How to Get a Home Loan against Your PF

Over the years, the Indian government has taken all possible measures to make sure every family has a roof over its head. Things have changed a lot from what it used to be- homes are offered at extremely affordable rates by the government as well as private builders; home loans have also become cheaper and convenient, one can apply for a home loan online and get instant approval as well as manage the loan account from the comfort of his home. All this is now possible because we envisioned it way before and made efforts toward it. Several progressive steps are taken by the government to make the housing scenario in India even better.

An important step was taken in 2016 when the government announced a housing scheme for the members of Employees’ Provident Fund Organization (EPFO). Under the scheme, EPFO subscribers are allowed to pledge their Provident Fund accumulations to buy a house or to build one. The monthly PF contributions can also be utilized towards the part or full repayment of their home loan or for making monthly EMI payments. This will make it easier for the middle-class buyers to purchase a home without compromising savings or cutting their monthly budget.

Let’s learn more about how the scheme works-

Home Loan against PF

There are over four crore EPF subscribers in India and it is a progressive move to assist them in buying a house. To explain in layman terms- the scheme allows you to use your PF account as collateral for your home loan. For the purpose of purchasing a house, you are allowed to withdraw funds from your PF account only after the completion of three years from the contribution. You can withdraw 90 percent of PF accumulation in your account or the cost of the real estate, whichever is lower. Earlier this amount was subject to the type of real estate you are buying. For plot purchase, the loan amount was equivalent to 24 months’ basic salary plus dearness allowance. And for buying a flat in an apartment project or for constructing your own house, the loan amount was 36 months’ basic salary and DA.

Withdrawals are possible from the PF account only if-

·         The employee is a member of EPFO for at least three years

·        The fund accumulation as well as the interest is at least Rs 20,000

It should also be noted that this amount can be withdrawn only once. This will be a triparty agreement involving the applicant, bank or financial institution and the EPFO, although the payment will be made by the EPFO directly to the lender bank. In case the allotment is cancelled, the amount has to be refunded into the PF account of the buyer within 15 days. In case the amount withdrawn exceeds the amount spent, the balance will be refunded to the PF account within 30 days of the deal. Home loan against PF can also be taken jointly but the co-applicant can be none other than the primary applicant’s spouse.

Payment of Home Loan EMIs through PF Account

Monthly instalments can also be made from your PF account towards an existing home loan taken in your name or in the name of your spouse. For this purpose, the lending institution will look at the amount contributed to the applicant’s PF account over the last three months.

Benefits of Home Loan against PF

The government is quite serious about making things more convenient for the people of India. A host of online services like linking Aadhaar to your PF account, UAN registrations etc. have been brought forward in a short span of time. Recently, the UAN withdrawal facility was also announced which would allow a member to withdraw his PF accumulation without employer’s signature. Home loan against PF is also very beneficial for the mid-segment homebuyers-

·         No need to squander your savings or cut your monthly budget to get a home loan.

·         You will get the age advantage; the older you are more will be the PF amount.

·         After 5 years of contribution, your PF money is tax-free, so you will enjoy dual income tax benefits on home loan as well as the PF account from which you are financing it.

This is a part of the ‘Housing for All by 2022’ initiative taken by the government. It aims at assisting the working generation in buying the home of their dreams in any location they want unlike the housing schemes wherein the government builds affordable homes for them. Buyers will be free to choose their home from the real estate market without any restriction. They will not only be able to take a home loan on their PF account but also repay outstanding EMIs through the same. There is no big stress to repay the amount as it is, in fact, an advance.

Indiabulls Home Loans and Tax Benefits

Getting the key to your dream home is a wonderful feeling. It takes years of hard work and savings for a middle-class family to finally buy a house. Home loans have come a long way in making home buying easier for the people of India. Persistent efforts are being made by the government to give every family a roof over its head; banks and financial institution are not far behind in making this dream a reality. Offering higher loan amount, easy terms and conditions and attractive interest rate, lenders are assisting mid-segment home-buyers in the best possible ways.

One of the most trusted home loan lending institutions is Indiabulls. It is the second largest housing finance company in India and is regulated by the National Housing Bank. Based on the pillars of transparency, integrity, professionalism and customer-centric approach, Indiabulls aims to share the load of homebuyers so that they can focus on other aspects of their new home. Indiabulls home loan can be availed by residents Indians as well as NRIs.

