EPF Loan vs Personal Loan: Loan Interest rate details
An EPF loan or PF advance is offered to salaried employees, but a personal loan is a type of loan utilized for emergencies.
In this post, I’m going to compare EPF loans and Personal Loans.
So if you’re looking for a DEEP comparison of these two loans, you have landed in the right place.
Because in today’s post I’m going to compare EPF Loan vs Personal Loan, in terms of
- Interest Rate
Let’s dive right Now into this topic.
The Employer Provident Fund Organization (EPFO) allows employees to partially withdraw money from their PF account and use it as personal access to deal with emergencies. Although it is often referred to as an EPF loan it is not exactly a loan but in fact, an advance as a repayable amount does not have to be repaid in most cases (non-refundable).
However, it should be noted that the EPFO first verifies the reason for withdrawal and allows you to withdraw money from your EPF account if the reason is reasonable.
Applying Process of EPF Loan
It can be taken during the course of employment under certain conditions. Apart from the reason, the number of years of service that the employee has completed also plays an important role. The advance form, Form 31, must be submitted with other required documents in order to avail of a loan. The process to avail of the loan can be completed on the EPFO portal.
EPF loan interest rate
There is no interest rate. The price you have to pay for this loan is in terms of the amount that you could have earned as interest on the money raised if you did not withdraw. The interest on EPF deposits is calculated on the basis of the monthly running balance and the current rate is 8.5%.
Documents Required for EPF Loan
These are the following is a list of the EPF forms that can be used for the withdrawal:
|1||Form 19: For the Final PF Settlement.|
|2||Form 10-C: For pension withdrawal benefit.|
|3||Form 31: For partial withdrawal (advance) of EPF in case of an emergency.|
A personal loan is a type of unsecured loan that you can borrow from a bank or financial institution if you need money for your financial needs.
You borrow a loan when you need credit. Once you have submitted your loan application to the lender for a personal loan, the lender verifies and approves. Post it, the amount of the bank is distributed to your bank account. Once you have received the loan amount, you will have to repay the loan to the lender through EMI for the repayment period.
Read Also – Now Get Rs. 1 Lakh Personal Loan from QuickCredit App
Applying Process of Personal Loan
To get a Personal Loan, you can apply for a loan Online from the Bank’s website or you can also visit the Bank’s Branch.
Personal Interest Rate
On the other hand, Most banks provide Personal Loans at the interest rate of 10% to 20%. In some cases, the maximum interest rate is too high.
Documents Required for Personal Loan Loan:
Basically, to get a Personal Loan, you need to submit the Basic document. Which are,
- Identity Proof
- Address Proof
- Bank Statement
- Salary slip for Salaried Person or IT file for Business Person.
EPF Loan Scheme Feature & Benefits
|1||Under the EPF scheme, 8.33% of the EPF funds are directed by the employer towards the employee pension scheme. So, in the long run, it can help create a leisurely corpus.|
|2||The EPF fund can also be used in case of a financial emergency by withdrawing a part of this fund through EPF.|
|3||EPF members can withdraw funds from their PF account to meet their specific needs such as higher education, home construction, wedding expenses, or medical benefits.|
|4||Under Section 80C of the Income-tax Act, employees can claim tax benefits up to a limit of Rs.1.50 lakh in their EPF funds.|
Personal Loan Scheme Feature & Benefits
- It is a fully Hassle-free loan process
- You can get an Instant loan amount after approved
- Loan interest is Standard, not too high
- You can use the funds for any purpose
- Easy documentation
- No collaterals against the loan
- You can easily repay the loan amount.
Content Reference : EPFO Offical Website EPFO
Read more popular news related to personal loans, business loans, home loans, car loans, app news, and bike loans.