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Thread: HDB loan

  1. #1

    Default HDB loan

    As I'm considering taking HDB loan to conserve cash, I'm planning to invest my CPF of about $40k each for me and my spouse in UOB SGD fund Class A to prevent it from being wiped out and compensate for the higher interest of HDB loan. Being concentrated on a single asset class, I have to consider the worst case scenario. As the fund consists of short term investment grade bonds, there should not be capital loss for an investment horizon of 2-3 years (the underlying bonds would have matured with bankruptcy of the companies highly unlikely). Are there other unknown risks that I should be aware of if I choose this option? Would like to hear your views. Hope the discussion can focus on the above and not if I should take bank or hdb loan.

  2. #2

    Default

    There is $100,000 in CPF account, and outstanding $100,000 loan.
    There is the option to either:
    1) Pay off the $100,000 loan completely (CPF left $0, and loan outstanding is $0)
    2) Slowly pay it off by monthly installments (CPF still have $100,000, and loan oustanding remains $100,000)

    1st $40k of the CPF account earns 3.5%, and there is monthly $1000 contribution to OA.

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