First of all, the interest rate of provident fund loans is usually determined by the government to protect the housing needs of low-income groups. The interest rate set by the government is relatively low to help residents buy houses. The interest rate of commercial loans is determined by the relationship between market supply and demand, and is generally influenced by the market, so the interest rate is more flexible.
Secondly, provident fund loans often enjoy government subsidies or discount policies. According to the economic situation and housing policy, the government will give some preferential or subsidies to provident fund loans to reduce the loan interest burden. This makes the real interest rate of provident fund loans lower.
In addition, provident fund loans usually have certain preferential interest tax policies. For example, in China, the interest on provident fund loans can be reduced in personal income tax, which also reduces the burden on borrowers.
It should be noted that provident fund loans usually have some specific restrictions, such as use restrictions, quota restrictions, and purchase requirements. And commercial loans are relatively more flexible. Therefore, when choosing the loan type, the borrower should make a reasonable choice according to his own specific situation and needs.