Loan against PPF: Check borrowing limit, rate of interest and other details

Loan against PPF

You can take a loan against your PPF account on the basis of the PPF balance standing to your credit.

PPF short term loan

It is a short-term loan that needs to be paid within a period of 36 months. To get a PPF loan, you will have to collect Form D from the nearest post office or home branch, fill it out and then submit it to the bank or post office where you have the PPF account.

Who can take PPF loan

All account holders who are not yet eligible for premature withdrawals can apply for a loan against PPF. You can take a loan against PPF from the third to sixth financial year after the account opening.

PPF second loan

Investors who pay off their loan before 36 months are eligible to avail themselves of a second loan before the sixth year of their PPF account opening.

PPF loan minimum amount

The maximum loan amount that can be taken out against your PPF account is 25 percent of the balance in the PPF account at the end of the second year, which is the year before the loan application.

PPF loan repayment period

However, if the loan is paid after 36 months then the interest rate becomes 6 percent per annum from the date of disbursement. It is important to note that your PPF savings will not earn any interest during the repayment period.

PPF loan interest rate

You can take a loan against your PPF account at a nominal interest rate. The rate of interest applicable on such a loan is as low as 1 percent per annum if the loan is repaid within 36 months.

PPF loan repay

You will have to repay the principal amount of the loan against PPF within 36 months. You can pay it back in installments or in full, depending on what your cash flow allows. If you fail to repay a portion of the interest amount, the remaining amount will be deducted from your PPF account balance.