EPF for Home Loan? Think Twice! Tax-Free Returns Outweigh Early Debt Relief

• Using EPF to clear home loans offers immediate relief but can jeopardize long-term financial security.
• EPF is a compulsory retirement instrument with tax-free 8.25% annual interest, making it a highly efficient long-term investment.
• Home loans become easier to manage over time as interest component reduces and salaries typically rise.
• An 8.25% tax-free EPF return is equivalent to nearly 11% from a taxable investment for high tax slab individuals.
• Withdrawing Rs 20 lakh EPF saves Rs 9 lakh in home loan interest but sacrifices Rs 44 lakh tax-free growth over 10 years.

Why It Matters: Prioritize EPF's tax-free growth for retirement over early home loan repayment for stronger financial future.