The Employee Provident Fund Organization, or EPFO, is a government-sponsored program that allows subscribers to make partial withdrawals, or “advance withdrawals,” from the PF corpus under certain conditions. Employers and employees contribute a predetermined amount each month. A corpus for your life after retirement is helpful.
Following the RBI’s repo rate increases, home loan interest rates have recently increased. Some banks have increased their interest rates for both new and existing customers. The rising interest rates on home loans sparked discussions about what borrowers should do to reduce their interest payments relative to their outstanding loan balance.
They may want to think about using money from their Employees Provident Fund (EPF) to prepay some or all of their house loans.
You can use your EPF balance to pay off your home loan:
In accordance with the EPF scheme’s Section 68BB, you can withdraw the home loan repayment funds. However, the house must be registered in the individual or joint names of the PF member. A house loan applicant must have contributed to PF for at least ten years. The withdrawn PF amount will not be subject to taxation for the first five years of uninterrupted service.
How to get money out of your PF savings to pay off your home loan:
- Enter your UAN, password, and captcha code to access the EPFO e-SEVA portal.
- Go to the section titled “Online Services” and enter your bank information.
- Select the reason for withdrawing EPF savings.
- Enter your address and other information.
- Upload the document.
- Confirm the terms and conditions.
- Receive the aadhaar OTP on the registered mobile number.
- Your application will now be submitted.
If the home loan interest is greater than the EPF interest, you can use the EPF corpus to pay off the mortgage and save money on interest. If the interest on your EPF is greater than or equal to the interest on your mortgage, you may be able to keep your EPF corpus.
