When Does LPPSA Repayment Start?
LPPSA salary deduction does not always start the same way. Here is the general rule by financing type — always verify with LPPSA.
Quick answer
For completed/land/settlement financing (Type 1/4/5), LPPSA salary deduction generally starts the next month if disbursed on the 1st–15th, or the second month after disbursement if disbursed on the 16th–31st. For build/under-construction financing (Type 2/3/6/7), deduction generally starts the month after 95% disbursement or the 25th month from approval, whichever is earlier. These are general timings — confirm with the official LPPSA FAQ and your offer letter.
Key takeaways
- Type 1/4/5: deduction timing follows the disbursement date.
- Type 2/3/6/7: deduction starts after 95% disbursement or month 25, whichever is earlier.
- There is no bank-style progressive interest during LPPSA construction.
- Verify the exact timing with LPPSA and your offer letter.
Completed, land and settlement (Type 1/4/5)
If disbursement happens on the 1st–15th of a month, deduction usually starts the following month. If it happens on the 16th–31st, deduction usually starts the second month after disbursement.
Build and under-construction (Type 2/3/6/7)
Deduction usually starts the month after 95% disbursement, or the 25th month from the approval date, whichever comes first. Unlike a bank loan, you do not pay progressive interest as each stage is released.
Checklist
- Know your financing type.
- Note your approval date and expected 95% disbursement.
- Confirm the exact deduction start with LPPSA / your offer letter.
Watch out for
- Timing is an estimate — the offer letter is the source of truth.
- Do not assume deduction never starts until the home is finished — month 25 can trigger it.
Frequently asked questions
When does LPPSA start deducting my salary for an under-construction home?
Generally the month after 95% disbursement or the 25th month from approval, whichever is earlier. Verify with LPPSA and your offer letter.
Is there progressive interest with LPPSA like a bank?
Not in the same way. LPPSA generally has no bank-style progressive interest during construction; deduction begins based on the 95% / month-25 rule. Confirm with LPPSA.
Related guides
LPPSA Financing Types 1–7
LPPSA has seven financing types, and repayment starts differently depending on the type. Here is the plain-English version — verify with LPPSA.
Read guideLPPSA vs Bank Progressive Payment (Under Construction)
For an under-construction home, LPPSA and a bank loan handle the construction period very differently. Here is the cashflow difference — verify with LPPSA.
Read guideLPPSA vs Bank Loan
How LPPSA financing differs from a normal bank loan, so government servants can compare fairly.
Read guideImportant
This content is for general education only. It is not legal, financial, banking, valuation, tax, investment, or property advice. Always verify with the relevant bank, lawyer, valuer, agent, developer, auctioneer, land office, LPPSA, LHDN, or authority before making decisions.
Last reviewed: 2026 edition · Rules, rates and fees change over time. Always confirm the latest figures with the relevant authority before you act.