You can use your Provident Fund to pay back your mortgage. You can withdraw 90% of your EPF to pay off home loans. Employees’ provident fund (EPF) can be removed for retirement at 55 years of age. It can also be started sooner for home renovations, wedding expenses or education costs, financial emergencies, and home construction.
How do I withdraw the Provident Fund amount to repay a home loan
Step 1. Log in to the EPFO eSEVA portal.
Step 2: Input your UAN and password to log in
Step 3. Visit the “Online Services.”
Step 4: Select “claim form 31” from the dropdown menu.
Step 5: Enter the bank account information and click Verify
Step 6: Once you have read the Terms and Conditions, check them.
Step 7: Select the claim settlement and proceed with the online claim.
Step 8 Select the purpose for the advance
Step 9: Enter the details, such as the address and amount.
Step 10: If required, upload the documents.
After completing the required steps, your application will be sent.
You can withdraw the amount of your Provident Fund to pay off a mortgage loan by following these steps:
- Check Your Eligibility– You are only eligible to withdraw PF for the repayment of a home loan if you’ve completed five years of continuous service at your employer. You may not be able to remove the PF amount if you haven’t completed five years of continuous service with your employer.
- Fill out the form. You must fill in Form 31 (Application to Advance Fund Amount) to withdraw your PF amount. Download the form on the Employees’ Provident Fund Organisation (EPFO) website or ask your employer for it.
- Attach all required documents. You must attach documents like a copy of the loan agreement for the home, proof of ownership, and a bank letter stating how much you owe and your interest rate.
- Submit form: You must submit the completed form along with the required documents to your regional EPFO office or your employer.
- Await the approval– After you have submitted the form, EPFO will check the documents and process your withdrawal request. The license may take from a couple of days to several weeks.
- Receive your amount– If you withdraw your PF, it will be credited to your account.
Note– It is important to know that you can only withdraw a certain percentage of the total amount of your PF account. This percentage will vary depending on what the withdrawal is for. Taking money out of your PF can also affect your retirement savings. It’s best to consult a financial adviser before making any decisions.
Checklist for withdrawals from EPF accounts online
Check the eligibility requirements before submitting an online withdrawal request from your EPF account.
The following conditions apply:
A) The Universal Account Number or should be activated
Aadhaar numbers should be linked with UAN and verified
C) UAN should be deposited in a bank account that has the correct IFSC.
D) EPF accounts must be KYC-compliant
You will receive an OTP to the mobile number linked to the Aadhaar Card. Make sure that it is activated.
In the event of retirement, it is important to update the EPFO records with an accurate date of birth.
What you need to Know to Repay your home loan with PF amount
- Eligibility As we have already mentioned, you are only eligible to withdraw your PF for the repayment of a home loan if you’ve completed five years with your employer. You may not be eligible to start if you haven’t completed the five-year service requirement.
- Maximum withdraw limit– The maximum amount you can withdraw is a percentage of the total balance of your PF. This percentage will vary depending on what purpose it’s for. You can remove up to 90% of your PF balance for home loan repayment.
- Tax implications – The amount withdrawn for the repayment of your home loan is tax-free. If you cancel your money before five years of service, it will be added to the amount that is taxed.
- Repayment – Withdrawing PF funds for home loan repayments can help reduce the burden of paying EMIs. However, you still need to ensure you have sufficient funds available to cover your regular expenses as well as emergencies.
- Impact of withdrawals on retirement savings – Withdrawing money from your PF can affect your retirement savings. Withdrawing money from your PF account can affect the amount you have available when you retire. Consult a financial adviser to determine the impact on your retirement savings.
- Application Procedure To withdraw your PF amount, you must fill out Form 31 (Application to Advance Fund Amount) and submit the form along with all the necessary documents to either the regional EPFO office in the area or to your employer.
- Time for verification and processing– The EPFO verifies the documents and processes the withdrawal request. The approval of your withdrawal request and the crediting of the money to your account may take up to several weeks.