Are you bored off with your old house? Do you want to shift to a new flat? When there are all ways closed, EPF opens its gates. Thus, in this article, you’ll know in detail about the EPF withdrawal for refunding housing loan.
Why Go For EPF Withdrawal For Refunding Housing Loan?
A spacious, beautiful house is one of the most demanded necessities for every human. Changing the wall color, changing your old wires with new ones, incorporating new designs, etc. is what people demand and require.
Yet, not every time you can have a thick pocket for this, right. So, either you’ll take a loan from a bank or any close acquaintance. However, EPFO now proposes to provide bucks for the refunding of the housing loan.
True that the money in your EPF account is for your future needs. Yet, you can extract the amount from your PF account in times of need.
For this cause, you’re free to extract 90% of your total amount in EPF. Section 68BB of the EPF and miscellaneous provisions act, 1952, is the revised form that allows EPF extraction in certain cases. These special cases include the loan for purchasing or creating a new house or flat.
Terms and Conditions Required For EPF Withdrawal For Refunding Housing Loan
There lies a few terms and conditions that you must fulfill to avail of this option. These are mentioned below-
1. The house you’re taking a loan must be legally in your or your spouse’s name. Otherwise, it must be the joint property of you and your wife. If it lies in the name of a third person, you’ve to transfer it to your name. If not, you shall get debarred from availing it.
2. You must ensure that you finish the entire construction procedure within 6 months to a max of a year.
3. If that is a ready-made house you’re planning to get in, that indulges another rule. For that, you need to make sure you make the dealings successful within 6 months.
Which Form To Choose To Avail Housing Loan?
For such a cause, you need to opt Form-31. You can easily download it in the authentic site of EPFO.
Eligibility Criteria To Avail Housing Loan
This scheme is not applicable for you if you don’t fulfill the below-mentioned criteria-
- Make sure to have rendered at least 5 years’ service to your organization.
- Another yet most important thing is the legal ownership of that flat or house. Make sure you or your wife or both are the legal owners of the property.
How to Apply For Refunding of Home Loan?
You can withdraw from your EPF account for loan repayment in two ways
Total Time: 2 hours and 30 minutes
In case you opt for the offline mode, you’ve to carry out all the paperwork physically. That is, first, you need to handover the authority an application to get a housing loan. Furthermore, you’ve to visit the authenticate EPFO site and take a copy of the claim. The claims are of two types, Aadhar and non- Aadhar.
If you opt for online EPF withdrawal, follow the below-mentioned steps-
1. Go to the authentic site of EPFO.
2. Provide your UAN number and required the correct password. Make sure you’ve tied-up your UAN number with your PAN card or Aadhar number, etc.
3. There you’ll find an option ‘MANAGE.’ Click it and select KYC. You must verify your Aadhar, PAN card information, and bank details.
4. After providing all the information, tap on the box showing ‘ONLINE SERVICES.’ From all the forms, select the one- form-31, 19, and 10C. Since you’re applying to refund your home loan, you need to tap on form-31.
5. After choosing the options, a new page opens. It contains information regarding your name, DOB, active mobile number, Aadhar card details, PAN number, IFSC code, etc. Provide all the details as asked.
6. Thereafter, provide the last 4-digits at the back of your ATM card, i.e., your account number.
7. After doing all this, a message of ‘certificate of undertaking’ comes. Then comes a ‘Terms and conditions’ box. You must go through it and then tap on the option showing yes.
8. Finally, tap on ‘PROCEED.’ At last, select the option showing ‘Claim.’
How Much Can You Withdraw From EPF?
You’re free to extract a total amount of about 36 times of your monthly wage. However, in case you possess an amount lesser than that, you’ll have to adjust. That is, the lesser amount gets into account.
Apart from that, you can make use of this opportunity only once. There’s no second chance for you to avail of such an opportunity in your entire lifetime.
For instance, let’s say you get Rs. 40,000 monthly as your salary. 36 times its value is 36*40,000 = Rs. 14,40,000. However, if you don’t possess that amount in your account, you’ll get what you have. That is, you’ll get the lesser amount that is calculated.
Frequently Asked Questions
1. Is it good to withdraw EPF for a home loan?
There can be many questions in your head about the financial needs after your retirement. Won’t you require any financial help for your medical treatment? Will you have enough savings for your family? There can be so many additional things. Isn’t it? So, it is certainly not a good idea to go for EPF withdrawals in the first place. However, if you genuinely do not have any other option, then go for it.
2. What is the new rule of EPF withdrawal?
You cannot withdraw the amount during unemployment, unlike bank accounts. EPF is a retirement savings plan and you can withdraw it only after retirement. However, if you’re unemployed for more than 2 months, you can withdraw 75% of your EPF corpus. After a month, you can extract the rest 25%. If within this 1 month you get fresh employment, this 25% gets transferred to your new EPF account.
Early withdrawal, i.e., withdrawal before 55 years is not possible. According to amended EPFO rules, you can withdraw 90% of your EPF corpus before your 1 year of retirement. Make sure, you’re above 54 years.
However, you can withdraw it partially in case of any emergency. Situations like serious illness, higher education, etc. are eligible for withdrawal.
As per the last prevailing rules of the EPFO, you can extract 100% only after 2 months of staying jobless.
You don’t have to wait any longer for your employer’s approval. You can directly do it in EPFO’s office. Make sure your UAN number is linked with your Aadhar and PAN card.
3. What are the points to consider to withdraw the EPF online?
i. You must have an active UAN number and a strong password.
ii. Make sure you’ve well tied-up your Aadhar card, PAN number.
iii. Also, link your mobile number with your UAN number. It’s quite mandatory since there would be an OTP generation. If the number is not tied-up, the process would end up in vain.
iv. You must have verified your EPF account with all the information regarding your KYC.
4. What is the eligibility for PF loan?
i. You must have served your company for at least 5 years or a safer side, more than that.
ii. The property for what you’re applying for the loan must be legally in your name. It can also be in your wife’s name or a joint property with you.
Thus, make sure you satisfy the above two criteria to get the EPF loan withdrawal benefit. However, it’s valid for you to exploit from the plan only once in your lifetime.
5. What is the interest rate on PF loan?
6. How long will it take for the money transfer to my account?
EPF is like your future piggy bank. It is your utmost duty to think twice before going for its withdrawal. Only when there’s no way left, you must opt it. Otherwise, choose the other way left. I hope, by this article, I was able to reach to your doubts. Peace!