Use PF for Home Loan?

If there is a shortage of amount to fulfill your dream, and if it is more than five years since your Provident Fund had started, you can think of the last resort, your PF amount. Whether EPF or PPF, it is the amount saved for the post-retirement benefits.

Employee Provident Fund is a retirement benefit applicable only to salaried employees. It is a fund to which both the employee and employer contribute 12 per cent of the former’s basic salary amount each month. This percentage is pre-set by the government.

The contribution which is payable by the employer to the Provident Fund of the employee is set at 12 % of “basic salary, dearness allowances and retaining allowance”. Which means, the employer contributes 12% of Basic component of the salary to the Provident Fund. However, contribution by employer is bifurcated into a) contribution to Provident Fund and b) contribution to Employees Pension Scheme.


Calculation of Provident fund

For example, on a basic salary of Rs. 6500/- p.m., 8.33% is contributed to Pension Scheme from employer’s share of contribution. The maximum amount that will go to Pension Fund is Rs.541/- per month. i.e. 8.33% of Rs.6500/- (Rs 541.45). On a basic salary of Rs 10000/-, 12% (Rs 1200/-) contribution by employer would be contributed in the following manner: Rs 541/- would go to Pension Fund & Rs 659/- would go to Provident Fund.

The PF accounts will now yield a return of 8.75 per cent annually. Usually, the amount is paid at the time of retirement or resignation, whichever occurs earlier. In the case of a change of one’s job, the amount can be transferred from the old company to the new one.

Know about the tax benefits.

Additionally, the amount invested in an Employees Provident Fund is exempt from tax under Section 80C of the Income Tax Act. Withdrawal from an EPF is subject to tax if it is carried out within 5 years of employment with the same employer.

For instance, if an employee’s gross salary is INR 50,000 pm and Basic Salary is INR 20,000 on which Provident Fund deductions are INR 2,400(12% of INR 20,000). Since income tax is levied on Gross salary, the salaried employee should deduct Income Tax on INR 50,000, but the employer deducts only on INR 47,600 (INR 50,000-2400) since salaried Employee’s Provident Fund amount is exempted from Income Tax; since it is a retirement benefit. But when the salaried employee withdraws before retirement that will be considered as normal income, hence TDS (Tax Deducted at Source) will be applicable on the withdrawal.

In case the salaried employee does not fall under a 30% Income Tax slab, he can claim back the TDS amount from the IT department by submitting his Income Tax returns with the help of TDS certificate(as issued by the PF trust) and Form-16.

Withdrawal of PF amount w.r.t home loan
Repayment of Home Loan Should have completed at least 10 years of employment.

The house should be registered in the person’s or his/her spouse’s name or should be owned jointly.

36 times the monthly salary of the individual Once during entire service tenure
Alteration or Renovation of house Should have completed at least 5 years of service.

The house should be registered in the person’s or his/her spouse’s name or should be owned jointly.

Up to 12 times the individual’s monthly salary Once during entire service tenure


Withdrawal Procedure

To withdraw your EPF, you need to fill up Form 19 (which can be downloaded from and submit it with the previous employer. With the Form 19 duly filled in, signed and attested by the former employer, you need to submit this along with other documents, such as resignation acceptance letter or relieving letter and a cancelled cheque of your bank account, to the EPFO of your jurisdiction. Withdrawal of money from the account is permissible only if you are in between two jobs or have been unable to find another for over two months.

Learn about PF withdrawal forms.

The new PF claim forms are very simple and easy to fill. EPF members can submit them directly to respective jurisdictional EPF office. You can also submit these new forms directly to the EPF Commissioner online. The withdrawal or claim benefit will directly be credited to your bank account.

