Personal Loan vs PF– Anyone can need money at any time. In such a situation, every person should keep an emergency fund ready, but some people do not understand the importance of emergency fund and it becomes very difficult for such people to arrange money in difficult times. Many people take personal loan from the bank in such a situation, while many people withdraw money from their PF account at such times.

 

Today we will tell you where can be the best option to arrange money when you need it. Let’s know.

 

Arrangement of money from PF

Suppose you need Rs 5 lakh and you are withdrawing money from your Provident Fund (PF) account, then it will cause a loss to your retirement fund. PF gives the benefit of an interest rate of 8.25 percent. Along with this, you also get the benefit of compounding. In such a situation, if you withdraw Rs 5 lakh, then you will lose the interest of Rs 2.45 lakh that you would have received in the next 5 years.

 

Arrange funds through personal loan

If you take a personal loan of Rs 5 lakh from the bank when you need money, then you will have to pay EMI every month. Personal loan is a very expensive loan. In such a situation, you may have to take this loan at a very high interest rate. Suppose you take a personal loan of Rs 5 lakh from the bank for a period of 5 years at an annual interest rate of 13 percent, then you will have to pay Rs 11,377 every month as EMI. In this way, you will pay a total of Rs 1.82 lakh only as interest.

 

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