Can the provident fund offset a loan? The money in the provident fund account cannot be used as a down payment for buying a house. The biggest function of the provident fund is to offset the loan and offset the repayment of the mortgage.

How to use the provident fund each month to offset your mortgage is a science. Generally speaking, there are two main common ways to offset your mortgage with your provident fund: monthly offset and annual offset.

1. A one-time offset is the most interest-saving annual offset, also known as the one-time repayment method.

Different from the monthly loan principal and interest repayment, the annual loan offset directly uses the entire balance in the provident fund account to offset the loan principal.

According to the regulations of the Provident Fund Center, the annual provident fund loan principal must be returned first, that is to say, the principal part of the commercial loan can be offset only after the entire provident fund loan principal has been repaid.

The annual offset method is actually a kind of early repayment, and the savings are mostly in the interest of the provident fund loan. At the same time, this method is more suitable for home buyers who have a large provident fund account balance and do not have much pressure on cash expenditure in the early stage of the loan.

According to the provisions of the Provident Fund Center, some conditions need to be met for the use of annual offsets: first, the housing loan must be full one year old before the principal can be offset; second, under normal circumstances, the amount of principal offset must not be less than

6 monthly repayments.

In addition, after the annual offset, the principal of the loan is reduced, and the corresponding monthly repayment amount will also be reduced. For those who have sufficient repayment ability, you can go to the bank to change your repayment method at this time, such as maintaining

The monthly repayment amount remains unchanged and the repayment period is shortened to further save interest.

2. The key to choosing annual or monthly offset depends on cash flow. Bank financial management experts believe that the correct way to choose annual or monthly offset depends on each person’s cash flow and loan repayment plan (whether they plan to repay the loan in advance)

wait).

Choosing monthly offset does not prevent early repayment of the loan. Home buyers can save the cash saved every month to offset the principal at the end of the year, and can give priority to returning the principal of the commercial loan. Choosing annual offset may cause greater cash flow pressure in the early stage of loan repayment.

, However, after one year, with the one-time offset of the loan principal, the monthly payment burden will also be significantly reduced.

However, the annual offset also needs to take into account that after the provident fund loan is repaid, the relatively low interest rate of the provident fund loan will no longer be enjoyed, and the monthly offset is more conducive to accumulating cash to repay commercial loans in advance.

Using the one-time repayment method, the client can only withdraw the housing provident fund once a year for loan repayment. Using the monthly repayment method, the client can withdraw the housing provident fund every month to repay the principal and interest of the housing loan in the current month. When the amount of the housing provident fund withdrawn is insufficient.

The borrower should make up the repayment amount in a timely manner and withdraw the housing provident fund, and can also repay the commercial housing loan. 3. Information required for processing the offset loan. The information required by the borrower to apply for withdrawing the housing provident fund and returning the loan will vary from city to city.

Slightly different, but generally include the following materials: the housing provident fund account number of the borrower, the borrower's spouse and the same borrower, ID card, marriage relationship certificate, household register and the borrower's latest loan repayment voucher; the borrower's employee

The savings repayment account; the original copy of the "Loan Contract" retained by the borrowing employee.

In addition, when the borrower applies for the change or termination of the housing provident fund repayment loan business, all original principals should bring the loan contract ID card household register and the original "Power of Attorney".

The details of the procedures and conditions for providing provident fund offset and loan repayment vary from city to city.