  • New Form 19 (UAN) for EPF withdrawal. Look at the new Form 19 UAN for PF withdrawal. You need to provide your UAN number, mobile number, name, date of leaving, reason for leaving, PAN number, postal address and Form 15G/15H. Employer’s seal and signature is not required. (Also, submit Form 15G if your service is less than 5 years. )EPF withdrawal claim form 19 uan pic
  • New Form 10c (UAN) for EPS Pension withdrawal benefit. Look at the new Form 10c UAN. You have to provide details like your mobile number, UAN, Name, Date of Joining, Date of leaving and full postal address.Download New revised Form 10c UAN pension fund withdrawal pic
  • New Form 31 (UAN) for Partial PF Withdrawals / Advances. Look at the revised Form 31 UAN by clicking on the below image. You have to provide details like mobile number, UAN, name, Purpose of advance, amount and other details about your loan eps pension withdrawal form 31 uan pic

If your Aadhar number and Bank details have not been seeded and your KYC form is not verified by your employer, you have to make your claims of withdrawals in existing (old) Form no 19, 10C & 31 only. You may download old and existing EPF withdrawal forms by visiting EPFO’s website.

When can you go for PF amount.

Out of very minimal schemes which have good returns and with tax exemption, PF is one, in India. If you can refrain from using this amount, it is the best. Or if you are confident that you can save so much as you withdrew before you retire, you can take the road. The only reason you should have enough amount in PF account is you should not look down for help after you retire.

Know more about tax benefits on the PF account.

Tax benefits with PF account.

Banks and Home loans interest rate

With the change of the interest rate calculation methods, a constant change in interest rate is expected, though not every month but every quarter, in a minimum.

Home loan is a long term loan and customers,usually, prefer floating rates. Rates keep changing and expecting a lower interest rate for the whole tenure of 20 year is impossible.

So, what is the right time to take a Home loan ?

  • The Property you intend to buy is good and cannot be missed or it is expected that the price of property will rise.
  • If you can fix the EMI in your monthly budgets.

Reports show that Home Loan Market in India is Rs.9,70,000 crore in size. Market is growing at 15.6% per annum over the last 10 years. But India’s GDP is only 8% whereas developed countries’ is at 60%. But if we look at Indian Government’s initiative or Plan of housing for all, by 2020 India needs 11 crore homes. In last 5 years, property prices have home loan interest rates_loanyantraincreased by more than 72%, but the median income has not. It makes the houses unaffordable for several borrowers. Though the real estate market is stable right now, we should take the advantage of the situation and the interest rates too.


Join with us for even lesser interest rate and pay less on your home loan.

Know the interest rates of several banks and how much loan each bank provides on your property.

Banks Loan to Property Value Interest Rates
State Bank of India SBI 75% -90% 9.40% – 9.45%
HDFC Ltd. 75% -80% 9.50% – 9.55%
LIC Housing 75% -80% 9.60%
AXIS Bank Home Loan 75% – 85% 9.50% – 9.65%
ICICI Bank Home Loan Upto 85% 9.40% – 9.80%
Fedbank Home Loan Upto 85% 9.68% – 10.08%
PNB Home Loan 75% – 80% 9.60%
PNB Housing Finance 75% – 80% 9.75% – 9.95%
IDBI Home Loan 75% – 90% 9.75%
DHFL Home Loan 80% – 85% 9.55%(upto 25lacs),then 9.65%
Bajaj Finserv Home Loan 75% – 80% 9.50%
Indiabulls Home Loan 75% – 80% 9.90% – 10%
Allahabad Bank Home Loan 75% – 90% 9.70% – 9.95%
Bank of India Home Loan 75% – 85% 9.70% – 9.95%
Union Bank Home Loan 65% – 80% 9.65% – 10.40%
United Bank Home Loan 75% – 80% 9.75%
UCO Bank Home Loan 75% – 80% 9.70%
Bank of Baroda Home Loan 75% – 90% 9.65%
Kotak Home Loan up to 80% 10.25%
Vijaya Home Loan Upto 80% 9.65%
Standard Chatered Home Loan Upto 80% 9.51%
India Bank Home Loan 80% – 90% 9.65%
L&T Home Loan 80% – 90% 9.90% – 10.75%

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Revised Interest rates by banks as per MCLR.

Earlier were the days when banks used to play around with the interest rates. With the new introduction of interest rate calculation by RBI, since April 1, 2016, the competition amongst banks is running on a high speed.

Banks have to review their interest rates every month and publish on a pre-announced dates. Also, full-fledged review of the customer’s  risk profile is high in priority before lending the loan amount and in deciding the spread and the final interest rate.

So, how is it advantageous to customers?

Solution to this question lies within the following question.

Did banks ever observe the change in base rate and implement in their interest rate?

