Using PF Withdrawal for Home Loan Repayment: A Step-by-Step Guide

The Employees’ Provident Fund (EPF) is a long-term savings scheme funded by payments from the employee, employer, and government in certain situations. The Employees’ Provident Fund Organisation (EPFO) administers a social security program to provide individuals with a safety net upon retirement. In this article, learn how you can apply for home loan and use PF money to repay your loan amount.

Steps to Withdraw PF to Pay Home Loan

These are the followings steps that you need to follow:

Eligibility Criteria

Withdrawal of the PF money for house loan repayment is only permissible after completing a minimum of five years of uninterrupted service with your company. If you have not reached the age of five years, you may not meet the requirements for withdrawal.

Form Fill-up

To withdraw the PF amount, you must complete the Form 31, the Application for Advance from the Fund. The form may be obtained by downloading it from the Employees’ Provident Fund Organisation (EPFO) website or by requesting it from your employer. Before you fill out the form, check the home loan interest rate

Documents Required

Please include the necessary documentation, such as a photocopy of the home loan agreement, evidence of property ownership, and a letter from the bank or financial institution indicating the remaining loan balance and interest rate. 

Submission of the Form

You must submit the completed form and the required papers to the relevant regional EPF office or your employer to complete the process. 


Upon submission of the form, the EPFO will authenticate the papers and proceed with the withdrawal request. The approval process may vary in duration, from several days to weeks.

Eligibility on Home Loan EPF Withdrawal 

The following points need to be considered:

  • To settle the remaining home loan, the PF member can take a maximum of 90% of the corpus, provided that the house is registered in their name or jointly held.
  • However, a minimum of 3 years of uninterrupted service is necessary to withdraw the specified sum.

Rules for EPF Withdrawal

The Employees’ Provident Fund is a retirement investing plan. Withdrawal should be avoided unless it is necessary. Nevertheless, if a member wishes to withdraw cash from their EPF account, they must be aware of the following EPF withdrawal regulations:

  • Withdrawals from the Provident Fund made within 5 years after starting the account are subject to taxation. Nevertheless, no Tax Deducted at Source (TDS) would be levied if you withdraw below Rs. 50,000.
  • Withdrawing the provident fund is unnecessary when changing employers since the PF may be conveniently moved to a new account using the online procedure.
  • According to the regulations, taking the balance of the Provident Fund from a job in which you are actively engaged is not permissible.
  • Employees can make a partial withdrawal from their provident fund through a loan.

Things to Know Before You Withdraw EPF for a Home Loan

Maximum Limit

The withdrawal limit is determined by a certain proportion of your entire PF balance, which may change based on the purpose of withdrawal. Regarding repayment of a house loan, it is possible to withdraw a maximum of 90% of your PF balance.

Tax Implications

Withdrawals from your PF account for house loan repayment are exempt from taxation. Nevertheless, should you choose to withdraw before completing a continuous service period of five years, the withdrawn amount will be included in your taxable income and subject to taxation accordingly.

Effect on Savings for Retirement

Withdrawing money from your PF account might have a detrimental effect on your retirement savings. The purpose of the PF account is to accumulate savings for your retirement, and removing money from it could reduce the total amount accessible at retirement. It is recommended that you seek the guidance of a financial counselor to evaluate the consequences of withdrawing your retirement funds.

Home Loan Repayment

Utilizing the PF cash to repay the house loan might alleviate the obligation of paying EMIs. However, ensuring that you possess sufficient income to cover your routine expenditures and unforeseen circumstances is important.


These are the following things that you should keep in mind before you apply for a home loan. Utilizing your Provident Fund (PF) withdrawal to settle your house loan is a pragmatic measure towards achieving financial security. According to the systematic instructions, you may effortlessly go through the procedure. Using your provident fund resources to repay your house loan might alleviate your financial stress and move you closer to acquiring your desired property.

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