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

There has been a rise in the home loan interest rate because of a rise in the RBI repo rate. Some banks increased home loan interest rates for new and current customers. Since then, discussions have been on regarding what you can do to apply for home loan or how to repay the existing one under such conditions. How can you decrease your interest payments against your overdue loan amount? One easy solution is EPF. It lets you save a small portion of your income for future benefits. Repay your home loan with the help of the money in your Provident Fund. The article will guide you on how to repay your home loan using your PF amount.

Steps to Withdraw PF Amount for Home Loan Repayment

Suppose people who want to apply for home loan or have already applied are worried about its repayment due to the high home loan interest rate. In that case, they can complete the loan repayment procedure through PF withdrawals. The steps to withdraw the Provident Fund amount for home loan repayment online are as follows:

  • Visit the EPFO eSeva official website.
  • To log in, enter your Universal Account Number and captcha code.
  • Navigate to the Online Services tab.
  • Click the Claim Form 31 from the drop-down menu.
  • Enter your bank details, and select the ‘Verify’ option.
  • Read and tick mark the terms and conditions.
  • Continue with the online claim process and click claim settlement.
  • Choose the reason behind the advance withdrawal of the provident fund amount.
  • Enter the required amount and address.
  • After uploading the relevant documents, accept the specified terms and conditions, and get the OTP on your mobile number.
  • Your application will be submitted after completing the steps stated above.

If you want to withdraw from your PF account offline, follow the steps given below:

  • Get Form number 31 from your employer.
  • Fill up the form and attach the documents, like apply for home loan agreement copy, residential property ownership proof, and a letter from the banking or financial establishment specifying the overdue loan amount and the home loan interest rate.
  • Submit the filled-up form and attached documents to your employer or the concerned regional EPFO office.
  • After submission, EPFO will authenticate the documents. Wait for the final approval.
  • After withdrawal acceptance, you’ll receive the amount in your bank account.

Things You Should Know Before Withdrawing Your PF Balance for Home Loan Repayment

If you want to apply for home loan but are concerned about the high home loan interest rate, you can repay your loan using your balance in your provident fund account. But there are certain things you should know before withdrawing your PF amount, which is as follows:

  • After five service years, you can only withdraw from your PF account to repay your home loan.
  • The maximum PF amount you can withdraw is restricted to a certain percentage of your overall PF balance, which may range based on your withdrawal purpose.
  • The PF amount you want to withdraw to repay your home loan is tax-free. Nevertheless, if you withdraw before completing five years of tenure, the withdrawn amount will come under taxable income and be taxed accordingly.
  • Although withdrawing the Provident Fund amount to repay home loans can decrease the burden of paying EMIs, you must ensure sufficient funds meet your daily expenditures and emergencies.
  • Since withdrawing the PF amount can affect your retirement savings, consult a financial advisor to analyse the effects of your PF withdrawals on your retirement savings.
  • The EPFO will validate the documents and process the request before approving your request. It may take days to weeks before the final approval, after which you will get the amount in your bank account to repay your home loan.

Things to Check Before Withdrawing from Your Provident Fund to Repay Home Loans

Before withdrawing from your Provident Fund account online, you should check the following eligibility criteria:

  • The Universal Account Number or UAN must be activated.
  • Your Aadhaar number must be linked and validated with your Universal Account Number or UAN.
  • Your bank account with the correct IFSC code must be seeded with your Universal Account Number or UAN.
  • Your Provident Fund account must follow the Know Your Customer or KYC norms.
  • You will get an OTP on your Aadhaar-linked mobile number. Ensure that your mobile number is active.
  • In case of retirement, you should update your exact birth date in the EPFO records.


You can use your Provident Fund corpus to repay your home loan and decrease your interest outlay if the home loan interest rate is larger than the Provident Fund interest. You can save your Provident Fund corpus if the interest on your PF amount is higher than or equal to the interest rate on your home loan. You can withdraw approximately 90% of your Provident Fund to pay off your home loan if you want to apply for home loan. You can withdraw from your home loan at 55 years for retirement reasons. You can even withdraw from your Provident Fund, such as renovating your home, marriage, and education expenses, financial emergencies, building or buying a home, etc. 

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