payment is 30.

4 No liquidated damages will be charged for early repayment

As we all know, when using commercial loans to repay early, a certain amount of liquidated damages will often be charged. However, when using provident fund loans, whether you repay part of the loan in advance or repay it in full, only the principal and interest are required, and no additional penalty is required.

5 Provident Fund loans have few restrictions on the age of the house and the age of the borrower

In most areas, the requirements for provident fund loans on the age of the house are relatively flexible, and the sum of the age of the house and the loan period is not the same. You can apply if you are more than 50 years old.

To sum up, there are still many benefits for employees to use provident fund loans to buy houses. If you are worried about insufficient loan limit, you can also choose a combination loan, which is much more cost-effective than a pure commercial loan.