Personal loan or EPF loan: Which is better in 2024?

Personal loan or EPF loan

What is Personal loan? 

A Personal loan is a loan that does not require collateral or security and is offered with minimal documentation. It is a loan in which a lending institution, like a bank or Financial Institution, lends money to an individual. In return, you agree to repay this amount over a set time, often with interest and additional charges. Instant Personal Loans are versatile and can be used for various personal financial needs. 

What is an EPF loan? 

A EPF(Employees’ Provident Fund) is a form of social safety net into which workers must contribute a portion of their salaries and employers must contribute on behalf of their workers. Both the employee and employer contribute to a fund that aims to provide financial support to the employee when they reach retirement. It is managed by the government, with set minimum and maximum contribution levels. 

Difference between Personal loan vs EPF? 

Criteria Personal loan EPF 
  Purpose     Used for personal expenses, such as medical emergencies, home renovation, or debt consolidation     Used for short-term financial needs, such as cash crunch situations   
  Eligibility     Based on the borrower’s creditworthiness, income, and repayment capacity   Based on the balance in the EPF account two years before the loan application   
  Security     No collateral required   Secured loan against the EPF account   
  Use of funds   No restrictions on use of funds       Can be used for specific purposes, such as cash crunch situations 
  credit check     limited flexibility in terms of loan amount and repayment options     Flexible loan amount and repayment options depending on the lender’s offerings   

What is the Instant Personal loan application Process? 

Check Eligibility:

It is important to assess eligibility before applying for a instant personal loan. Factors such as your credit score, income and existing liabilities play an important role in determining your creditworthiness.

Prepare your documents:

Gather necessary documents such as identification, address, income information and work history. Having these documents ready will ensure a smoother application process. 

Compare lenders:

Research and compare different lenders to find the best interest rates, terms and loan options. This step is important so you can make an informed decision about the loan of your choice. 

Apply online or in person:

You can apply for a personal loan online through the lender’s website, mobile app or by visiting an office in person. The application usually involves filling out a form with personal and financial details. 

Submit your application:

After completing the application, submit it along with the required documents. Some lenders may require additional information or verification before processing your application. 

Wait for approval:

The lender will review your application, credit history and documents to determine if your application is approved. Approval times may vary, but usually takes 1-2 business days. 

Receiving the money:

Once your application is approved, the loan amount will be transferred to your bank account. The time it takes to receive your money can vary depending on the lender and your bank’s processing time. 

Loan repayment:

Make repayments according to agreed terms to avoid penalties and maintain good credit. Late or late payments can negatively affect your credit history. 

What is the maximum loan amount for Personal loan and EPF loans?

Maximum Loan Amount for Personal Loans: 

  • The maximum loan amount for personal loans can vary depending on the lender, borrower’s creditworthiness, income, and repayment capacity. 
  • ·Lender companies like Zap Money offer instant personal loans of up to Rs. 1 lakh with minimal paperwork and quick disbursement of funds. 

Maximum loan amount for Personal loan:

  • For Housing (purchase, construction): Up to 90% of your EPF balance (including employer and employee contributions) can be borrowed.  
  • For Housing (repair, renovation): Up to 75% of your EPF balance can be borrowed. For Medical Expenses (self or dependent): Up to 90% of your EPF balance can be borrowed.  
  • For Education Expenses (self or dependent): Up to 90% of your EPF balance can be borrowed. 
  •  For Marriage Expenses: Up to 50% of your EPF balance can be borrowed.  


What is the tenure for a personal loan in india? 

It generally ranges from 1 to 5 years it depends on the policies of specific institutions. 

How does my credit score affect my personal loan application? 

The lenders will assess your creditworthiness by checking your credit score and credit history. A higher credit score indicates good financial discipline and increases your chances of loan approval. A lower credit score may result in a higher interest rate or even rejection of the loan application.

What are the purposes for which an EPF loan can be used? 

A PF loan will be used for various purposes like medical expenses, education expenses, construction expenses and other emergencies, etc. 

What are the eligibility criteria for getting a EPF loan? 

This criteria include being an active Employee’s EPF Organization (EPF) member for at least 5 years, having completed 2 years of service as a current employer and not having availed of a PF loan in the past 5 years. 

Hariharan Ravichandran

Understanding the ever-changing environment of money may be a difficult experience.I'm Hariharan, a seasoned finance explorer and blogger. I am right there with you, beginning on this journey of financial enlightenment as a fellow traveler.


The ZapMoney app makes personal finance easy, accessible, and affordable. The App is available on Google Play Store and App Store for download, allowing you to sign up and access easy personal loans. ZapMoney is powered by Monexo Fintech Private Limited which is a registered NBFC-P2P.
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