PF Account Holders: Big news! The loan can be repaid with PF money, you can withdraw up to 90% of the amount, know its process!

PC: informal Newz

To avoid paying interest for a long time, people keep looking for the option of prepaying the loan. The amount lying in the EPF account can be an alternative. However, is it right to repay a home loan with a retirement fund amount? It depends on which of the two has the higher interest rate.

See the difference between interest and your age

If the home loan interest rate is higher than the EPF rate, you can prepay the loan with this amount. Apart from this, even if you are in the initial phase of your career, you can choose this option because you will have a long time to deposit the money.

Withdrawals up to 90% allowed

EPFO allows the withdrawal of a maximum of 90% of the deposited amount to repay the home loan. For this, 10 years of service should be completed. Also keep in mind that the home loan should be taken from institutions like a nationalized bank, registered cooperative, or National Housing Board. Under the Home Loan Repayment Scheme, EPFO ​​members can pay EMI from their accounts.

How to withdraw money to repay the home loan?

Login to EPFO ​​e-Seva portal.

Enter your Universal Account Number and Password.

Click on Online Services.

Claim through Form 31.

Verify your bank details.

Select the reason for withdrawing money.

Upload relevant documents.

Do not withdraw money from the PF fund unless it is absolutely necessary.

Money management experts believe that one should avoid withdrawing money from PF unless it is very necessary. Interest is being given on this at the rate of 8.15 percent. The bigger the amount withdrawn from PF, the more will be the impact on the retirement fund.

How much is PF deducted?

According to the rules, it is mandatory for salaried people to deposit 12 percent of their salary and dearness allowance in the PF account. At the same time, 3.67 percent of the amount deposited by the company is deposited in EPF. The remaining 8.33% is deposited in the Employees' Pension Scheme (EPS).