Key Highlights of Indiabulls Home Loan

Indiabulls offers home loans at highly competitive rates customized to meet the needs of different buyer segments. Given below are some of the key reasons why one should opt for Indiabulls home loan-

Purpose of Loan- Through Indiabulls, one can take loan not only to finance the purchase of a house but also for the construction of a residential house on a plot, for extension or improvement of an existing residential property or for the renovation of a house. So for every home related need you have, Indiabulls is there to support you.

Maximum Loan Amount- As a step towards sharing maximum load of a homebuyer, Indiabulls home loan can be taken for 90% of the property value, in case the cost is up to Rs 30 Lakhs. For properties ranging between Rs 30 Lakhs and Rs 75 Lakhs, the loan amount can be up to 80% of the value. For homes costing higher than Rs 75 Lakhs, up to 75% of the value can be funded through home loans. The maximum loan amount, however, is subject to the applicant’s repayment capacity.

Joint Home Loan Facility- Indiabulls home loan can also be taken jointly with a co-applicant subject to certain terms and conditions. Joint home loans are good for those with poor credit scores and they also allow extra income tax benefits.

Maximum Tenure- Usually banks grant home loans for a period of 20-25 years but Indiabulls home loan can be availed for a maximum tenure of 30 years subject to the retirement age of the applicant.

Indiabulls Home Loan Interest Rate

Indiabulls home loans are available at adjustable interest rates. These are linked to its benchmark rate which is subject to change but the monthly EMI outgo remains unchanged. In case the rate increases, the interest component in your EMI will be increased and principal amount is reduced and vice-versa. 

The table given below shows Indiabulls home loan interest rates for different property values-

Home Loan Amount	Adjustable Interest Rates
Upto and including Rs 75 Lakhs	8.65% to 9.75%
From Rs 75 Lakhs up to Rs 3 Crores	8.70% to 10.75%
From Rs 3 Crores up to Rs 5 Crores	8.80% to 11.25%
Above Rs 5 Crores	10.00% to 11.75%

A mix of fixed and floating interest rates is also offered by Indiabulls. The rate is fixed for the first three years after which interest is charged as per the prevailing adjustable rates of interest. The interest rate margin will also be adjusted to the benchmark rates of Indiabulls.

Tax Benefits on Indiabulls Home Loan

One can avail certain tax benefits on Indiabulls home loans. Under section 24B of the Income Tax Act, you can get a tax deduction of up to Rs 2 Lakh towards interest paid on your home loan. Also, under section 80C, You can get deduction up to Rs 1,50,000 from the Income on repayment of home loan principal during a financial year.

Other Benefits of Indiabulls Home Loan

Some other feature of this home loan are-

·         Pre-approved home loan facility is also offered by Indiabulls.

·         No pre-payment / foreclosure charges on home loans.

·         One can manage his loan account online or through Indiabulls latest mobile application.

·         Quick processing and disbursal of loan; online one click approval facility is also available.

·         Balance transfer facility with reduced interest rates and EMIs.

Online Tool for home loan EMI calculator

Most people take home loans when they are buying a property, and for the same they would want to calculate the EMI or Equated Monthly Instalment precisely. Doing the calculation manually is a tedious job and one can go wrong anywhere. It is, therefore, safe to use the home loan EMI calculator- an online tool that will help you learn about the EMI as quickly as possible.

The home loan EMI calculator online tool requires minimal inputs and assures customized results. 

What are the parameters that are required to use the loan EMI calculator? 

• You need to include the tenure of your home loan repayment procedure by moving the slider. 

• Also, write the loan amount on the slider tool. 

• Input the interest rate in the designated field. Since the entered area is earmarked with the percentage (%) sign, you do not have to manually input it.

• When using the EMI home loan calculator, bear in mind about prepayments. You have to choose any of the options, yes/no, which shows as the final input. 

The reasons why you should use home loan EMI calculator is that it has many advantages which include speed, simplicity of the process, free to use and experimental since it is capable of testing different interest rates along with varying tenure combinations. 

Using the EMI home loan calculator, you can easily manage home loan repayments. How? 