To make it practical…imagine you borrowed loan amount at 10%  interest rate. Out of which, say, 9.5% is base rate and 0.5% is spread.  If RBI changes the base rate to 9%, your interest rate is supposed to be 9.5% (9% +0.5%). But what happens in reality, the banks with unknown reasons, increase the spread. Instead of 0.5%, the banks can take a chance to increase the spread to 1%.

Now, with MCLR in existence, banks should consider the customers risk profile in detail, to decide on spread. Banks can’t easily get arbitrary with spread changes.

mclr interest rates_loanyantra

What will be the impact of 0.25% lesser interest rate on home loans?

The longer the remaining tenure, greater the impact. The saving can be in hundreds per month. But, when you calculate you end up saving atleast a month’s EMI.

A cut in small savings rate is likely to bring down bank deposit rates and ultimately lead to a drop in lending rates as well.

The other aspect,

For a borrower in April 1 get loans at the prevailing MCLR (9.3%), but a month later a new borrower might get a loan at a lower MCLR if the cost of funds drops. For the April borrower, it will take three more quarters for his loan to get reset. In other words, there could be 12 sets of one-year MCLR if cost of funds change every month.

Corporate customers are also likely to look at shorter term loans to take advantage of falling rates. This will mean that banks which borrow for longer terms but have give term loans will face an asset-liability mismatch – though the only issue there is that bank earnings become volatile, they don’t usually face a crisis because of that.

Observe the revised interest rates by various banks..

Bank / NBFC Current Base Rate, PLR New MCLR April 2016 Latest Update
Allahabad Bank 9.70% 9.30% – 9.60% 01st Apr 16
Andhra Bank 9.75% 29th Sep 15
Axis Bank 9.50% 9.10% – 9.65% 01st Apr 16
Bajaj Finserv (PLR) 20.16% 01st May 14
Bank of Baroda 9.65% 9.00% – 9.35% 01st Apr 16
Bank of India 9.70% 9.15% – 9.40% 01st Apr 16
Bank of Maharashtra 9.70% 9.10% – 9.65% 01st Apr 16
BNP 9.50% 23rd Sep 13
Canara Bank 9.65% 9.00% – 9.45% 01st Apr 16
Catholic Syrian Bank 10.50% 01st Dec 11
Central Bank of India 9.70% 08th Oct 15
Citi Bank 9.25% 12th Oct 15
City Union Bank 10.50% 01st Nov 15
Corporation Bank 9.65% 08th Oct 15
DBS Bank 9.10% 01st Feb 16
Dena Bank 9.70% 9.30% – 9.60% 01st Apr 16
Deutsche Bank 9.20% 19th Oct 15
Development Credit Bank 10.70% 14th Dec 14
Dhan Laxmi Bank 11.40% 03rd Nov 15
DHFL PLR 18.30% 08th Oct 15
Edelweiss PLR 17.50% 30th Nov -1
Federal Bank 9.63% 9.14% – 9.60% 01st Apr 16
GIC Housing Finance PLR 15.00% 30th Nov -1
HDFC PLR 16.30% 05th Oct 15
HDFC Bank 9.30% 8.95% – 9.35% 01st Apr 16
HSBC Bank 9.10% 09th Nov 15
ICICI Bank 9.35% 9.40% – 9.70% 01st Apr 16
IDBI Bank 9.75% 30th Sep 15
IIFL PLR 17.50% 01st Apr 14
Indiabulls PLR 17.05% 08th Oct 15
Indian Bank 9.65% 9.20% – 9.70% 01st Apr 16
Indian Overseas Bank 9.90% 9.50% – 9.90% 01st Apr 16
IndusInd Bank 10.60% 19th Oct 15
Jammu and Kashmir Bank 9.50% 05th Oct 15
Karnataka Bank 10.25% 8.95% – 9.20% 01st Apr 16
Karur Vysya Bank 10.40% 05th Oct 15
Kotak Bank 9.50% 8.90% – 9.65% 01st Apr 16
Lakshmi Vilas Bank 10.55% 08th Feb 16
LIC Housing Finance PLR 14.20% 10th Oct 15
Nainital Bank 9.75% 21st Oct 15
OBC 9.70% 30th Sep 15
PNB 9.60% 9.15% – 9.55% 01st Apr 16
PNB Housing Finance 14.35% 27th Apr 15
Punjab and Sindh Bank 9.75% 05th Oct 15
Ratnakar Bank 10.65% 16th Oct 15
Reliance Capital PLR 18.00% 01st Nov 15
SBBJ 9.70% 05th Oct 15
SBI 9.30% 8.95% – 9.35% 01st Apr 16
South Indian Bank 10.00% 9.50% – 10.00% 01st Apr 16
Standard Chatered Bank 9.50% 8.45% – 9.65% 01st Apr 16
State Bank of Hyderabad 9.75% 08th Oct 15
State Bank of Mysore 9.65% 07th Oct 15
State Bank of Patiala 9.65% 05th Oct 15
State Bank of Travancore 9.95% 05th Oct 15
Syndicate Bank 9.70% 9.65% – 9.65% 01st Apr 16
Tamilnad Mercantile Bank 10.40% 15th Oct 15
UCO Bank 9.70% 05th Oct 15
Union Bank of India 9.65% 9.25% – 9.45% 01st Apr 16
United Bank of India 9.65% 12th Oct 15
Vijaya Bank 9.65% 08th Oct 15
Yes Bank 10.25% 9.00% – 9.60% 01st Apr 16

