How to withdraw money from the EPF scheme for home loan repayment

Withdrawing money from your EPF account to repay a home loan is simple and straightforward. This guide can help you understand the withdrawal process, the documents required and the rules around how much money you can withdraw.

EPF Schemes

The Employees' Provident Fund (EPF) is a retirement savings scheme for employees in India. It is administered by the Employees' Provident Fund Organisation (EPFO). The savings scheme is specifically designed for the salaried class for the purpose of retirement planning.

However, in some situations, account holders can consider a withdrawal from EPF for purposes other than retirement. One of these qualified withdrawals includes the repayment of a home loan. Here's everything you need to know about how to withdraw money from EPF. 

Also Read: Have A Home Loan To Repay? This EMI Strategy To Save Interest And Close Your 20-Year Home Loan In Just 13 Years

EPF withdrawal rules for homeowners/buyers

EPF contributors can make premature withdrawals for expenses related to their homes. However, the purpose of withdrawal must include one of the following:

  • Construction of house
  • Purchase of house
  • Renovation of house
  • Repayment of a home loan

The limit of withdrawal can differ for each of these purposes. If the money is being used for home loan repayment, the withdrawal cannot exceed 90% of the total EPF account balance.

How to withdraw from EPF to repay a home loan

EPF scheme contributors can use the following steps to withdraw funds:

  • Visit the EPFO e-SEVA portal and log into the account.
  • Enter the Universal Account Number (UAN) and password. The portal will also ask for the captcha code to log in.
  • Go to 'Online Services' and click on 'Claim Form 31' from the dropdown menu.
  • Enter the bank information, such as the account number, name of the bank, and IFSC code.
  • Click on 'Verify'.
  • A page with the terms and conditions will pop up. Please read it carefully.
  • Select the claim settlement to proceed with the online claim.
  • Select the purpose of withdrawal.
  • Enter the amount to be withdrawn.
  • Enter the address.
  • Upload the documents, if required.

The application will be submitted, and the claim will be processed.

Also Read: Looking Beyond EPF: Other Methods That Let You Save For Retirement

Checklist to file withdrawal from EPF account online

To successfully withdraw funds from the EPF, contributors must ensure the following:

  • The UAN should be activated.
  • The bank account should be linked to the UAN.
  • Aadhaar must be linked to the EPF account and verified with the UAN.
  • All KYC formalities should be complete, and the account should be KYC compliant.
  • The account holder's mobile number should be active and linked to their Aadhaar.

Impact of EPF withdrawal for home loan repayments on contributors

While the government allows EPF account holders to use the funds for a home loan, it is vital to note that premature withdrawals can impact retirement planning goals. The EPF scheme primarily facilitates long-term savings for post-retirement needs. Taking out a large chunk of these savings can create financial troubles later. So, unless absolutely necessary, it is better to refrain from withdrawing the funds before maturity.

Further, it is essential to consider other investments and savings before making a decision. If account holders have sufficient savings in other investment securities that can support them in retirement, they may use their EPF for home loan repayment.



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