Can My Friend Use His EPF to Pay Off a Loan Before Completing 5 Years?

EPF Policy Queries

My friend has been working in the current organization for the last 4 years. He bought a property last year in May and took a major loan from a Private MNC bank. His organization has maintained PF in a Government account.

He has queries on the EPF policy:

- Since he has not completed 5 years of service, can he seek PF withdrawal?
- In case he wants to prepay the loan, can he do so from PF withdrawal?
- After he attains 5 years of service, is there an option to seek PF withdrawal to prepay the loan he has taken?
- If yes, what documentation is needed for PF withdrawal?
- If PF withdrawal is not possible, is there a procedure so that he can seek a loan against the PF balance?

Regards,
Ravy

Advance from Provident Fund for Loan Payment

One can avail an advance from the fund for the payment of a loan provided they have completed 10 years of membership in the fund. The member should have taken a loan from a government body such as a Cooperative Society, Housing Board, Nationalized Banks, Public Financial Institutions, Municipal Corporation, or a body similar to the Delhi Development Authority solely for the purposes specified in sub-paragraph (i) of Paragraph 68-B.

Section 68-B of the Employees' Provident Fund Scheme

Section 68-B discusses withdrawal from the fund for the purchase of a dwelling house/flat or for the construction of a dwelling house, including the acquisition of a suitable site for the purpose.

A certificate from the lending authority furnishing the details of the loan and the outstanding amount has to be provided along with Form 31 to avail an advance for the payment of the loan.

Regards,
Suresh