How To Get A Loan Against PPF Account ? – Public Provident Fund (PPF) is the best long term investment option popular among salaried individual. The rate of interest on PPF are announced by central government each year. Interest are paid on the PPF account yearly as per the rate announced by the government. Read : PPF Must Know Factor before Investment.
Investment under the PPF are Tax free as per the Income Tax U/S 80C including the maturity amount. For other investment option under 80C read here.
How to Get a Loan against PPF ?
Getting loan against the PPF account is among the cheapest. Read : How to Get a Salaried Personal Loan from bank easily?. This is cheapest than loan against fixed deposit of the bank. If you arrage loan against your PPF account the rate of Interest would be charged approx 10.60% simple.
There are various Condition and eligibility criteria for granting loan against PPF, Just find out what are they : –
- One can apply loan against their PPF account only after completion of One Year after opening the account. To be remembered that the Year are considered as financial year i,e. April To March. For Example if PPF account is opened in the month of Nov 2014 then loan can be availed from April 2016.
- The maximum amount which can be granted as loan against the PPF account is 25% of the balance left in the account at the end of previous year immediately preceding the year the loan was applied. e.g. If PPF Loan applied in the month of Oct 2015 then the 25% amount of the PPF closing balance as on 31st March 2015 shall be the limit.
- One can’t take two PPF loan at a time. There should be the gap of minimum one year between the two loan even after closure.
- The rate of Interest charged on the PPF account are 2% higher than rate paid in PPF.
- PPF Loan repayment restricted to 36 months maximum. Repayment can be made in limp sum. One should pay the interest accrued regularly or it will be debited from the PPF balance.
- Default PPF loan account will be charged the Rate of Interest 6% higher than the Interest received on PPF deposit.
- There is no security or Guarantee required for availing the PPF loan
How To Apply For PPF Loan ?
Follow the below instruction which is needed to be done while applying for PPF loan
- Ge the application of PPF loan from the institution where you are having the PPF account like SBI, Post Office etc.
- Mention the Loan amount required and repayment period. Calculate the eligibility of PPF loan below.
- Mention the earlier loan closure date if any
- Enclose your updated PPF passbook.
- Usually the loan are granted instantly
PPF Related Faq