I believe most of you know that we are eligible to withdraw EPF or KWSP money from account II for the purpose on buying new house or reducing loan amount or monthly loan repayment. I believe this is great facility offered by EPF.
However, I am shock when I come across an article where someone claim that EPF scam us if we withdraw money from Account II for monthly housing loan repayment.
When you apply for monthly loan repayment, imdavidlee.com point out that EPF will deduct the amount that you apply from account II and transfer it somewhere before they make monthly repayment to the bank. Since that money no longer in account II, you are no longer entitle to earn dividend for that sum which can be substantial if the amount that you apply is huge and longer repayment period. You can read more at imdavidlee.com for example.
If this is true, than it is better to withdraw the money as a lump sump rather than monthly repayment. Later on you can ask the bank convert it to monthly repayment.
If you have any experience on this matter, please confirm.