What are the advantages of using provident fund?
1, tax-free
Provident funds are exempt from income tax. The part paid by the unit or enterprise for the employees can be charged before tax. At the same time, employees can apply for taking out the housing provident fund in advance with legal and valid proof materials, but this must be a loan enjoyed by employees who have paid the housing provident fund, or in the case of decorating their own houses.
2. The loan interest rate is low.
The interest rate of housing provident fund loans is 2.75% for less than five years and 3.25% for more than five years, which is much less than that of commercial loans. This means that housing provident fund loans have many advantages over commercial loans, such as saving money, flexible repayment and long service life. General commercial loans can reach about 70%, and the down payment pressure is relatively high. Provident fund loans can reach up to about 80%, and the requirements for housing age and fixed number of years are relatively low.
3, can be extracted when necessary.
Property buyers who meet certain conditions can also apply for withdrawal of provident fund. For example, after employees retire, they can withdraw the principal and interest of the housing provident fund at one time with valid documents, which is another considerable pension.
What should I pay attention to when using provident fund loans?
1. Pay attention to the loan conditions.
The general provident fund management center requires that the provident fund loan time can be continuously deposited for 6 months or more. Of course, some places require 12 months or more. To apply for housing provident fund loans, you should correctly evaluate your repayment ability, whether you have a down payment of not less than 30% of the house price, and your ability to repay the principal and interest every month.
2. Pay attention to the repayment method
Different cities have different repayment methods. Generally speaking, there are three ways: equal capital (the first month's repayment amount is large, and then it will decrease once a month), equal principal and interest (the monthly repayment amount is the same), and free repayment. You can also apply for provident fund repayment, that is, entrust the bank to withdraw the balance of the provident fund account to repay the loan. There are two options: "monthly repayment" and "annual repayment".
3. Be cautious about prepayment.
If you want to consider early repayment, then according to the relevant provisions of provident fund loans, you must repay the loan after one year, and the amount of early repayment must exceed the repayment amount of six months.
4. The provident fund cannot be used as the down payment of the house.
Here, we need to know the consumption principle of the provident fund: first consume and then withdraw, that is to say, only after buying a house can we go through the withdrawal procedures of the provident fund to ease the repayment pressure of buying a house.
As the basis of mortgage loans, provident fund loans must be properly kept, such as loan certificates, IOUs signed with banks and other legal documents, which are very important documents with legal effect.