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Employee Provident Fund or EPF is a central government-approved scheme providing retirement benefits for salaried class. Apart from the tax-saving benefits, one can avail personal loan including a home one from the EPF account. This option has been provided by the Employer’s Provident Fund Organization (EPFO) to the employees. While you are free to avail the loan from your EPF account, EPFO does verify the reason behind the move.
Home Loan: You can borrow money for purchasing a home or plot. You can also avail the loan for the home loan payment. Apart from these, you can also avail the loan to renovate or expand your house.
Apart from these, you can avail the loan for your own marriage, your son’s and daughter’s wedding. You can avail the loan for the education purpose of yours or your daughter, son, brother, or sister. You can avail the loan for medical treatment for your wife, daughter, son, parents in case there is some serious illness. You can take a loan if there are any losses due to calamity. If there is a situation in which one fails to withdraw salary, EPFO allows taking a loan.
Home Loan Eligibility: EPFO lays down a few norms before allowing you to take a loan.
If you are taking the loan to purchase the home or plot, the property must be in the name of the borrower or his or her spouse or it can be jointly owned. You can take up to 36 times of monthly wage and dearness allowance for purchasing a home. If you are purchasing land, you will get up to 24 times of monthly wages and dearness allowance (DA). You need to be in service for five years to avail this loan.
If you are taking the loan for Home Loan Payment, you can borrow up to a maximum of 90 per cent of the amount deposited by both employer and employee. One needs to be in service for 10 years to avail the loan.
If you are taking the loan for alteration or renovation of your house, you can avail yourself 12 times of your wages and you must be in service for 5 years.
To avail loan, you must have an activated Universal Activated Number (UAN), a mobile number linked with the UAN number, Aadhaar details, Bank account details, IFSC Code details, PAN number linked with UAN.
EPF Loan – Step-by-Step Guide
– You need to visit the Member e-SEWA website first. Then you need to log in with your UAN and Password.
– You need to go to the ‘Manage’ section. After that, you need to verify your KYC details. These will include Bank details, Aadhaar, and PAN.
– After that, you need to go to the “Online Services” section. You need to select “CLAIM (Form – 31, 19, and 10C).
– Subsequently, you will be able to see the member details. You need to enter the last 4 digits of your bank account. Once you do that, please click on ‘Verify’.
– You need to sign the certificate of undertaking by selecting ‘Yes’.
– You need to select the “Proceed for Online Claim”. Then you need to select “I want to Apply For”. You have to provide the reason for taking the loan, the amount you want to withdraw, and the employee’s address.
– The EPF account loan is generally transferred to your account within 15-20 days of submission of the loan request and the nod by the employer.
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