How to apply EPF loan ?
Loan is always act as a hurdles in your financial journey. Beware of loan , It causes unexpected Financial strain. You have to avoid loan to achieve your financial goal. Any loan other than EPF Loan is financial traps, dangers followed behind loan offer.
After reading this article you will save yourself from unforeseen consequences of Loan withdrawals. Unlock opportunities of EPF by being a EPF member you will enjoy hassle free loan withdrawal from UAN portal of EPFO.
In this article of How to apply EPF loan I help you to figure out eligibility, how much you get, how to apply step by step process, rate of interest ,how to settle loan, required documents, time required to get advance money to your bank account etc.
Many cases were seen where employees need instant money to meet emergency. Borrowing from friend and take loan from bank came to mind. First one is good option but not available promptly for every one. So every one choose second one. What if I tell you that there lies a third option and better one.
Yes, EPF loan or EPF advance is a good option for an employee to get instant money with no interest.
What is EPF Loan or EPF advance ?
Employee Provident Fund Organization has made a provision for the members of EPF to take certain amount of money in the rime of emergency situation like medical case, marriage ceremony, education, house building etc.
Basically when a member accumulate some money in the EPF account, then EPFO allows him/her to withdraw some of it to take and meet some personal or emergency requirement.
Is it recommended to take EPF loan ?
I should not recommend any EPF member to withdraw EPF advance or loan because the compound interest get hampered when some of the fund withdrawn from members account. This affect in long run to grow money in multiplied rate.
Related article:
♦How to calculate EPF from your Salary ?
♦How to check balance in Passbook ?
What are the criteria to apply EPF loan ?
Yes, there are some criteria defined to withdraw PF advance or PF loan, Those are mentioned below,
- Education:- A member can take advance or loan for fulfilling education of self or education of son, daughter, brother etc.
- Marriage :- A member can withdraw advance or loan for own marriage or marriage of son, daughter, etc.
- House Building :-To purchase flat or Plot for building house a member can take advance or loan from EPFO. EPF loan can also be taken for the renovation of House.
- Medical Emergency :- For the purpose of medical treatment of self and family one can withdraw PF advance or take loan.
- Home Loan Payment:- EPF loan can be applied for the payment of home loan though to comply certain criteria defined by EPFO.
Things to keep ready before applying EPF loan
Below points to kept in mind or most importantly to be ensured before applying for EPF loan in UAN portal.
- UAN to Activated and Password to kept remembered.
- Mobile number linked to Aadhar to receive OTP.
- Aadhar number, Pan Number shall be updated in EPFO database.
- Bank account details shall be uploaded into EPFO KYC.
- IFSC code of Bank account shall be correct.
Related article :
How to apply EPF loan online ? ( Step by Step Guide)
Step-1: Visit EPFO home page and go to UAN portal by entering UAN number and Password.
Step-2 : After opening home page of portal mouse hover on ‘Online services‘ and click on ‘Claim(Form-31,19,10C & 10D)‘
Step-3 : Check all your information and verify your Bank account details by entering bank account and click on ‘Verify‘.
Step-4 : Sign the certificate of Undertaking by Click on ‘Yes‘.
Step-5 : Click on ‘Proceed for Online Claim‘ and then select the claim type from the menu of ‘I want to apply for‘ .
Step-7 : Provide the reason or purpose for the claim. and upload scan copy of your passbook.
Step-8 : Submit the application form
How can I check my EPF loan eligibility ?
Employee must have competed 5 years of continuous service, An EPF member can withdraw an amount of 24 times of monthly salary i.e. basic plus DA.
How many days you have work to get EPF loan or EPF advance ?
Details of EPF loan eligibility is given below ,
- Education: 7 years
- Marriage: 7 years
- Purchase of Home or Plot : 5 years
- Medical Treatment : Any time
- Home loan payment :10 years
- Natural Calamity: Any time
- Expansion or modification of House : 5 years
- Lockout : Any time
What is withdrawal limit of EPF Loan ?
