EPF For Home Loan Repayment: Should You Consider It? In PICS

As such, home buyers, both existing and new, have been looking for new ways to reduce their interest payments.

Written By : ABP News Bureau | Updated at : 20 Mar 2024 03:21 PM (IST)

With the recent repo rate hikes, home loans have become more expensive as interest rates have surged.

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One of the attractive repayment options is using the Employees Provident Fund (EPF) to help with the loan amount. However, this decision requires careful consideration before you dive into the retirement funds. Getty

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Section 68BB of the EPF Scheme allows members to utilise funds for home loan repayment if the property is registered under the name of the PF member, individually or jointly. Getty

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Another criteria to be eligible to utilise EPF for repayment of home loan is that the member needs to complete a minimum of 10 years of PF contribution. Getty

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One major factor to consider before going down this route is if the home loan interest rate exceeds that earned on the EPF or not. If yes, then this will result in interest savings, else it could mean a loss for you. Getty

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If you plan to utilise the EPF for repayment purposes for the short term, it is a manageable solution. However, for long term financial issues, you should consider other alternatives. Getty

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The EPF is to be earmarked for your retirement years and should only be utilised earlier as a last resort. If you have alternative options available, consider those before breaking into your retirement fund. Getty