EPF Loan: All You Need To Know About Employee’s Provident Fund Loans

Understand how you can avail a loan or make a partial withdrawal from your EPF account.

<div class="paragraphs"><p>Source:&nbsp;Josh Appel&nbsp; on Unsplash</p></div>
Source: Josh Appel  on Unsplash

The Employee’s Provident Fund (EPF) is among the key savings and investment instruments, especially for your retirement. Contributions made by both you and your employer are deposited in your EPF account. While the provident fund is a retirement planning instrument, you can also opt for EPF loans for various purposes before retirement.

You can make partial withdrawals against your provident fund throughout the course of your employment to take care of certain financial emergencies. When you apply for an Employee’s Provident Fund loan, the EPFO will verify your reason for EPF withdrawal and process the request only if the reason is justifiable.

Reasons for Availing EPF Loans

Here are some of the reasons for which you can apply for an EPF loan:

  • Marriage

    You can apply for a provident fund loan or EPF advance for your own wedding or for your child/sibling’s wedding expenses.

  • Education

    Funding your own or your child’s education can also be the reason for EPF withdrawal.

  • Purchase of a plot or home

    You will require a significant amount of money for purchasing a home or plot. You can apply for an Employee Provident Fund loan to fund this purchase.

  • Medical treatment

    If you, your spouse, children or parents need to undergo medical treatments for a serious illness, you can partially withdraw your EPF deposits to pay for such expenses.

  • Repayment of home loan

    You can apply for an EPF advance to repay your home loans.

  • Home renovation

    You can also take an EPF loan to renovate or expand your house.

EPF Loan Interest Rates

An EPF loan is nothing but a premature withdrawal from your Employee’s Provident Fund account. Hence, you do not have to pay it back to the EPFO. This also means that an Employee’s Provident Fund loan does not have an interest rate.

Conditions for EPF Loans

The eligibility criteria to avail an EPF advance varies as per the purpose of withdrawal. Let’s understand this with the following table:

EPF Loan: All You Need To Know About Employee’s Provident Fund Loans

Apart from the above-mentioned terms and conditions, you will also need to fulfil the following additional requirements to file for an EPF withdrawal:

  • Your Universal Account Number (UAN) must be activated.

  • The mobile number linked to your UAN must be active for receiving the one-time password.

  • Your Aadhaar, PAN and bank account details must be linked to your EPF account.

Documents Required for EPF Loans

Here are the forms you will need for employee PF withdrawal:

  • Form 10-C: In case of pension withdrawal benefit.

  • Form 19: In case of final PF settlement.

  • Form 31: In case of partial EPF withdrawal.

Procedure to Apply for an EPF Loan

Here is the online procedure to apply for an EPF advance:

  1. Visit the EPFO website and log in with your UAN.

  2. Move to the ‘Online Services‘ section and select the ‘Claim (Form-31, 19, 10C &10D) ‘ option from the drop-down menu.

  3. Now, enter your bank account number and click the ‘Verify‘ button.

  4. Click ‘Yes‘ to sign the Certificate of Undertaking.

  5. Now, click on ‘Proceed for Online Claim‘ and choose your claim type from the tab ‘I Want to Apply for‘ option.

  6. Provide the purpose for your claim, the claim amount, your address, and upload a scanned copy of your bank account passbook or cheque.

That’s it. The claim amount will be credited to your bank account within 15-20 days following the claim request and your employer’s approval.