- Education: Up to 50% of Employees share contribution
- Marriage: Up to 50% of Employees share contribution
- Purchase of Home : 36 times of monthly salary
- Purchase of Plot : 24 times of monthly salary
- Medical Treatment : 6 times of Salary
- Home loan payment :Up to 90% of both employee and employer contribution
- Natural Calamity: 50% of employee share of contribution.
- Renovation of House : 12 times of salary
- Lockout : Equal to the salary not paid during the time of lockout
What is the EPF loan repayment procedure ?
Usually EPF allows two option for the settlement of loan
- Refundable Loan: In this option member have to refund all the money take from EPF as loan with in certain time period.
- Non-refundable loan: In this option member not required refund money. certain amount of money debited from EPF account of employee every month until settlement.
What is the rate of interest for EPF loan ?
No interest is charged while taking loan or advance against EPF. The amount get adjusted from EPF amount every month.
EPF loan Calculator:
Refer EPFO to know EPF loan Calculator
When can I take loan from my PF account ?
If you have worked 5 years of continuous if service, specifically contributed continuously for more than 5 years, then you are eligible to apply EPF loan or EPF advance and take money from EPF.
EPF Loan Eligibility Calculator
Refer EPFO to know EPF loan eligibility Calculator
PF loan processing time:
Mostly within 15- 20 days after applying of application, amount credited to bank account.
Conclusion :
I have covered all the answer of How to apply EPF loan on above. If it valued your time and found the information, kindly send your valuable feedback on comment below.
I want to learn from your comment.
Q&A Section:
What is the two types of EPF Loan?
Two types of EPF loan are Refundable loan and Non refundable loan.
What is Non-refundable Loan ?
Here member not required refund money. certain amount of money debited from EPF account of employee every month until settlement.
What is refundable loan ?
Here member have to refund all the money take from EPF as loan with in certain time period.
Can I take loan from Bank against EPF?
No, Bank is a separate entity and is completely different from Employee Provident Fund. An employee can take loan from EPFO on the basis of the amount of money deposited in his/her EPF account.
How many times we can take loan from our EPF account ? .
One can use 50% of the total PF fund. One can take loan against PF up to 3 times in a Year
What amount can we withdraw from EPF for a housing loan ?
Any EPF member can withdraw Up to 90% of both employee and employer contribution for showing the reason of housing loan.
Difference between Personal Loan & PF Loan. Which Is better ?
Personal loan is taken from bank where is PF loan is withdrawn from EPFO. EPF loan is better because personal loan carries interest rate more than 12% and PF loan has no interest rate. Bank also keep documentary charges from your Personal Loan amount, in PF loan no charges debited.
Is tax applicable on PF loan ?
Yes PF loan is fall beyond the tax limit and it will be considered as taxable amount and tax levied on PF loan amount.
How many time can I apply for PF advance for illness ?
One time you can apply for your illness. You may also take PF advance for illness of your family members.
What is the maximum limit for PF advance Form 31 ?
Maximum limit depends upon you PF amount available in your EPF account. Different percentage of your EPF amount can be withdrawan for different purpose.
What are the documents required for marriage loan from EPF ?
- Proof of Date of Birth
- Wedding Invitation Card
- Cancelled Cheque/Copy of Bank Passbook
- Aadhar Card
How many amount of money one can withdraw from Marriage loan ?
50% of Member’s Provident Fund or 10 Month Basic salary of employee.
What are head for which one can claim Marriage loan ?
Marriage, Education, House Construction, House alteration & Modification, Purchasing of Flat, Purchasing of site, Medical Emergency, religious Ceremony.
Summary on How to apply EPF loan
- Eligibility
- Step by Step Process
- Things to keep in Mind and document to make ready
- Withdrawal Limit
- Loan repayment Procedure