EMI home loan calculator is user-friendly and is particularly designed to simplify the tedious job. The calculation is performed in the shortest possible time. It is the best online tool to manage your home loans better than you had ever imagined. Now that we have discussed about EMI home loan calculator, let’s understand the formula used for calculating home loan EMI. 

The basic formula to calculate the monthly instalment of your home loan is:

E= P x r x (1+r)^n/(1+r)^(n-1)

What is P? 

P is the principal amount which is borrowed. 

What is r?

R is the rate of interest which is provided on a monthly basis. Remember that the interest rate is provided annually. To include the interest rate on a monthly basis, you should use r=(annual interest/12)x100. 

While this formula is used to manually calculate the EMI, it may not be accurate as the home loan EMI calculator. 

How the online tool works? 

The online home loan EMI calculator is a convenient and user-friendly interface. The essential inputs are loan tenure, loan amount, applicable processing fee, applicable interest rate, and along with this you have the choice of ‘yes’ or ‘no’ for pre-payment option. Then, click on the ‘’Calculate’’ button and you will get the desired result. 

What are the benefits of home loan EMI calculator? 

• The calculator helps to understand the differing financial charges like the processing fee value and total interest paid. 

• The home loan EMI calculator enables to ascertain the EMI amount in seconds. With inputs such as rate of interest, loan amount and loan term, you will know the EMI amount payable.
  
• If you know the EMI value, it will help you choose the tenure of the loan. If the tenure is small, the EMI is higher. 

• Also, the home loan EMI calculator helps you in loan management. If you have a special objective to pay off the loan before time, then the EMI calculator will help you make your choice. 

Thus, using the home loan EMI calculator serves as the best way to calculate EMIs and to know how easily and quickly you can pay off the loan.

What is floating interest rates of DHFL Home Loans?

There are several home loan providers in the market trying to mark their name in the competitive environment. One of those is DHFL which is doing great business these days. The bank belongs to the private sector but the facilities offered are one of the best in the market which make people look forward to avavil a loan from the bank. One of the major advantages that the bank provides is low rate of interest. The DHFL home loan interest rates are always at the lowest level making customers feel secured. However, the interest rates vary according to the type of the loan.

The best interest rate for loan

While there are different interest rates for different home loans, the best rate offered is 8.60% currently. This is flexible interest rate and will vary according to the market rate of interest and the margin mentioned by RBI. The effective rate of interest starts from 9%. This makes the EMI per month really low and makes it easy for anyone to afford a home at that EMI. Lower interest rate will also increase your eligibility as EMI is determined based on your paying capacity. 

DHFL home loan interest rates

Home loan interest rate for salaried and self-employed people may vary and the tenure can be 1 to 30 years. DHFL home loan interest rates usually start from 9% onwards. 

For salaried individuals

The interest for salaried individuals start from 9% per annum and that is applicable for loan amount up to 75 lacs. If you want to take a loan of more than 75 lakhs but less than 1.5 crore, the interest rate will be 9.15%. From 1.5 crores to 3 crores, the interest rate is fixed at 9.35% and for bigger amounts the interest will be 9.75%. 

For Self-Employed

For people who are self-employed,, the interest rate is a bit higher compared to the salaried employees. The interest rate for up to 75 lacs is 9.10% while for the range of 75 lacs to 1.5 crores; the rate is fixed at 9.25%. For loans over 1.5 crore and less than 3 crores, the rate of interest charged by the bank is 9.45% and for any amount more than that you will have to pay an interest of 10%. 

Apart from the home loan interest, a borrower also needs to pay a processing fee of Rs.5000 for a loan up to 30 lacs. For a loan up to 75 lacs the processing fee is Rs. 10,000 and for amount more than that the processing fee is Rs. 20,000. This is a nonrefundable amount charged by the bank and it is charged only once. There are some other charges too that depend upon the terms and conditions of the loan. 

There are several reasons why people choose DHFL as their home loan partner. One of those reasons is that the bank is a user friendly one and the interest rate is quite low too. The bank makes sure that the burden is lower for the borrower and thus tries to offer the best rate in the market. Apart from that, the processing of the loan is done quite early making it a convenient option for the borrower who wants things to be wrapped up as early as possible. The representative of the bank will guide you in every step of processing the loan and doorstep service is offered to customers who are unable to visit the branch. The documentation process is easy and hassle free and that is the reason why it has become easy to take a loan from DHFL.