To know more about MCLR, its calculation and the difference between base rate and MCLR, refer the following link.


How to calculate EMI manually.

Calculate EMI manually

Whether buying a car, buying a new apartment or affording overseas education to children, loans have become an integral part of our life. When we borrow a loan the most accepted methods of repayment is through EMI or Equated Monthly Instalments. It is the small amount including both the principal and interest, to be paid towards a loan we opted for. During the initial stages the interest alone constitutes the major part of the EMI but as we progress in the payment, during the course of time, the portion of interest is reduced and the principal amount is added to it.

EMI can be opted for both fixed and variable interest rates. It comprises of two major variable components, commonemi calculation manually_loanyantraly known as;

  • Principal Amount borrowed
  • Interest rate for the loan
The Number Game

For every loan that you borrow the EMI is calculated based on certain parameters like Interest rates, loan amount and the tenure of repayment for the whole loan amount. The mathematical formula for calculating EMI can be derived as:


While you borrow a loan, you are given an option to keep either the tenure or the EMI constant. While one of the above parameter is kept constant, the other parameters will be reduced. i.e., if you opt to keep the tenure as a constant value, then the EMI will be reduced. Or if EMI is paid at a constant rate then the tenure of the loan is reduced.

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Clever step when you have low interest rates from bank.

Never get dazzled by the words ‘Low EMIs’ – Look before you leap

For the EMI payers, those are the magical words. Be clever and plan your EMI. Understand that EMI has two components. a) Principal and b)Interest. Always ask your lender for the break up of your EMI. Get clear idea about the components. You do not expect to waste lot of money with the tempting tagline of Low EMIs.

What if – interest gets lowered and EMI remains the same

Let us remove the low EMI motive from our mind. Now, let us target that we must pay lower interest component to the bank. You can approach the low interest and high principal_loanyantrabank that has the lowest interest rate. But apply a trick. Do not reduce the EMI. In this scenario, you are brilliantly covering the principal amount component along with less interest component.

You win half the battle here. Whenever the bank offers you to pay low EMI, do the math. You must not increase the duration and pay higher interest. In fact, you must concentrate on covering the principal amount component.

Let us understand this theory with an example. If I am with a home loan of Rs.30,00,000 at an interest rate, 9.6% for 12 years, my EMI will be Rs.35,000. Where on a large scale, the break up of principal and interest component is 40.75% and 59.25%, respectively. For example, if the bank offered a low interest rate of 9.3%. Your EMI lowers down to, Rs.34,000.

The clever step here is to go and opt for the 9.3% interest rate, and keep the EMI constant, i.e., Rs. 35,000, instead of reducing it to Rs. 34,000. Mention the bank personnel that you want to add that Rs. 1000 to your principal amount. So, automatically, the principal amount comes down which leads to early closure of your home loan.

Check out and calculate more by following the link below.

We wish you to stay happy even when you are with the loan.