Readers' Corner: Sanjay Agarwal

I am 35 and I need Rs 5.5 lakh urgently. I prefer withdrawing from the Employee Provident Fund (EPF) and take a small loan, so that I don't have a huge monthly outgo. What will you advise?
Withdrawal from EPF is allowed for specific purposes and for specific limits only like building of a house, illness, marriage, children education, etc, which can be seen on the website epfindia.gov.in.

Withdrawal from the fund should be the first priority, beyond which you may consider taking a personal loan. You could subsequently increase your contribution towards EPF or deposit in the Public Provident Fund (PPF) account to take care of your savings for retirement.

Which is a better option, personal loan or gold loan?
The cheaper option is always a better option for borrowers who intend to repay the loan and gold loans are generally cheaper. The issue that needs to be considered is that you might not be able to use the gold or jewelry till the loan is settled and the collateral requirement is presently higher than what it used to be earlier.

I am 55 and have two sons. I used all my personal savings and have taken a loan of Rs 8 lakh for my elder son's education in a private engineering college. He will complete his degree two years later. Now, the younger one also insists on getting admitted in a private college. I earn Rs 40,000 a month and I have not been able to save over the past two years because of children's education, home loan and other household expenses. My only saving left is EPF. Would you advise I liquidate EPF over taking another loan?
Today, banks offer very good educational loans to students to be repaid by the latter after completing their studies over a period of five-seven years, which is what I'd advise your son. The role of the parent could be to stand as a guarantor or offer collateral if the loan is of a higher value.

Sanjay Agarwal,

senior vice-president & group head, retail business group & technology solutions group, Arcil, answers your queries

The views expressed are the expert's own. Send your queries to yourmoney@bsmail.in